Collecting Pay Data May Help EEOC Identify Race and Sex Discrimination

The National Academies of Sciences, Engineering, and Medicine (National Academies) recently published a study in which it concluded that collecting pay data can help the U.S. Equal Employment Opportunity Commission (EEOC) prevent and combat race and sex discrimination in American workplaces.

Since 1966, EEOC has required employers with 100 or more employees and federal contractors with 50 or more employees to submit an EEO-1 report. Employers use this report to submit information about their employees, including their job category, race, ethnicity, and gender. In the recent study, researchers evaluated EEO-1 data collection, which the EEOC had expanded for reporting years 2017 and 2018 to include information on employee pay. EEOC halted the expansion of the EEO-1 report after employers complained that compiling and submitting the employee pay data was burdensome.

The National Academies recommended in its study that EEOC continue collecting employee pay data as it did in 2017 and 2018 on the expanded EEO-1 report. Still, EEOC has not committed to doing so. Researchers found some limitations in the data collected, as it does not address LGBTQ status, distinguish Hispanic people by race, or allow individuals to choose more than one race. The National Academies also suggested that EEOC collect pay data according to narrower pay bands or even provide individualized data based on employee education, experience, and other relevant factors. If EEOC adopts these recommendations, employers may find the reporting requirements for the EEO-1 report to be even more burdensome than they were in 2017 and 2018.

Pay Discrimination

The Equal Pay Act has prohibited pay disparities based on gender since 1963, and the Civil Rights Act of 1964 prohibits pay disparities based on race, color, religion, sex, and national origin. The gender pay gap has decreased by only about half since that time. A lack of transparency about payment rates can make these disparities difficult to combat and eliminate. EEOC data collection on employee pay rates could help identify industries or locations where pay discrimination exists. This data also could be useful in supporting the increasing number of pay discrimination lawsuits that individuals are filing under state and local equal pay laws, which often have stricter requirements than federal law.

Wage Gap

In 1960, women earned 60% of what men earned; in 2020, women earned 82% of what men earned. The jurisdictions with the highest wage gaps based on gender in 2020 included Washington, D.C., Utah, and Wyoming. Various factors contribute to the wage gap, including the following:

  • Occupational segregation, or men and women working in different industries and jobs;
  • Male-dominated industries paying more than female-dominated industries; and
  • Women leaving the workforce for longer periods or working fewer hours due to caregiving opportunities, resulting in less work experience and opportunity.

Employers can combat the wage gap by instituting policies and procedures to ensure compliance with federal and state laws. They also can conduct pay audits, train managers to apply workplace policies fairly, and be aware of and responsive to discrimination in the workplace.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

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