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New EEOC Rule Aims to Reduce Gender Wage Gap

Owen H. Laird

On January 29, 2016, President Obama proposed a new federal rule aimed at reducing the gender pay gap. Prior to this rule, the EEOC required companies with more than 100 employees to provide the EEOC with annual data regarding their employees’ gender, age, and job classifications. The new rule modifies the Equal Employment Opportunity Commission (“EEOC”) reporting requirements for companies with over 100 employees by expanding these companies’ annual disclosure requirement to include salary data.

The gender pay gap ­– the disparity in wages between men and women who perform the same job, and, apart from their gender, are essentially similar – has been a problem in the American workplace for decades. Even after the passage of the Equal Pay Act of 1963 – which requires employers to pay men and women who perform the same job equally – and the numerous steps taken by federal, state, and local governments, women still generally earn less then men for performing the same job. That gap is even more pronounced for minority women.

Proponents of the new rule believe it will address the gender pay gap in two ways. First, it will enable the EEOC and DOL to identify companies where women are paid less than men for the same work, allowing the EEOC to better organize and prosecute enforcement actions against these companies. The EEOC has authority to bring enforcement actions against companies who violate the Equal Pay Act. By collecting this salary information in addition to gender and age information, the EEOC and DOL will be able to review the data to identify companies with an apparent wage gap, and commence an investigation or enforcement action. Second, the EEOC hopes that simply by requiring companies to collect and assemble this data, the companies themselves will correct any identified wage disparities. Often, the existence of a wage gap at a given company is not the result of a deliberate policy to pay women less, but comes about as the amalgamation of dozens of factors spread across a body of individual personnel decisions. This is not to say that an “unintentional” wage gap is any less problematic than deliberate discrimination, but the hope is that by making executives aware of wage gaps in their own organizations, the companies will proactively address them without EEOC or DOL intervention.

Although a Republican-controlled Congress has generally rebuffed the Obama administration’s efforts to pass new anti-discrimination legislation, President Obama has taken a number of steps to address the pay gap between men and women. His administration issued an executive order in 2014 that required federal contractors to provide information regarding their employees’ gender and wages earned.

Despite these efforts, gender pay disparities continue to exist. If you believe that you are being discriminated against because of your gender, contact The Harman Firm LLP.

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