Is The Gender Gap Real? The EEOC Wants To Know

Compliance   |   

From Hollywood to the C-suite, the gender pay gap continues to make headlines. New equal pay initiatives driven by President Obama and the EEOC aim to gather data to shed light on the disparity.

 But many HR experts question whether the new reporting requirements will solve the problem or cloud it further with out-of-context numbers – and few look forward to the reporting burden.

The Proposed Change To EEO-1s

In remarks delivered on Jan. 29, the anniversary of his signing of the Lily Ledbetter Fair Pay Act of 2009, the president announced a proposed change to add a salary section to the EEO-1 report. Collecting salary data based on gender, race, and ethnicity, President Obama said, will help businesses get “a clearer picture of how they can ensure their employees are being treated equally.”

According to a statement released by EEOC Chair Jenny Yang, the goal is to use federal resources more efficiently while minimizing the burden on employers.

But public comments indicate that employers question both the burden and the value of the data requested. Many point out the challenges in collecting the required W-2 data, both from a logistical and a technical standpoint. Others mention the information that factors into play but can’t be captured on a W-2, like years of experience, skills, bonuses, or other compensation.

Greg Keating, chair of Choate Hall & Stewart’s labor employment and benefits practice told The Business Journals that W-2s can also be misleading because of decisions made by workers. Some may choose to work overtime while others don’t, for example, resulting in a “false positive” for payment discrimination.

Without additional context the salary data may not prove to be a “more powerful tool” after all.

Creating Transparent Salary Data

Still, though, the pressure on businesses to ensure fair pay is ratcheting up. Starting this year, every employer that has an office in California has to justify pay gaps between men and women doing “substantially similar” work, not just between people with the same title.

Some companies are taking action on their own. Salesforce CEO Marc Benioff conducted an internal salary review last year of all 17,000 Salesforce employees after two female employees suggested that women made less than their male counterparts. According to The Atlantic, after the review showed a disparity in pay, Salesforce spent $3 million extra in payroll so that men and women are paid the same.

 Other companies, like Whole Foods and Buffer, approach the issue by being transparent with salary information. Politico reports that Whole Foods makes a binder available in every store so employees can see each other’s salaries. Buffer, a social media management company, publishes the formula it uses to calculate pay along with the salaries of all its employees.

What Employers Can Do

Whether you support the proposed changes or not, you can take steps now to prepare and to assess any disparities that might exist in your organization.

Submit your comments before April 1. The EEOC can’t consider what it doesn’t know. Second, set up a Google Alert or other means of monitoring the proposal so you’ll quickly know of any changes.

Get your data in order. The New York State Council of SHRM, an affiliate of the Society for Human Resource Management, suggests that you conduct a self-audit under the supervision of a lawyer, so any compliance issues can be addressed.

Starting now gives you time to meet with IT, payroll, and other third-party vendors to figure out methods and costs associated with collecting the data.

Making Equal Pay Real

 With the president’s support and companies like Whole Foods, Buffer, and Salesforce leading the way, “equal pay for equal work” may soon become more than a catchphrase.

What do you think of the proposed change to the EEO-1? Let us know @goodhiretweets #BuildGreatTeams

Gwynne Monahan

Gwynne Monahan

Follow

Gwynne Monahan is a writer, editor, and consumer of knowledge who focuses on the intersection of law, technology, and HR. When she’s not writing, you can usually find her enjoying some jazz or a game of soccer.

Keep Your Eye On The Law

Subscribe to The Works for monthly updates and insight on changing hiring laws and background check best practices.

Our Contributors

Arte Nathan

Arte Nathan

President & COO at Strategic Development Worldwide
Deb McGrath

Deb McGrath

Founder and Chief Instigator of HR.com
Tony Le

Tony Le

Sr. Director, Global HR Operations & Talent Acquisition at IAC Publishing
Celinda Appleby

Celinda Appleby

Head of Global Recruitment Branding, Oracle

See All Our Contributors

Related posts

Compliance  | 

California Has Banned the Box—GoodHire Helps You Comply

You’ve likely heard about California’s new Ban the Box law (AB 1008). Here...

Compliance  |  Background Checks  |  What's New  | 

New: Localized Adverse Action Workflow For A Ban-The-Box World

No law says you have to hire people with criminal records. 

Compliance  | 

Marijuana Rulings Raise Lawsuit Risks. Is It Time To Change Your Drug Testing Policy?

August 2017 Update: Two recent court rulings pave the way for lawsuits...