Myths vs. Reality: Why Pay Data and the EEO-1 Form Matter
Myths vs. Reality: Why Pay Data and the EEO-1 Form Matter
Collecting pay data from employers is a critical, much-needed tool to ensure vigorous enforcement of equal pay laws.
Ensuring that women and men receive equal pay for equal work is a bedrock principle rooted in our nation’s commitment to equality and fairness that enjoys overwhelming support. However, pay discrimination remains a persistent problem that infects the workplace and reduces workers’ wages. Although thousands of pay discrimination charges are filed each year, many potential charges are never pursued because pay discrimination is often difficult to uncover and can go undetected for years. Workers have very little information about how their pay compares to other workers, and officials charged with enforcing equal pay laws lack regular access to comprehensive pay data from employers in order to gain a better understanding of pay practices and trends.
To address this problem, in 2016, the Obama administration took an important step forward, adopting a new requirement that directed large employers—those with 100 or more employees—to submit their pay data to the Equal Employment Opportunity Commission (EEOC) on an annual basis. The data were to be included on an existing form called the Employer Information Report, or EEO-1 form, that employers are already required to file each year. The form consists of 10 broad occupational categories, such as technicians and service workers, and employers are required to provide a breakdown of their workforce by race, gender, and ethnicity for each category. The Obama administration action added a new pay data component to the form, requiring covered employers to provide pay data for each occupational category listed broken down by race, gender, and ethnicity. Employers would file the new form for the first time in March 2018, allowing them ample time to make internal adjustments to comply with the new requirement.
However, at the end of August 2017, the Trump administration directed the EEOC to halt implementation of the Obama administration measure. The directive—outlined in a two-page memo to the EEOC from the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA)—identifies concerns about employer burden, new technical data specifications, and the form’s overall utility as the reasons for the decision to stop moving forward with the revised form. Notably, Ivanka Trump—the administration’s frequently touted point person on women’s empowerment and a self-avowed supporter of equal pay—released a statement to justify the decision, arguing that the Obama-era action had good intentions but was not likely to be effective. But these arguments tell only part of the story. It is crucial to separate fact from fiction and dispel the myths used to roll back tools, such as the revised EEO-1 form, that represent much-needed progress on equal pay.
Myth 1: The pay data that the revised EEO-1 form would collect are not useful
Reality: The EEO-1 form has played a critical, vital role throughout the EEOC’s history in helping to combat employment discrimination. Data on the racial, gender, and ethnic makeup of an employer’s workforce has been used effectively for decades as an investigatory tool to help shed light on workforce composition, workforce trends, and employer hiring practices. The data collected are not intended to be definitive proof of discrimination—rather, they provide clues on where to look to help pinpoint workforce disparities that women and people of color experience. The Trump administration has put forward no compelling explanation as to why pay data collected through the revised EEO-1 could not be used in a similar fashion. The addition of pay data could provide new insights and a fuller picture about pay differences and trends.
Myth 2: The occupational categories used on the EEO-1 form are too broad
Reality: The current EEO-1 form has 10 occupational categories, including categories such as senior officials and managers; service workers; and technicians. The revised form approved during the Obama administration did not change these occupational categories. Although different types of jobs fall under each category, the general categories have been used to evaluate workforce and industry trends and shed light on where problems may be occurring. The critique that the categories are too broad is misplaced and unpersuasive because it ignores the different layers of information that different types of data can provide. Data revealing a gender or racial disparity, for example, across an occupational category may show a trend that otherwise would not be visible and could merit further study. The fact that there are job-specific nuances within each category that also require a close review does not mean that the broad categories have no value. Such criticism ignores the fact that the EEO-1 categories have been used effectively for years. Moreover, requiring employers to provide more individualized, job-specific pay data as an alternative approach would undoubtedly spur even more complaints from employers about additional paperwork, excessive time burden, and privacy considerations.
Myth 3: Collecting pay data is unnecessary to ensure vigorous equal pay enforcement
Reality: Pay data are essential to determining whether pay disparities are present and whether discrimination is playing a role. Simply put, you cannot successfully establish that pay discrimination has occurred without access to actual pay data. Federal enforcement agencies responsible for equal pay enforcement have been hampered by the fact that they do not have comprehensive access to pay data. The revised EEO-1 form addressed that problem by providing a straightforward, confidential way for enforcement agencies to have better information that could be used to examine pay practices.
Myth 4: The form is too burdensome
Reality: The Obama administration undertook an extensive review to evaluate the burden associated with collecting pay data from employers. Options included creating an entirely new form or pursuing an option with greater familiarity for employers. After months of review, the Obama administration proposed using the EEO-1 form to collect pay data, in part, because employers complained about new burdens that would arise from a completely new data collection form. Using a familiar form strikes the right balance by collecting data that can be useful for enforcement purposes while placing an appropriate obligation on employers. While there may be some initial costs in the first year, it is inconceivable that technologically sophisticated companies that are global leaders are not capable of making the necessary adjustments—such as identifying the relevant data, determining a routine collection mechanism, and training designated staff accordingly—in order to collect pay data on an annual basis.
Myth 5: Employers’ voluntary compliance is sufficient to ensure equal pay
Reality: The fact that there are a growing number of employers who are committed to identifying and implementing effective practices to promote fair pay is an important step forward. However, voluntary compliance is not a substitute for robust enforcement of equal pay laws—nor is it an excuse not to enforce the law. Voluntary actions by employers do not diminish or change the obligation of enforcement officials to use every tool at their disposal to enforce the law fully and completely.
Myth 6: The Trump administration has been engaging all relevant stakeholders to ensure vigorous enforcement of equal pay laws
Reality: The Trump administration reached its decision almost entirely behind closed doors and under a shroud of secrecy. There was no formal public process, and it is unclear who the administration met with to reach its decision to halt the Obama measure. This lack of transparency led to an outcome that will hurt many workers and continue to leave enforcement officials in the dark about employer pay practices because of their limited access to pay data. Moreover, this lack of process stands in stark contrast to the extensive public process utilized by the Obama administration in making its decision to revise the EEO-1 form. Employers, employee advocates, academics, and experts had ample opportunity to provide comments on pending proposals and input on what tool was needed and appropriate. The final decision reached during the Obama administration sought to balance the many different perspectives and interests, trying to reduce potential burdens on employers while, at the same time, ensuring access to much-needed information for enforcement agencies.
Myth 7: The Trump administration has undertaken robust steps to promote equal pay
Reality: Despite the occasional rhetoric in support of equal pay, the Trump administration has taken virtually no action on promoting equal pay or strengthening equal pay protections. This inaction speaks volumes about the administration’s lack of commitment to vigorous enforcement of equal pay laws.
The revised EEO-1 form was an important step forward in the fight for equal pay, and the Trump administration’s decision to halt its implementation is a troubling setback. All women and men deserve equal pay for equal work, and that requires an unflinching commitment to enforcement of the law, including access to necessary tools such as comprehensive pay data.
Jocelyn Frye is a senior fellow at the Center for American Progress, where she focuses on women’s employment and economic security issues.
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