A new court ruling requires that companies with at least 100 employees will have to provide the U.S. government with data about worker pay by race, ethnicity and sex. Reporting may start as soon as this spring.
The Equal Employment Opportunity Commission (EEOC) finalized the expanded gender pay report in the summer of 2016, but its implementation was suspended by the Office of Management and Budget (OMB) after President Trump took office. The National Women’s Law Center and other groups sued and got a favorable decision on March 4. According to Judge Tanya Chutkan, the government didn’t give a good reason for its decision.
The OMB could appeal, so it’s not clear whether companies will have to start reporting by May 31, the original deadline.
Emily Martin, vice president for education and workplace justice for the National Women’s Law Center, said that transparency in pay is just one step to having “equal and fair pay” for employees.
Employers already submit demographic data in a one-page form to the EEOC annually. The new disclosures would call for more information that could fill up 10 pages
The U.S. Chamber of Commerce strongly opposed the expanded reporting because it would cost businesses at least $400 million annually while the EEOC says it’s about $53 million only.
Martin said that the companies are “being asked to submit the data they already collect.”
The pay data, like the demographic data provided to the EEOC is confidential. However, research shows that the report should be measured and analyzed to have an effect. In Denmark, companies with over 35 employees are required to report pay data by gender and the gender pay gap was reduced by 7 per cent.
Once the gender pay gap data is available, investors and activists would want transparency. “We want to be able to measure apples to apples on how companies are doing on narrowing those gaps,” Arjuna Capital managing partner Natasha Lamb said