A Victory for Equal Pay

March 07, 2019

 

Court ruling requires companies to report pay data by gender, race

Closing the gender wage gap will take work on many fronts, but one key tool is having more information about salaries. Removing the shroud of secrecy about who earns what is a critical step towards ensuring equal pay for equal work.

The latest sign of progress on this front: A ruling by a federal district court judge in D.C. that said the government acted illegally when it stopped the Equal Employment Opportunity Commission (EEOC) from collecting pay data by gender, race and ethnicity from large companies. Tanya S. Chutkan, a U.S. district judge for the District of Columbia, ordered the government to move forward with a requirement that large employers confidentially provide pay data to EEOC by May 2019.

The court’s decision reinstates a 2016 initiative requiring that private employers and federal contractors with more than 100 employees report compensation information to the EEOC by sex, race and ethnicity, in different job categories. The goal of collecting this data is to enable the EEOC to better identify trends in pay discrimination. It would also highlight potential problematic pay practices and implicitly encourage employers to proactively identify and correct disparities.

The Trump Administration halted the pay-data collection in August of 2017 in response to opponents, who felt it created a costly and unfair burden on employers. Subsequently, three advocacy groups —The National Women’s Law Center, Democracy Forward and the Labor Council for Latin American Advancement — filed a lawsuit challenging the move. This week, the D.C. federal court sided with the plaintiffs, saying that the government failed to justify why it stopped collecting the data and that it hadn’t offered a legally proper explanation of why it did so.

The court’s decision is a welcome one. AAUW has long advocated for pay-data collection so that employers and enforcement agencies are better able to analyze and act on pay disparities. AAUW supports passage of the proposed Paycheck Fairness Act (H.R. 7), which would prompt additional research and pay data collection on a federal level. And AAUW endorses state and local initiatives on salary reporting requirements.

What’s more, AAUW also advocates for policies that would ensure an even greater level of transparency about wages, such as legislation that prohibits retaliation against employees who share salary information.

The reality is that it is hard to know the full scope of pay inequity if it isn’t measured. With this federal pay data collection moving forward, employers and enforcement agencies can better develop solutions to close the gender pay gap.