New Pay Discrimination Bill Would Let Government Collect Payroll Records of Private Companies

By Matt Cover, Staff Writer
CNSNews.com
Mar. 15, 2010

(CNSNews.com) - A bill taken up by a Senate panel on Thursday would empower the federal government to collect the payroll information of private companies and analyze it in an effort to prevent gender-based pay discrimination, which has been illegal since 1963.

The law would compel the Equal Employment Opportunity Commission (EEOC) to begin mandatory collection of payroll data from private employers, under penalty of law. These data must be broken down by job type, race, and, gender. The government would then analyze the data to determine if companies are violating equal pay laws, which prohibit pay discrimination based on gender.

Known as the Paycheck Fairness Act, the law was passed by the House of Representatives more than one year ago – Jan. 9, 2009 – but had languished in the Senate until Thursday, when it was taken up in the Senate Health, Education, Labor, and Pensions (HELP) Committee.

EEOC Acting Chairman Stuart Ishimaru, who testified before the HELP committee on Thursday, told CNSNews.com that the law would require the EEOC to collect payroll data from private companies. However, he said that it was still “to be determined” if companies would have to report automatically, a decision that would be left up to the EEOC.

“We would be required – it is my understanding under the Paycheck Fairness Act – to collect in some form pay data,” he said. “Now what that would look like in the end is a matter to be determined, if it passes, but it’s not automatic disclosure; we are tasked actually with, and actually (will) come up with the procedure to do that.”

The collection is not optional, and the government can sue companies who refuse to comply with the EEOC’s order.

“That’s a legal matter,” said Ishimaru. “They’re actually required to comply. (And) that actually does happen from time to time, people won’t comply,” forcing the EEOC to take the company to court.

Ishimura said that the EEOC would analyze the data to look for discrepancies that might indicate discrimination. If the EEOC determined that a company might be discriminating, it would then begin a full investigation.

“We would analyze to see whether there were discrepancies (in pay), said Ishimura. We collect race, national origin, (and) gender data now from many companies around the country and we analyze to see what the composition of the workforce looks like, whether their might be discrimination, and whether it’s worth opening an investigation or not.

He said that finding discrepancies was just “the start” of a process that would entail taking a detailed look at all aspects of a company’s pay and hiring information.

“It’s certainly the start of the analysis to see whether there might be discrimination,” he said. “There might be discrimination if somebody hasn’t hired women or hasn’t hired an Asian American -- that certainly may be indicative that their may be a problem that would be worthy for us to open an investigation. You would (then) do an analysis to see what, in fact, happened, and the same thing for pay data. Getting the (pay) information is the start of the analysis, it’s not the end.”

Senator Tom Harkin (D-Iowa), chairman of the HELP committee, said that the law would close loopholes in the law and “barriers to enforcement” of anti-pay discrimination laws. Harkin said that the compulsory disclosure of pay information would help women who think they have been discriminated against circumvent the formal investigative process into discrimination.

“There are too many loopholes in our existing laws and too many barriers to effective enforcement,” Harkin said. “Right now, women who believe they are the victim of pay discrimination must file a lawsuit and endure a drawn-out legal discovery process to find out whether they make less than the man working beside them.”

“With pay statistics readily available, this expensive process could be avoided.”

While the law would not change the legal discovery process, it would make companies’ payroll data available to EEOC monitors and investigators, other federal agencies, and the public in confidential, aggregate form.

Currently, employers must disclose to the EEOC the racial and gender breakdown of different job types and the EEOC must publish state-by-state breakdowns of this information. For an example, click here.

Sen. Mike Enzi (R-Wyo.) (CNSNews.com/Penny Starr)“The EEOC collects workforce data from employers with more than 100 employees (lower thresholds apply to federal contractors). Employers meeting the reporting thresholds have a legal obligation to provide the data; it is not voluntary,” the EEOC’s Web site states.

Employers must fill out one of five different reports and file them with the EEOC.

“Each of the reports collects data about gender and race/ethnicity by some type of job grouping,” states the EEOC. “This information is shared with other authorized federal agencies in order to avoid duplicate collection of data and reduce the burden placed on employers. Although the data is confidential, aggregated data is available to the public.”

The law would have the EEOC survey what information it currently has on companies’ pay and draft new regulations on how it will go about collecting more information and which companies it will collect it from.

“Not later than 18 months after the date of enactment of this subsection, the Commission shall -- (A) complete a survey of the data that is currently available to the Federal Government relating to employee pay information for use in the enforcement of Federal laws prohibiting pay discrimination and, in consultation with other relevant Federal agencies, identify additional data collections that will enhance the enforcement of such laws; and B) based on the results of the survey and consultations under subparagraph (A), issue regulations to provide for the collection of pay information data from employers as described by the sex, race, and national origin of employees,” the law says.

Senator Mike Enzi (R-Wyo.) the ranking Republican on the HELP committee, said these new requirements would further burden businesses without reducing wage differences between genders, which he attributed to labor market variations, not discrimination.

“Many labor specialists note that pay differences are a function of labor market economics, that they reflect the choices that individual workers and groups of workers tend to make and their underlying skill sets,” Enzi said on Thursday. “The bill adds more burdensome government reporting requirements that don’t just waste hours of employers’ time, they also cost them money that could be directed towards new hires.”