EEOC Announces Pay Data Rule to Combat Workplace Pay Discrimination
There is good reason that Bay Area residents readily bandy about slang terms such as “tech bro” and “brogrammer”—terms that evoke a distinctive image—a tech scene made up of young male employees. Although the wage gap persists nationwide, recent reports have shown that both hiring and pay disparities are particularly pervasive in Silicon Valley, from entry-level positions to the boardroom. For example, a recent SF Chronicle article reported that the median pay for female executives is nearly $893,000 less than their male counterparts. Another report found that men in Silicon Valley holding bachelor, professional, or graduate degrees made 52 to 61 percent more than their female counterparts.
In recognition of this chronic disparity and in conjunction with the White House commemoration of the seventh anniversary of the Lilly Ledbetter Fair Pay Act, the EEOC announced a proposed rule aimed at combating pay discrimination in the workplace. The new rule will direct all employers, including federal contractors, with 100 or more employees to submit to the EEOC pay data by sex, race, and ethnicity by job category. According to EEOC Chair Jenny Yang, the information “will assist employers in evaluating their pay practices to prevent pay discrimination and strengthen enforcement of our federal anti-discrimination laws.”
The first stated goal of the proposed rule is to incentivize employers to engage in self-analysis and remedy pay disparities without the need for external intervention. For example, the CEO of Salesforce.com, a proponent of the measure, discovered unintentional pay disparities at his company after being approached by two female employees and is now remedying the problem internally. As a practical matter, however, it is unlikely that all pay disparities will be voluntarily resolved. Litigation is inevitable, and these reports will provide employee-litigants with a powerful tool to combat wage discrimination—particularly when used in conjunction with California’s recently passed Fair Pay Act, which requires equal pay for employees performing “substantially similar” work.