Written By Digital Content Editor Thomas Ahearn
On July 28, 2022, the U.S. Equal Employment Opportunity Commission (EEOC) announced the issuing of a consensus study report titled “Evaluation of Compensation Data Collected Through the EEO-1 Form” which studied the EEOC’s historic and first-time collection of pay data from certain private employers and federal contractors completed in 2020, according to a press release from the EEOC.
Issued by the National Academies of Sciences, Engineering, and Medicine, the study confirmed that the data EEOC collected may be used effectively by the agency to help focus its resources to identify pay discrimination and offered short-term and long-term recommendations for improving pay data collection by the agency if undertaken in the future. Specifically, the study commissioned by the EEOC in 2020 found:
- Collecting pay data is necessary to assess pay practices and differences in compensation by sex, race, and ethnicity.
- The data the EEOC collected is unique and no other federal data collection captures the same information from private-sector employers.
- Response rates from employers submitting pay data were about 90% for this historic, first-time data collection, covering approximately 70,000 employers and over 100 million workers in each collection year, even though EEOC was not able to identify every eligible firm.
- Pay data would enable the EEOC to pursue a more data-driven approach to investigation and resolution of discrimination charges and could be used to help prioritize investigations and the allocation of resources; identify systemic discrimination; and analyze national, regional, and industry-based pay gaps.
- To improve the EEOC’s ability to enforce the law and address pay disparities, the EEOC should expand and strengthen its data collections. It recommended several short- and long-term improvements that would not only enhance the reliability of any future pay data collection, but would also make it easier for employers to produce the information.
For example, the study report found that one employer had a -51.3 percent pay gap for Black men compared to white men in the professionals job category, another employer had a -52.3 percent pay gap for Hispanic female professionals relative to white male professionals, and a third employer had a -52.4 percent pay gap for Asian female technicians compared to white male technicians. The study report is available here.
“The study confirmed what we at the EEOC have long known – collecting and analyzing pay data can be a useful tool in preventing and combating pay discrimination in American workplaces,” EEOC Chair Charlotte A. Burrows stated in the press release. “The National Academies’ rigorous examination of the Commission’s historic first pay data collection validates our efforts to collect and use compensation data to achieve pay equity in our nation.”
Chair Burrows added: “Pay discrimination continues to be a significant impediment to economic fairness for millions of workers, which, in turn, harms the nation. Yet pay discrimination is hard to fight, because it’s hidden from view. This study confirms that federal pay data collection could be a unique and critically important resource for helping the Commission better identify and combat pay discrimination.”
The EEOC – a U.S. government agency that enforces federal employment discrimination laws – can file equal pay discrimination lawsuits against employers who allegedly violate the Equal Pay Act of 1963 (EPA) and Title VII of the Civil Rights Act of 1966 (Title VII). Both Acts prohibit sex-based wage discrimination. However, the gender gap in pay has remained relatively stable in the United States over the past 15 years.
In 2020, women earned 84 percent of what men earned, according to a Pew Research Center analysis, and women would have to work an extra 42 days to earn what men did in 2020 based on this estimate. As a result, laws prohibiting employers from asking about salary history have increased to narrow the gender pay gap. As of 2022, salary history question bans exist in many major American cities and several states.
“Pay equity” is a means of eliminating sex and race discrimination in the wage-setting system, which means that the criteria employers use to set wages must be sex- and race-neutral, according to the National Committee on Pay Equity (NCPE), a coalition of women’s and civil rights organizations working to eliminate sex- and race-based wage discrimination and close the wage gap between women, as well as people of color, and men.
“When an employer has a background screening firm perform past employment verifications as part of a pre-employment background check on a job applicant, it is critical that the screening firm knows which cities, counties, and states prohibit salary history questions, or else that employer could be fined or sued,” explained Attorney Lester Rosen, the founder of Employment Screening Resources (ESR), a service offering of ClearStar.
Employment Screening Resources (ESR) – a service offering of ClearStar, a leading Human Resources technology firm specializing in background checks, drug testing, and occupational health screening – offers flexible and customizable employment verification solutions for employers in all industries that closely follow federal, state, and local salary history and pay equity laws. To learn more, contact ESR today.
NOTE: Employment Screening Resources (ESR) – a service offering of ClearStar – does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.
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