Industry groups: Scrap rule for reporting employee pay

Industry groups appealed to Congress Tuesday for relief from an Obama-era pay reporting rule they claim is overly burdensome and will do nothing to ensure equal pay for equal work.

The Equal Employment Opportunity Commission (EEOC) rule requires companies with 100 employees or more to report pay data by sex and race starting in March 2018 on the annual Employer Information Report, or EEO-1 form, to further advance equal pay for women and minorities in the workplace.

Rae Vann, vice president and general counsel of the Equal Employment Advisory Council, told the House Education and the Workforce Subcommittee on Workforce Protections Tuesday that the data being collected is arbitrary. 

“Employers do not compensate their employees the same way,” she said. “There are a myriad of variables that go into calculating an individual employee’s or a class of employees’ pay.”

During the subcommittee hearing, titled “The Need for More Responsible Regulatory and Enforcement Policies at the EEOC,” subcommittee Chairman Bradley Byrne (R-Ala.) asked if the pay data the EEOC collects will be sufficiently refined or rigorous enough to be used as evidence in court in efforts to enforce anti-discrimination laws.

Vann said she doesn’t believe it will.

“What the data collection purports to do is provide enforcement agencies or other outsiders summary data, which inherently is comparing apples to oranges,” she said. “They are not comparing similarly situated individuals.”

Camille Olson, who chairs the U.S. Chamber of Commerce’s Equal Employment Opportunity Subcommittee, testified that the EEOC underestimated the cost of its reporting rule by $350 million.  

“Would this error and the burden estimate constitute grounds for the Office of Management and Budget to rescind its prior approval of the pay data collection?” Byre asked.

Olson said it would.

“The Paperwork Reduction Act compels OMB to review and rescind a previously approved data collections device if the agency that proposed it substantially underestimated its burden,” she said, adding that OMB could review, rescind or stay the effectiveness of the rule. 

But Todd Cox, director of policy at the NAACP Legal Defense and Educational Fund, said the critique that the data collection is flawed does not remove the need to address pay discrimination.

“What the EEOC would do with the data that has not really been discussed is not only use it as an enforcement tool, but provide an aggregate look at where we are in respect to pay discrimination regionally, by industry,” he said. “They could do reports to inform the public and employers about pay discrepancy.”

Cox recommended industry partner with the agency to improve the rule.

“I don’t think the answer is not to comply with the need to resolve pay discrimination,” he said.