The White House will announce a new proposal to advance equal pay on Friday, the seventh anniversary of Barack Obama’s signing of the Lily Ledbetter Fair Pay Act. The policy would require all institutions that employ 100 or more people to report data on their employees’ compensation, along with standard reporting on gender, race, and ethnicity.
In a press call on Thursday, White House Senior Advisor Valerie Jarrett said that the gender wage gap, which is particularly wide for women of color, harms the U.S. in global competition. “Equal pay for equal work isn’t just a women’s issue. It’s a family issue, a business issue, and an economic issue,” she said. “Too often, pay discrimination goes undetected because people are unaware.”
The new rule comes from the Department of Labor and the Equal Employment Opportunity Commission, which has been collecting data from employers for half a century to analyze potential cases of hiring discrimination. Employers of 100 or more people currently report demographic statistics in 10 job groups; after the rule is instated, they will also have to report gender, race, and ethnicity numbers for those groups across 12 “pay bands.” EEOC Chair Jenny Yang said the commission will use the information to analyze pay disparities across industries and, once the EEOC publishes its aggregate data, it could help employers take a critical look at their own pay structures.
Yang also suggested that the data would help the EEOC launch “larger, more complex investigations” and build stronger cases when employees issue pay-discrimination complaints. She estimates that the new rule will be complete by September 2016, and companies’ data will be due in September 2017. “Collecting pay data will help fill a critical void in information we need to ensure Americans aren’t shortchanged for their hard work,” she said.
The government has required this kind of reporting from federal contractors since 2014, when Obama signed an executive order. Today’s announcement, which will hold private employers to the same standards, comes alongside two dozen new state-based measures to address pay inequity introduced this week. Those include proposals in Massachusetts and Colorado that would bar employers from asking prospective employees about their salary histories and a bill in Oklahoma that would create a formal complaint process in the state’s labor department and prevent companies from retaliating against women who use it.
On Friday, Obama will also reiterate his support for the Paycheck Fairness Act, an extension of damages and enforcement under the Equal Pay Act, which the Senate has failed to pass since it was passed by the House in January 2009. Jarrett also announced that the White House will host a summit on the state of women and girls in Washington, D.C. on May 23.
Salesforce CEO Marc Benioff remarked on Thursday’s call that U.S. corporations have already spent millions of dollars on human resources consultants; business leaders could find out if they’re contributing to pay inequality at the touch of a button. At the urging of two top-ranking female employees in 2014, Salesforce leadership audited its compensation data and found that it was paying women less. The company spent $3 million last year to raise its female employees’ salaries to the levels of their male counterparts. “We will be judged on whether we made the world a more equitable place for all,” Benioff said. “Just push that button.”