Why it matters

In January, the Equal Employment Opportunity Commission (EEOC) announced that it would begin collecting information from employers about pay data as part of a push for equal pay. The proposed rule generated its share of critics including Sen. Lamar Alexander (R-Tenn.), who introduced a bill that would amend the agency's proposed data collection. Instead of adding to the EEOC's workload, the Commission should focus on the backlog of discrimination charges pending at the end of the year, the Senator suggested in the EEOC Reform Act, requiring the agency to reduce its pending charges to not more than 3,660 of the 76,408 pending at the end of 2015 before beginning any collection of pay data. The legislation would also require the EEOC to thoroughly research the cost of collecting and securing the pay data, with a test of its systems on data from federal employees before turning to the private sector.

Detailed discussion

President Barack Obama celebrated the seventh anniversary of the Lilly Ledbetter Fair Pay Act by announcing that the Equal Employment Opportunity Commission (EEOC) will further the push for equal pay by requiring employers to report pay data.

At his direction, the agency proposed a revision to the Employer Information Report (EEO-1) that would instruct employers to report information about the wages paid to their workers. Specifically, federal contractors with 50-99 employees and private employers with at least 100 employees would add pay data to their annual EEO-1 report, which currently includes information about the number of individuals employed by job category, race, ethnicity, and sex.

Employers would share workers' total W-2 earnings for a 12-month period (to ensure the inclusion of compensation information including commissions, tips, and bonuses), for both full-time and part-time employees. The agency opened the proposal up for a 90-day public comment period set to conclude April 1.

The proposal received mixed reviews. While some praised the effort to reduce wage inequality, employers expressed concerns about confidentiality, additional compliance requirements, and the likelihood of an increase in enforcement actions based on the new data.

Sen. Lamar Alexander (R-Tenn.) took his concerns one step further, introducing legislation that would establish prerequisites and boundaries to the EEOC's proposed data collection. Senate Bill 2693, or the EEOC Reform Act, would mandate that the agency prioritize pending charges (76,408 at the end of fiscal year 2015) in lieu of taking on new responsibilities.

"The staggering increase of data proposed to be collected by the Equal Employment Opportunity Commission through the proposed revision of the EEO-1 report does not comport with that stated purpose of the Paperwork Reduction Act," according to the measure. "The Commission failed to provide a detailed explanation of how the Commission will track, verify, compile, ensure confidentiality of, and protect the new information, and how the Commission will use that information in enforcement efforts."

Pursuant to the bill, the EEOC would collect information identical to that in the proposal from each head of a department or federal agency to create an annual report—a trial run on federal employees, so to speak. The agency would then be required to collect and compile information on the number of EEOC employees and hours necessary to carry out that task "that were transferred from reducing the number of pending charges of discrimination before the Commission."

That data will provide the basis for an estimate of the number of employees and hours that it will cost the EEOC to handle "tracking, verifying, compiling, ensuring confidentiality of, and protecting the information" for private sector employers, which must be provided in an annual report to Congress.

Sen. Alexander also proposed that the EEOC create a comprehensive plan—with an accompanying report to Congress—for its data collection from private employers, including developing software, how it will use the information in its enforcement efforts, and ensuring the confidentiality of the stored data, complete with specific examples.

And the Commission "may not implement" any of the requirements set forth in the bill "until the Commission reduces its inventory of pending charges to not more than 3,660." If the revised EEO-1 is implemented before the legislation takes effect, the Commission will stop implementation until it complies with the bill.

Introduced in March, the legislation was referred to the Senate Committee on Health, Education, Labor, and Pensions, where it remains.

To read S. 2693, the EEOC Reform Act, click here.