Unequal pay based on gender is under fire on two fronts. The Equal Employment Opportunity Commission is moving aggressively to combat this kind of discrimination by enforcing existing law, and also with a controversial proposal. If passed, that proposal will greatly increase the reporting burden on employers. Here are the details.

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EEOC Takes Aim at Gender-Based
Pay Discrimination

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When the Equal Employment Opportunity Commission (EEOC) settles a case
involving gender-based pay discrimination, they routinely publicize the
results.
A recent case highlighted by the EEOC (EEOC v. Gilbert Foods, a food service
distributor) was brought by a seasoned female "order selector." When she
learned she was being paid less than newly hired and less experienced men
doing the same work, she told coworkers she planned to file a discrimination
case. However, before she filed, word of her plans reached a senior manager.
The manager then informed her direct supervisor that the female order
selector would be terminated "without making it appear unlawful," according
to an EEOC description of the case.

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By this attempt at retaliation, Gilbert Foods compounded its basic violation of
the Equal Pay Act. As a result, the company was required to:
• Give the female order selector back pay,
• Provide her with compensatory damages,
• Pay her attorney fees, and
• Agree to regularly report to the EEOC concerning its compliance practices.

4. "Substantially Equal"
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Illegal pay discrimination isn't always that blatant, however. For one thing,
paying a woman less than a man (or vice versa) for a job that isn't identical
can be deemed discriminatory if the two jobs are only "substantially equal,"
perhaps a subjective standard. "Job content, not job titles, determines
whether jobs are substantially equal," says the EEOC.
The agency also states that "all forms of pay" are covered by the Equal Pay
Act. That includes not just salary or wages, but overtime pay, bonuses, stock
options, profit sharing and bonus plans, life insurance, vacation and holiday
pay, other employee benefits, and reimbursement for travel expenses.

5. Hidden Discrimination
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The EEOC is concerned that there's a lot of gender-based pay discrimination
occurring that victims are unaware of — and therefore the practice is not
confronted. Typically, the discovery of a pay inequality (by the party earning
less) happens inadvertently. For example, that person may stumble across a
discarded pay stub.

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Employers need to be aware that, if
they do find their pay practices are
discriminatory, the company
cannot remedy the imbalance by
reducing the pay of the higher paid
worker to match that of the lower-
paid one.
Employers also should know that an
employee who discovers he or she
has a pay discrimination case may
have up to three years from the
time of a willful violation (or two
years if not willful) to file a claim
with the EEOC.

7. Going Forward
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The EEOC proposed a remedy for hidden discrimination, which, if enacted
without changes, will greatly increase the reporting burden on employers. The
proposal, made on February 1, applies to employers having at least 100
employees.
The additional reporting would require employers to segment certain workers
based on gender, race and ethnicity. The workers in question are those who
fall within 12 pay bands for each of the 10 job categories described in the
regulations. This information would be added to employee census data
supplied annually on a form known as EEO-1.
If adopted as proposed, the rule would apply to EEO-1 forms submitted for
the year ending Sept. 30, 2017.

8. New Compliance Cost?
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The National Federation of Independent Business (NFIB) complained that the
expanded EEO-1 form would grow to "over 3,500 data cells," and require
covered employers to spend "significant time and money figuring out what
and how to report.“
The EEOC justifies the proposal this way: "Collecting this pay data will help fill
a critical void in the information we need to provide [us] with insight into pay
disparities across industries and occupations … [and] more effectively focus
investigations, assess complaints of discrimination, and identify existing pay
disparities that may warrant further examination."
The EEOC says it will also publish data "in aggregate form" to help employers
determine "if they are paying employees fairly, and if their pay is in line with
regional and industry practices."

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Here are several of the concerns about the proposal, raised by the NFIB in a
March 16 hearing:
• The reporting period for the data would be October 1 thru September 30,
instead of the calendar year. Because employers use the calendar year for
compiling W-2 data, the data gathering would be burdensome.
• A requirement to report the number of hours employees worked would
be difficult because hours worked by exempt employees are not generally
tracked.
• Although reported data is supposed to be kept confidential, the NFIB is
worried that some of it will leak out, compromising sensitive company
information.
• There is a potential for EEOC misuse of employer reports. "The data will
not provide sufficient information to identify discrimination among
similarly situated individuals," the NFIB states. For example, "pay
disparities can occur for many, many legitimate reasons, including
experience, relevant and related education and training, part-time work,
and breaks in employment, none of which will be reflected in the data
collected."

10. What Should Your Company Do Now?
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Whatever the fate of the proposed regulations, a prudent response to this
issue is to conduct at least a basic internal review. The focus of such a review
should be to ensure that conditions don't exist that could support allegations
of pay discrimination.

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