The U.S. Equal Employment Opportunity Commission (EEOC) has announced plans to release a proposed rule in the upcoming year on collecting pay data from employers. This initiative, highlighted in the spring regulatory agenda published on July 5, aims to reinforce Title VII of the Civil Rights Act of 1964 and the Equal Pay Act of 1963.
Key Points of the Proposed Rule:
Purpose: The proposed rule is designed to enhance enforcement of existing pay equity laws and gather comprehensive pay data by race, sex, and job category from large employers. The EEOC will seek public comments on the proposal, ensuring a collaborative approach in its formulation.
Historical Context: This move could potentially resurrect an Obama-era mandate that required large businesses to annually report their pay data to the EEOC. This requirement faced legal challenges during the Trump administration and was eventually discontinued pending further study. The current Democratic majority in the EEOC has shown renewed interest in reinstating this data collection.
Implications for Employers:
Data Reporting: Employers may need to prepare for detailed annual reporting of employee pay data, categorized by race, sex, and job category.
Compliance and Recordkeeping: Businesses must ensure robust systems are in place for accurate data collection and reporting to comply with the proposed regulations.
Impact on DEI and Pay Equity Initiatives:
Enhancing Transparency: The proposed rule aims to bring greater transparency to pay practices, shedding light on potential disparities in compensation across different demographics.
Driving Accountability: By requiring detailed reporting, the rule can drive organizations to scrutinize, and address pay inequities, fostering a more inclusive workplace.
Supporting DEI Efforts: Enhanced data collection and analysis can provide valuable insights for DEI programs, enabling targeted interventions to promote diversity and inclusion.
Broader Context:
The U.S. Department of Labor (DOL) is also set to propose a rule to modernize compliance programs for federal contractors, aligning with Executive Order 13988 to prevent discrimination based on gender identity or sexual orientation.
Stay Informed:
As this policy develops, it is crucial for HR professionals and business leaders to stay informed and proactive. Engage with industry resources, participate in public comments, and prepare your organization for potential changes.
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