President Obama Takes Aim at Stubborn Gender Pay Gap with New Data Collection Effort

On January 29, President Obama announced an executive action that will require companies with 100 employees or more to report to the federal government how much they pay their employees, broken down by gender, race and ethnicity.  The action is part of a larger effort to close the pay gap between men and women.

Currently, such employers are required to submit data on employees categorized by race/ethnicity, gender and job category.  The proposed regulations will add aggregate data on pay ranges and hours worked.  This expands on a 2014 executive order that requires the Department of Labor to collect such information from federal contractors.

According to the Equal Employment Opportunity Commission, the data will “assist the agency in identifying possible pay discrimination and assist employers in promoting equal pay in their workplaces.”

The median annual wage for a woman who works full time is around $39,600, which is 79 percent of a man’s median earnings of $50,400.  This gap is even larger when comparing the earnings of black and Hispanic women to those of white men.

While some of the disparity can be explained by differences in the number of hours worked or the type of careers pursued by each gender, the Obama Administration argues that “there is good evidence that discrimination contributes to the persistent pay disparity between men and women.”

A new issue brief by the Council of Economic Advisors reports that the current gender pay gap in the United States is approximately 2.5 percent higher than other industrialized nations.

California passed the nation’s strongest pay equity legislation in 2015.  Under the Fair Pay Act, which took effect January 1, employers are prohibited from paying a female employee less than a male employee for “substantially similar work,” even if they have different job titles or work sites.

Sen. Hannah-Beth Jackson, sponsor of the legislation, told the Los Angeles Times that the new federal rules will help the state implement its new law.

“Companies will have to come forward with that data,” she said. “That's always been a big problem — what can we show? What can we do to identify where the problems are or that the problems even exist?”

The proposed regulation will be jointly published by the U.S. Equal Employment Opportunity Commission (EEOC) and the Department of Labor. The rules will be completed by September, with the first reports due in September 2017.