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Once in a while, everyone might feel like Bill Murray in “Groundhog Day”, wondering whether we are living the same day at work over and over again. A persistent question, though, is whether everyone is being paid lawfully for doing so.
Last Friday, seven years to the day that President Obama signed the Lilly Ledbetter Fair Pay Act on the day of his inauguration, the Equal Employment Opportunity Commission (EEOC) announced proposed changes to its EEO-1 report. Beginning next year, employers with 100 or more employees – whether or not those employers are federal contractors – would be required to submit data on employee W-2 earnings and hours worked, broken down by race/ethnicity and gender. There are about 60,000 such employers.
The EEOC proposes the addition of the new pay and the use of the new form data to annual EEO-1 reports because it believes the new data will assist the agency in identifying possible pay discrimination and will assist employers in analyzing equal pay issues in their workplaces.
There is a much discussed gender pay gap (often described as women making 77 cents for every dollar earned by a man). Less clear, though, is how well that aggregate statistic holds over gender differences in occupation, education, and work schedules. According to a study by Claudia Goldin, a Harvard economist, the gender pay gap narrows to 90 cents on the dollar when these factors are considered. But at the same time, gender pay gaps within occupations are even more distinct than across occupations. Dr. Goldin notes that private changes to the labor market, particularly in how jobs are structured and remunerated, could considerably reduce these gaps. Such change already occurs across the technology, science and healthcare sectors, but less so in corporate, financial and legal sectors.
Employers might be well served to make this analysis now, and take a hard look at any areas of concern.