On January 29, 2016, the U.S. Equal Employment Opportunity Commission (“EEOC”) announced a major proposed regulation change that would increase pay transparency for employers with 100 or more employees and help fight pay inequities based on a person’s protected status.

The EEOC is the government agency responsible for enforcing the federal anti-discrimination laws, including the laws that prohibit discrimination based on race, color, religion, gender (including pregnancy), national origin, age (40 or older), and disability. The EEOC also enforces the federal Equal Pay Act of 1963, which prohibits unequal pay based on gender.

By law, private employers with 100 or more employees have to file with the EEOC an annual Employer Information Report, called an EEO-1. The EEO-1 helps the EEOC to enforce the anti-discrimination laws by collecting from these larger employers data about their employees’ ethnicity, race, and gender, by job category.  On January 29th, the EEOC proposed changing the EEO-1 reports so that in addition to disclosing this worker profile information, employers would also be required to disclose employees’ W-2 earnings and hours worked.

Employers who file EEO-1 forms already maintain this employee pay information in the ordinary course of business, but the new requirement would allow the EEOC critical access to this pay data analyzed across worker profiles by ethnicity, race, gender, and job category to ensure equal pay compliance.

According to the EEOC’s Press Release, the purpose of the proposed change is to offer the EEOC with greater insight into the pay disparities across industries and occupations and strengthen federal efforts to combat discrimination. The EEOC plans to use this pay data to assess complaints of discrimination, focus agency investigations, and identify existing pay disparities that may warrant further examination.

As EEOC Chair Jenny R. Yang cites, “More than 50 years after pay discrimination became illegal it remains a persistent problem for too many Americans . . . Collecting pay data is a significant step forward in addressing discriminatory pay practices. This information will assist employers in evaluating their pay practices to prevent pay discrimination and strengthen enforcement of our federal anti-discrimination laws.”

Although EEO-1 data is confidential for the EEOC, aggregated data is available to the public and can also assist in weeding out pay disparities by allowing for greater employee consciousness of pay disparities across industries and occupations so that they can stand up against these discriminatory practices and encourage their employers to remedy them.

If enacted as law, the proposed change would take effect in September of 2017. The current proposed change to EEO-1 data is open for public comment on the Federal Register website until April 1, 2016: https://www.federalregister.gov/articles/2016/02/01/2016-01544/agency-information-collection-activities-revision-of-the-employer-information-report-eeo-1-and

For more information about the EEOC’s plan to help increase pay transparency for employers, visit the EEOC’s Press Release on the Proposed Regulation Change, available at http://www.eeoc.gov/eeoc/newsroom/release/1-29-16.cfm