Today, March 24, 2021 is Equal Pay Day. Equal Pay Day denotes how far into the new year women must work to be paid what men were paid the previous year. Started by the National Committee on Pay Equity (NCPE) in 1996, the goal was to raise awareness about the gender wage gap. Although there are various analyses of what the gap is, all agree there is a gap.
President Biden has made it a priority for his administration to combat pay inequity. His campaign web page had posted that the new administration would "make it easier for employees to join together in class-action lawsuits, shift the burden to employers to prove that any gender-based pay gaps exist for job-related reasons and business necessity, and increase penalties against companies that discriminate" while expanding funding "to increase the number of anti-discrimination investigators, litigators, and enforcement actions." Vice President Kamala Harris said during the campaign that she wanted to make the United States a leader in the fight for pay equity.
To that end, President Biden signed an Executive Order on March 8, 2021, establishing the White House Gender Policy Council. The Council, which will report directly to the president, is expected to play a critical role in advancing the administration’s agenda by promoting gender equality in both domestic and foreign policy development. Among other initiatives, the Executive Order requires the Council to submit to the president a Government-wide strategy to address gender in policies, programs, and budgets, and an annual report to measure progress on implementing the strategy.
In addition, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs, the agency that regulates federal contractor’s employment practices, has indicated that they will also push pay equity issues, and closing racial and gender pay gaps will be an agency priority. In other words, audits will be even more engrossing, and OFCCP may redevelop a pay reporting tool (as it did in the 2014-2015 time frame). Director Yang was chair of the EEOC at the time of the EEO-1 component 2 pay reporting tool and is experienced with the ins and outs of this type of reporting.
Although currently quiet on the subject, the EEOC could bring back it’s Equal Pay Act (EPA) initiative. EEOC District offices have the authority to bring an EPA charge against an employer without a charging party if it has knowledge of disparate pay practices. In other words, if during the course of an EEOC charge investigation a witness or claimant states that they were paid less than comparators, the EEOC District Office could initiate a new EPA charge and investigation.
Furthermore, the Democratic party reintroduced the Paycheck Fairness Act (H.R. 7) to Congress in January 2021 (it was first introduced in 2009 and every new congress after). This proposed federal legislation is aimed at amending the federal law prohibiting wage discrimination on the basis of sex. This bill, if passed, imposes great burdens on employers, and assumes employers discriminated unless shown otherwise.
H.R. 7 would require employers to show that the factor underlying a pay differential: 1) is not based upon or derived from a sex-based differential in compensation 2) is job-related and consistent with business necessity and 3) accounts for the entire differential in the compensation at issue. Factors such as education or training can generally be proved to be job-related; however, it may prove to be more difficult to show that those factors serve an overriding legitimate business purpose that is consistent with business necessity for the particular position at issue. This is especially true since employers have reportedly inflated position requirements over the years for jobs that may not need a college degree or high degree of experience.
Given the consistent reporting of pay gaps, from CEO to worker, to men and women, to a variety of intersectionality, it would be a good initiative for 2021 to conduct a pay equity study of the workforce. Legal counsel should be involved to keep the findings and analysis confidential. ASE can assist in these analyses.
Additional ASE Resources
Compensation Consulting – ASE can conduct a pay analysis for your organization and assist with creating a compensation program. For more information, please contact Kevin Marrs.
Source: Fortney & Scott 3/16/21, Law Firm Alliance 2/28/21, Epstein Becker 6/22/15