Business groups blast new pay reporting rule

Business groups are firing back at the Obama administration’s plan to force companies with 100 or more employees to report pay by race, ethnicity and gender in an effort to close pay gaps in workplaces.

The White House announced last week that the Equal Opportunity Employment Commission (EEOC) is drafting the rule due out in September in partnership with the Department of Labor.  EEOC Chairwoman Jenny Yang said the new data will be used to aid investigations, assess complaints and identify existing pay disparities that warrant further examination. 

Both the Retail Industry Leaders Association (RILA) and the U.S. Chamber of Commerce, however, said it will be overly burdensome for employers to comply with the rule.

Because companies will be required to report compensation data for extremely broad job categories, including professionals, technician and sales employees, RILA said the rule ignores the fact that employees are paid differently based on their skills and that there are often regional differences in compensation.

“The EEOC’s proposal fails to recognize the substantial shortcomings of the resulting data,” Kelly Kolb, RILA’s vice president of government affairs, said in a statement. “Requiring businesses to provide potentially thousands of data points for each location would obscure, not illuminate, relevant information.”

While the chamber supports nondiscrimination in compensation, it said the type of reporting proposed will create unnecessary burdens while providing no meaningful insight as to whether employer pay practices are discriminatory.

“Clearly the administration has embarked on one more fishing expedition to support a political agenda divorced from the facts,” Randy Johnson, the chamber’s senior vice president of labor, immigration, and employee benefits, said in a statement. “Sound bites don’t make sound policy.”

The rule was announced last Friday on the seventh anniversary of the Lilly Ledbetter Fair Pay Act. That law, which Obama signed in 2009, aims to make it easier to challenge unequal pay by giving workers 180 days from the receipt of each discriminatory paycheck to file a lawsuit.

The National Federation of Independent Business (NFIB) said it’s still reviewing the proposed rule.

“We don’t know enough yet about why they want the data and what they’ll use it for,” Jack Mozloom, an NFIB spokesman said. “It’s likely we’ll submit comments later on, but right now we’re still chewing on it.”

The EEOC is giving the public until April 1 to submit comments.