Proposed Bill imposes pay data collection roles for OFCCP and EEOC

On January 28, 2021 Congresswoman Rosa DeLauro (D) reintroduced the Paycheck Fairness Act as H.R. 7. The previous proposed legislation was passed in the House of Representatives in 2019; however, has never been given a vote in the Senate. The next move for H.R. 7 will be consideration by the House Committee on Education and Labor before sending it for a full House of Representatives floor vote. However, it is almost a given that it will pass the House with the Democrats supporting the bills co-sponsors. In February 2019, the House approved a similar, but not identical Bill.

The current version would address the gender wage gap by amending the equal pay provisions of the Fair Labor Standards Act (FLSA) to:

• Exclude “any of factor other than sex” from the bases on which pay disparities may be legally acceptable;
• Strengthen non-retaliation prohibitions;
• Increase civil penalties for violations of equal pay violations; and
• Prohibit requiring an employee to sign a waiver barring them from disclosing information about their wages.

The proposed Bill will require the OFCCP to:

• Investigate employer compensation practices and “implement a survey to collect compensation data and other employment-related data (including hiring, termination, and promotion data) and designate not less than half of all non-construction contractor establishments each year to prepare and file such survey, and shall review and utilize the responses to such survey to identify contractor establishments for further evaluation and for other enforcement purposes as appropriate;”
• Ensure that its staff is equipped with “the full range of investigatory tools at the Office’s disposal, including pay grade methodology;
• Provide training to OFCCP employees and “affected individuals and entities on matters involving discrimination of the payment of wages,”
• Define “similarly situated employees” in the manner in which defined by the EEOC; and
• Not limit the type or method of evaluation of evidence to a small number.

The proposed Bill will require EEOC to:

• Amend Section 709 of Title VII to add a subsection requiring the Agency to undertake a pay data collection from employers of “compensation data and other employment-related data (including hiring, termination, and promotion data) disaggregated by the race, sex, and ethnic identity of employees.”

OutSolve's Insight

The bill as proposed seems to be confusing the OFCCP, part of the Department of Labor, and an Executive Branch agency, with the EEOC, an independent agency. It’s also not clear how the authors think the EEOC could be empowered, on its own, to modify the wording of Title VII. That would seem to be up to Congress.

If the bill excludes from consideration in evaluating pay, “any factor other than sex”, what’s left? Just three things: seniority systems, merit systems, and systems that measure earnings by quality or quantity of production. Gone would be “a differential based on any factor other than sex”. That would seem to prevent employers from setting starting pay based not just on prior pay, but also prior experience, or market value. It would seem to be pretty difficult not to be able to find pay differences between genders.

Regardless of what happens with the proposed Paycheck Fairness Act, it’s clear that there is going to be an increasing emphasis on pay gaps, and on more reporting of compensation data. Employers should take proactive steps to analyze their pay practices and current employee compensation. OutSolve can assist employers with analyzing their pay practices with a variety of statistical models and consulting services.