Greater than half a decade in the past, the nation’s prime office civil rights enforcement company started a high-level examination of how U.S. employers paid their workers, an experiment it stated was meant to measure the nation’s degree of pay inequity.
The gathering, often called the U.S. Equal Employment Alternative Fee’s 2017 and 2018 EEO-1 Part 2, didn’t sit properly with all constituencies. Employers and management-side authorized counsel challenged the hassle’s utility, practicality and total necessity — a debate which will have partly contributed to the one-off nature of the gathering, which EEOC didn’t renew for subsequent years. The White Home additionally modified fingers throughout the fee’s planning course of for Part 2, and the Trump administration opposed the gathering, initiating a keep of it. A federal decide lifted the keep and allowed the gathering to happen.
At this time, the outcomes of EEOC’s Part 2 assortment have been publicly out there for months. Revealed in March, they confirmed what researchers on the time suspected: pay gaps existed within the U.S. workforce in 2017 and 2018 alongside gender, ethnic and racial strains. Furthermore, sure industries and job classes contained particularly massive disparities between staff of various demographic teams.
The industry-by-industry gender breakdown of the US workforce
Bars characterize the proportion of every {industry} that’s in every pay band, as measured in EEOC’s 2018 EEO-1 Part 2 knowledge assortment.
EEOC officers have since stated they’re able to mount one other try at pay knowledge assortment. The panorama of U.S. labor and employment regulation has shifted considerably since EEOC’s first, and arguably profitable, swing, however sources who spoke to HR Dive imagine the company’s subsequent pay knowledge assortment may look meaningfully totally different from its inaugural effort.
What Part 2 discovered
In a March 12 press launch, EEOC highlighted a number of of its Part 2 findings. The ultimate evaluation included a knowledge dashboard that enables customers to match pay by intercourse and race to broader averages throughout industries, job classes and states.
As an example, EEOC discovered the median pay band for girls in 2018 was between $30,600 and $38,900 per yr in comparison with a variety of $39,000 and $49,900 for males. The hole had closed barely since 2017; the median pay band for males was the identical between the 2 years, however the median pay band for girls in 2017 was between $24,400 and $30,600.
Equally, ladies have been in a decrease median pay band than males inside every race and ethnicity class that EEOC measured. Black or African American ladies and American Indian or Alaska Native ladies have been within the lowest median pay band of all teams.
HR Dive evaluation of the info confirmed that the highest pay bands of each {industry} measured by EEOC consisted largely of male staff.
Within the lodging and meals companies class, for instance, 57% of staff within the lowest pay band — $19,239 per yr or much less — have been ladies in 2018, whereas 43% have been males. But, within the prime seven pay bands of that {industry}, males outnumbered ladies by no less than 10 share factors. The most important hole occurred on the prime pay band — $208,000 per yr or extra — the place about 77%, or greater than 2 in 3 staff, have been males.
Ladies have been overrepresented within the lowest pay band in lots of US industries, whereas males universally outnumbered ladies within the highest pay band
% of staff within the lowest pay band, $19,239 or much less per yr, and the very best pay band, $208,000 or extra per yr, damaged down by intercourse and {industry}, in line with 2018 EEO-1 Part 2 knowledge. Gentle-colored dots characterize males and dark-colored dots characterize ladies.
Even in industries the place ladies far outnumbered males, males dominated the very best pay bands. Take healthcare and social help, for instance, the place ladies made up 78% of staff in 2018 however solely 34% of staff within the highest pay band.
Whereas most of the company’s findings will not be stunning to advocates, they do assist shine a lightweight on gaps that exist throughout just about each {industry} measured, stated Jessica Stender, coverage director and deputy authorized director on the nonprofit Equal Rights Advocates. EEOC’s report additionally could incentivize employers to take extra proactive steps to fight race- and sex-based pay disparities, she added.
“That may be an eye-opening expertise for a lot of of them,” Stender stated of employers that submitted pay knowledge to EEOC. “I feel there are numerous employers that will not be conscious of race- or sex-based pay disparities of their corporations, and there are plenty of methods through which these disparities will not be essentially intentional.”
Charlotte A. Burrows, chair of the U.S. Equal Employment Alternative Fee, speaks at a joint occasion involving the U.S. Division of Labor on Might 10, 2022. Burrows has been a part of EEOC throughout its pay knowledge assortment efforts.
A course of price attempting once more?
After performing its Part 2 assortment, EEOC commissioned the Nationwide Academies of Sciences, Engineering, and Medication to supply a examine assessing the standard and utility of the info. The Nationwide Academies’ report discovered that Part 2 knowledge have been a “probably priceless useful resource,” partially as a result of they represent the only real federal knowledge supply for pay knowledge and demographic traits collected on the employer degree.
EEOC’s knowledge differ from different federal sources of pay info, such because the U.S. Census Bureau, as a result of Part 2 gives perception into the pay on the office degree, in line with Donald Tomaskovic-Devey, professor of sociology on the College of Massachusetts Amherst and a member of the Nationwide Academies’ panel that evaluated Part 2.
Census wage figures are gathered through surveys of people and join pay to every particular person’s occupation and sector, however not the corporations for which they work, Tomaskovic-Devey informed HR Dive. Such knowledge will not be actionable for HR departments, he added, as a result of they don’t permit employers to match themselves to opponents in the identical {industry}. “When you have knowledge on people not linked to corporations, there’s no place for the HR individual to face,” Tomaskovic-Devey stated.
With EEOC knowledge, nonetheless, an HR individual can do comparisons of earnings distribution throughout race and gender inside particular occupations and firm sorts.
Tomaskovic-Devey stated EEOC may even have taken its evaluation a step additional by offering individualized stories to particular corporations outlining the place they stand on pay fairness in comparison with their prime opponents, or by figuring out and rewarding extremely egalitarian organizations or industries.
“I really assume it could be nice if HR or variety and inclusion employees at massive corporations requested extra of EEOC,” Tomaskovic-Devey stated. “In some methods, these two units of execs have duty for creating equal alternative, however usually not many instruments, and [they] have a tough time being strongly metric-driven whereas the remainder of their corporations are strongly metric-driven.”
EEOC’s findings additionally may permit employers with present pay fairness insurance policies to deal with occupational segregation, which refers back to the overrepresentation — significantly of girls and folks of coloration — in lower-paying jobs and industries, stated Stender. If a corporation discovers that these teams are extremely concentrated in lower-paying positions, it may chart a course to “guarantee higher illustration of all individuals and all genders in any respect ranges of the corporate,” Stender added.
From a floor view, the outside of U.S. Equal Employment Alternative Fee is seen on Sept. 7, 2022, in Washington, D.C. The company may make the subsequent model of its pay knowledge reporting necessities simpler for employers to finish, sources informed HR Dive.
Caroline Colvin/HR Dive
What EEOC may change
Regardless of the various arguments in help of a second Part 2 assortment, employer advocates in addition to the Nationwide Academies acknowledge that EEOC may take steps to make the gathering simpler for employers to adjust to in future iterations.
For instance, the Nationwide Academies discovered proof that Part 2’s requirement that employers combination their pay knowledge into occupational and pay-band classes set by EEOC may very well be burdensome. The shape additionally tasked respondents with grouping workers into classes primarily based on their annual wages, “however annual wages replicate totally different hourly wages for particular person workers, and it’s unclear how hours labored must be apportioned to calculate hourly pay charges,” the Nationwide Academies stated of their report.
As an alternative, gathering individual-level knowledge from employers “could also be much less burdensome,” in line with the Nationwide Academies report, significantly as a result of this type of evaluation would higher match how employers already submit payroll knowledge to state unemployment and state and federal tax methods.
“Any new knowledge assortment is tough, however [Component 2] additionally doesn’t match [employers’] payroll methods,” Tomaskovic-Devey stated. “EEOC ought to ask corporations to do what they’re already doing versus one thing new that may introduce errors into the info assortment.”
A couple of states started instituting pay knowledge assortment necessities within the years since Part 2 ended, together with Illinois, which makes use of employers’ payroll knowledge to finish its evaluation.
EEOC may implement related necessities for its future knowledge assortment, and the company additionally could permit employers to incorporate info on elements comparable to workers’ instructional attainment and tenure, which weren’t collected in Part 2.
“In the event that they go to individual-level payroll knowledge, employers ought to have the facility to incorporate no matter knowledge that they assume is vital, however they need to no less than be allowed to incorporate tenure with the agency,” Tomaskovic-Devey stated.
In EEOC’s discover asserting its intent to deliver again pay knowledge assortment, the company stated the report’s conclusions and proposals would assist inform its strategy to future knowledge collections. The fee beforehand stated it deliberate to suggest new pay knowledge assortment laws in January 2025, however an company official informed HR Dive that date will doubtless be pushed again.
A now hiring signal posted at a Panda Categorical restaurant shows beginning wage info on Aug. 5, 2022, in Marin Metropolis, Calif. Jurisdictions in additional than a dozen states have handed pay transparency legal guidelines as of October 2024, fueling a nationwide dialog about pay fairness.
Justin Sullivan / Employees through Getty Photographs
Pay transparency momentum gives help
Like Illinois, California requires sure employers to submit details about their pay and workforce demographics to the state authorities. Each states are additionally half of a bigger labor and employment pattern in favor of pay transparency, having handed legal guidelines requiring employers to reveal pay ranges in job posts. In all, jurisdictions in no less than 15 states and Washington, D.C., have handed pay transparency legal guidelines.
Different jurisdictions are more likely to observe within the years forward, in line with Robert Hinckley Jr., managing shareholder at regulation agency Buchalter, who added that the federal authorities may even take into account a regulation requiring some type of pay knowledge assortment like Part 2.
“From an employer’s perspective, there’s going to be increasingly focus positioned on pay disparities,” Hinckley stated. “I don’t assume wage transparency and wage knowledge being mined from employers goes to go away.”
The momentum round pay transparency is such that some employers have begun to voluntarily publish publicly out there pay fairness stories, Stender famous. With the rising variety of pay transparency legal guidelines, she stated it’s “as much as employers to know that the practice isn’t stopping” in the case of regulatory and public concentrate on the topic.
