EEOC Pay Data Dashboard Paves the Way for Unadjusted Pay Gaps

The EEOC may not have shocked the world with the headline of its new pay report (“Men Are More Likely to be in Higher Pay Bands Than Women”) but the interactive pay database is a major first step on the road to Component 2 pay data collection – and eventually, public disclosure of unadjusted pay gaps.

Why it matters. The publication of this data is a precursor to the EEOC reinstating the EEO-1 Component 2 requirement (begun in 2017, reversed in 2019, and clearly now contemplated for return). More importantly, it is a step toward the U.S. joining the U.K., Australia and other countries in the push for unadjusted median pay gap transparency.

Go deeper: The database reports aggregated pay data for 2017-18 (the only years it was collected) broken down by industry, state and occupation as well as gender, race and ethnicity. If the EEOC decides to restart collection of this data, the impact could be significant.

• Enforcement tool. The EEOC is likely to use the information to drill down into systemic pay inequities and identify new targets for its anti-discrimination enforcement program.
  
  
• Investor pressures. Given the tremendous success investors enjoyed in campaigns to pressure companies to publish EEO-1 workforce composition reports, we may see mounting pressure for companies to disclose Component 2 data as well. Investors will make the argument that the analysis already exists and does not require additional work from the company. This could become problematic for companies who disclose a zero pay gap on an adjusted basis but are then asked to reconcile the data and respond to investor conclusions.

Assess your own risks. The agency has indicated the dashboard will serve as a useful tool for companies to assess how their data compares to peers and proactively address pay disparities. Companies should complete their own pay equity analyses and according to Seyfarth Shaw, should review the database to determine how their results stack up against industry peers and within states to understand if they are at increased risk to face an EEOC investigation.