Economy

Obama Just Made It Easier To Uncover Cases Of Pay Discrimination

CREDIT: AP Photo/Pablo Martinez Monsivais

President Obama signing the Lilly Ledbetter Fair Pay Act into law on January 29, 2009

Friday marks seven years since President Obama signed the Lilly Ledbetter Fair Pay Act into law, the first bill he signed, aimed at helping women combat the gender wage gap by giving them more time to bring lawsuits.

But in that time, the gender wage gap — which means that American women working full-time, year round make 79 percent of what men make, a gap that’s much larger for women of color — has only narrowed by two cents, not a statistically significant change. So to mark the anniversary, Obama will announce executive action on Friday to institute a new requirement that companies with 100 or more employees report what workers are paid broken down by gender, race, and ethnicity to the Equal Employment Opportunity Commission (EEOC).

The information will be included on a form companies already submit every year about employee demographic information. The EEOC can then use the data to identify businesses that might have discriminatory pay gaps. The new proposal expands an executive order Obama issued two years ago, requiring federal contractors to submit pay information broken down by gender.

The EEOC and Department of Labor will jointly publish the proposed regulation, which will be completed in September. The first employer reports would then be due a year later.

Lack of transparency is one of the main hurdles that women and people of color face when trying to uncover potential pay discrimination. Even though workers have a legal right to discuss pay with each other, about half of all Americans working in the private sector say their employers discourage or outright ban such talk. That can make it difficult for anyone to uncover discriminatory wage scales. And in areas that tend to have more open information about their pay, such as unionized workplaces and the public sector, the gender wage gap is far smaller.

Employers may not even be aware they have wage disparities until they themselves run the numbers. Marc Benioff, the CEO of Salesforce, recently launched a program throughout his company to examine all of their salaries and eliminate unfair gaps. He told the New York Times that he found that he was paying women less than men, even though he “never intended” to do so. In the 1970s and 1980s, many state governments undertook annual reviews of their pay scales and increased the pay for women who were unfairly given less, a process that eliminated 20 percent of the wage gap.

On Friday, Obama will also call on Congress to pass the Paycheck Fairness Act, which would ban employers from discouraging or blocking workers from talking about pay and increase the rules and penalties surrounding unfair pay disparities. While it’s been introduced a number of times, Republicans have repeatedly stood in lockstep to block it.