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EEOC's data collection proposal could spike litigation against employers


A U.S. Equal Employment Opportunity Commission proposal that it start collecting pay data from employers with more than 100 workers will lead to more litigation and administrative proceedings filed against businesses by the agency and the plaintiffs bar, experts say.

“The EEOC is now going to systemically create data that they can use against employers, in both picking employers they want to go after” and compare with that of other businesses when they do go after particular firms, said Shannon Farmer, a partner with law firm Ballard Spahr L.L.P. in Philadelphia.

Having this data in the federal government's hands also creates cyber security concerns, experts say.

The EEOC said Friday that it has proposed to start collecting pay data from employers, including federal contractors, with more than 100 workers to identify possible pay discrimination.

The agency said in its statement that it plans to ask for this information as a revision to its Employer Information Report. The revised EEO-1 was announced in conjunction with the White House's commemoration of the seventh anniversary of the Lilly Ledbetter Act.

That measure, which President Barack Obama signed into law with great fanfare Jan. 27, 2009, as one of his first acts in office, says every paycheck resulting from a previous discriminatory pay decision constitutes a violation of Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990 and the Rehabilitation Act of 1973.

EEO-1 data provides the federal government with workforce profiles from private-sector employers by race, ethnicity, sex and job category, according to the EEOC.

The revision would add aggregate data on pay ranges and hours worked to that information, beginning with the September 2017 report. The proposed changes were published in the Federal Register on Monday, and members of the public will have until April 1 to submit comments.

The EEOC said the new pay data would give it and the U.S. Department of Labor's Office of Federal Contract Compliance Programs insight into pay disparities, and the agencies will use this data to assess complaints of discrimination, focus agency investigations and identify pay disparities that warrant further examination.

Although 57% of women work outside the home, the typical woman employed full time makes 21% less than the typical man, Department of Labor Secretary Tom Perez, EEOC Chair Jenny R. Yang and Valerie Jarrett, a senior adviser to President Obama, said in a joint statement issued Friday.

The typical black non-Hispanic woman makes only 60% of a typical white non-Hispanic man's earnings, while the typical Hispanic woman is paid only 55%, according to the statement.

“It's going to help potential plaintiffs” while not necessarily being beneficial to employers, said Stanley H. Pitts, a partner with Honigman Miller Schwartz & Cohn L.L.P. in Detroit. It will also lead to more agency administrative charges and investigation issues, he said.

Mr. Pitts said he believes the EEOC is particularly interested in higher-paying categories and is “trying to look at the 'glass ceilings' for gender or pay discrimination.”

Denise M. Visconti, office managing shareholder with Littler Mendelson P.C. in San Diego, said the EEOC is proposing to collect W-2 data, but “as the studies suggest, a lot of disparities are in the form of benefit-type of compensation, so I'm not sure the information they're proposing to collect will have the value they think it's going to have.”

Sarah J. Moore, a partner with Fisher & Phillips L.L.P. in Cleveland, said, “By having the data available, the EEOC has an ability to better identify those employers who are noncompliant” with federal law, “and so there will be a greater incentive for companies to make sure that they're reviewing their systems, so that there hasn't been any inadvertent pay disparities that haven't been addressed,” she said. “It's forcing the issue.”

The issue also raises cyber security concerns, say experts who point to the U.S. Office of Personnel Management's massive cyber data breach last year. “The government is sometimes at risk for having challenges in maintaining the protection of that data,” said Ms. Visconti.