White House wants companies to submit pay data to close gender gap

WASHINGTON — The White House wants private companies to submit salary data to the federal government in an effort to further reduce the pay gap between men and women.

The proposal comes Friday on the seventh anniversary of the Lilly Ledbetter Fair Pay Act, which was the first bill President Obama signed into law in 2009 making it easier for women to bring lawsuits for pay discrimination. Obama will also announce that the White House will host a “United State of Women” Summit May 23.

In announcing the new actions, White House officials conceded that progress has been slow since Obama signed the fair pay law on his ninth day as president. When that bill was passed, women were paid an average of 77 cents for every dollar a man earns. Now, it's 79 cents.

"Bridging the stubborn pay gap between men and women in the workforce has proven to be very challenging,"  said Valerie Jarrett, a senior Obama adviser. "This is an issue that’s personal for President Obama. As he has said over and over again, there’s no reason why his daughters should be paid any less than anyone’s sons for doing the same job."

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The new White House proposal goes beyond the presidential memorandum on pay data Obama signed in 2014, which applied only to federal contractors. Instead, under a new rule proposed by the Equal Employment Opportunity Commission, all companies with more than 100 employees would be required to submit summary pay data each year.

Since 1966, large companies have reported to the EEOC the number of their employees by sex, race, ethnicity and job group. The new proposal would add to that list pay data in 12 salary ranges, although individual employee's salaries would be grouped together to protect privacy.

The EEOC data collection plan is still in the proposal stage, and needs to go through a number of administrative hurdles. By law, the commission has to seek public input on the regulation, which will continue through April 1. The EEOC hopes to finalize the rule by September 2016, with the first reports due in September 2017.

Because of the amount of information requested, the proposal also requires a separate review under the Paperwork Reduction Act. The EEOC estimates that most employers can comply with the data collection for less than $400 in the first year and $200 each year after that.

The commission hopes the data will help it focus its enforcement efforts, said EEOC chairwoman Jenny Yang.

"Often people may come in but not have information about what other people are paid in their workplace," she said. "This helps us as one factor to consider in conducting our investigation."

But she also conceded that the pay data alone won't tell the whole story, because it won't account for differences among employees in education, experience and tenure. Conservative economists have argued that those differences, not gender alone, explain most of the pay gap.

But a report by the White House Council of Economic Advisers, also released Friday, argues that's no longer the case as women have earned the majority of college degrees. "Because women have increasingly become our most educated workers, accounting for relative education levels actually widens the pay gap," the report says.

Regardless, the White House hopes that just compiling the data will cause many companies to take a second look at their compensation policies.

"So what we're hopeful is that businesses will take this on as a goal and achieve the very thing that we're trying to arrive at before enforcement ever becomes an issue," said Cecilia Munoz, the White House domestic policy adviser.