Big Surprise? Not Really – Pay Equity Now a Top Priority for EEOC

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After reviewing the EEOC’s newly-approved Strategic Enforcement Plan, there are no surprises for employers when it comes to identifying where to concentrate their EEO compliance efforts for the next four years.

But one of the areas the EEOC intends to focus on did come as a surprise: enforcement of equal pay laws.

Why was it a surprise? Enforcement of equal pay laws was added to the strategic plan at the last minute.

As noted by Barry Hartstein, an attorney in the Chicago office of law firm Littler Mendelson, the inclusion of enforcing equal pay laws to target practices that discriminate based on gender did not appear among the priorities listed in the EEOC’s draft plan. But it’s No. 2 in the finalized and approved plan.

Increase in Equal Pay Act lawsuits expected

Was it a big surprise? Not really. After all, gender pay equity has been a flagship issue of the Obama Administration since 2008. From the Lilly Ledbetter Fair Pay Act to the creation of the National Equal Pay Enforcement Task Force to the Paycheck Fairness Act, many of us saw it coming and figured it was only a matter of time.

eeoc3It isn’t clear when the EEOC will begin its enforcement efforts in earnest. Surprisingly, the agency has filed only two Equal Pay Act lawsuits in the last two fiscal years. It’s likely we will see that number increase over the next four years as a result of pay equity being specifically prioritized in the Strategic Enforcement Plan.

What surprises does the EEOC have in store for employers? Surprise visits and showing up at your door without a complaining party. Under the agency’s new Equal Pay Act Directed Investigation Pilot Program, the EEOC is no longer waiting for a formal complaint of discrimination before launching pay investigations.

Right now, three district offices are participating in the program. It’s likely that the program will be expanded nationwide – the Strategic Enforcement Plan specifically encourages these directed investigations. As a result, more employers could find themselves discussing their pay practices with the EEOC over a cup of coffee.

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How to prevent EEOC pay “surprises”

Want to prevent surprises? Start examining at your compensation policies and practices using quantitative tools. It’s important to know what story your data tells, and whether there are potential problem areas with respect to internal equity. You don’t want any surprises if/when the EEOC starts reviewing your compensation data.

It’s important to not only look for the possibility of disparate treatment (intentional discrimination) but also disparate impact (unintentional discrimination). There are indications that disparate impact lawsuits may be on the rise. It remains to be seen whether compensation practices will be challenged, but it is a possibility.

No surprises – you’ve been warned!

This was originally published at the Compensation Café blog, where you can find a daily dose of caffeinated conversation on everything compensation.

Stephanie Thomas, Ph.D., is a lecturer in the Department of Economics at Cornell University. She teaches undergraduate and graduate courses on economic theory and labor economics in the College of Arts and Sciences and in Cornell’s School of Industrial and Labor Relations. Throughout her career, Stephanie has completed research on a variety of topics including wage determination, pay gaps and inequality, and performance-based compensation systems. She frequently provides expert commentary in media outlets such as The New York Times, CBC, and NPR, and has published papers in a variety of journals.

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