Will President Barack Obama’s expansion of salary reporting requirements help in the effort to equalize gender pay requirements?

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President Barack Obama has announced additional measures to help with closing the pay wage gap between male and female employees.  The incentive behind his proposal is to shed light on salary gaps in hopes of speeding up the process of equalizing pay requirements.

The plan under the proposed rule would require companies with one hundred or more employees to provide data on “hours worked and salary ranges, broken down by gender, race and ethnicity, to the Equal Employment Opportunity Commission each year.”  Reporting such data to the Equal Employment Opportunity Commission (EEOC) would likely help with identifying and combating pay discrimination.

The plan stems from a recommendation issued in April 2014, by the President’s Equal Pay Task Force and a Presidential Memorandum.  This will cover over 63 million employees.

It is predicted that if there is nothing done to implement faster changes, women will not reach equal pay until 2059.

According to the Institute for Women’s Policy Research in 2014, females who worked full-time made only 79 cents for every dollar a man makes.  This amount is about $39,600 of a man’s median earnings of $50,400.  In recent years women are very present in the work force and are receiving more college and graduate degrees than men, yet there is still a gender wage gap of 21 percent.  The gap is even lower when comparing minorities with 60 cents for African American women and 55 cents for Latina women.

According to Washington Post, when Obama came into office, women were making 77 cents for every dollar a man makes.  The gap is decreasing, but at a very slow rate.  It is predicted that if there is nothing done to implement faster changes, women will not reach equal pay until 2059.

With the type of information that would be disclosed with the proposed rule, it would allow the EEOC to “crack down on companies paying women less than their male counterparts.”  This would bring about investigations and lawsuits.  The lawsuits, in turn, would allow the names of these particular companies bringing such disparities to be publicly exposed.

President Obama’s new proposed requirement would help ensure that pay discrimination will no longer go undetected.

President Obama wants to set up the federal government in a way in that it can actively police pay disparities through this plan from employers who have resisted other effects at reform.  In 1963 the Equal Pay Act (EPA) was signed into law by President Kennedy, which states that no employer shall discriminate between employees on the basis of sex under similar working conditions, with a few exceptions.  With the EPA signed, there were not very many implementations from employers to enforce the act.

In 2009, Congress passed the Lily Ledbetter Act, which was aimed to loosen restrictions on the statute of limitations for wage discrimination claims.  During the January 29 press conference President Obama stated that there are businesses that are doing the right things.  But his goal is to “help businesses that are trying to do the right thing to get a clear picture of how to ensure that their employees are being treated equally.”  The plan will also help with enforcing already existing equal pay laws.

Along with President Obama’s new proposal, he is also calling for Congress to pass the Paycheck Fairness Act, which focuses on “protecting women from retaliation when they seek equal pay.”  And the White House is also asking for states and employers to take action on their own to help with the promotion of equal pay.

In 2014, it was recorded that there were 26,027 sex-based charges and 21,073 race-based charges.  The questions surrounding this new proposal are whether it is a step in the right direction and will it incentivize states and employers to step up?

Lisa Maatz, president of government relations at the American Association of University Women, believes that the data collected will be helpful in passing legislation and proving that the gender gap is not a myth, from the data that will be collected.  Maatz mentions that “the wage gap is a persistent, pernicious problem, and it has been for a while.  We still have a lot to do to change it, but this is an excellent step forward.”

Jenny Yang, chairwoman of the EEOC, told Washington Post that, “Pay discrimination goes undetected because of the lack of accurate information about what people are paid.”  President Obama’s new proposed requirement would help ensure that pay discrimination will no longer go undetected.

Those in opposition of the proposed plan believe that [the plan] puts unnecessary burdens on employers while providing no meaningful insight.

Those in opposition of the proposed plan believe that it puts unnecessary burdens on employers while providing no meaningful insight.  “The information would be difficult to gather and become ‘attractive fodder for those intent to mislead.’”

Individuals for the proposed plan and for the change, believe that although the additional reporting may be “burdensome” to some, it is not unnecessary; the incentive is to help focus on fixing the pay wage gap.

The salary data requirements would consist of companies having to submit such reports annual to the EEOC.  On such forms the updated requirements include the identification of race and gender and reporting W-2 earnings for a 12-month period of their employees.

Another argument against expanding the salary reporting requirements, are that of Economists, who believe that the disparities in unequal pay stem from a “complicated blend of social force.”  According to Bureau of Labor Statistics, women tend to concentrate in low-paying jobs and take more time off work, while male-dominated fields tend to pay more and men tend to take less time off work.

Although the additional requirements requested through the new plan may seem “burdensome” to some, if done the right way, could speed up the change and give employers affected an incentive to change.

The weakness in the Economists argument is that it does not give an explanation in relation to the fields of work in which both men and woman are a part of, hold the same types of responsibilities and requirements, but yet, still receive unequal pay.  Although the additional requirements requested through the new plan may seem “burdensome” to some, if done the right way, could speed up the change and give employers affected an incentive to change.

Along with giving employers an incentive to change, the salary requirement will also help employees looking to pursue legal action against their employers for pay discrimination.  In order for an employee to prove a claim under the EPA, they need to show that “(1) a man and woman, (2) working at the same place; and (3) doing the substantially same job and receiving unequal pay.”  In response the Employer can justify the difference in pay by proving, “(1) a seniority system, (2) a merit system, (3) a system which measures quantity or quality of work; or (4) any reason other than gender.”

Those in favor of the new requirement say it will help “crank up the pressure on companies that wish to appear morally correct.”

Debbie Katz, a civil rights attorney thinks with the data, workers pursuing a discrimination case to the EEOC, would have objective numbers to back up their claim. Katz references the rule as more of a “symbolic call for wage equality.”  Katz believes that individuals bringing such claims will have a stronger argument that the company they work for is being reckless with the law based on the data recorded through the new salary requirement.  Those in favor of the new requirement say it will help “crank up the pressure on companies that wish to appear morally correct.”

The EEOC hopes to collect all the data needed under the new requirement by September 2016 and have the first published report a year later.  As President Obama mentioned during his announcement of the salary requirement, social change is not something that happens overnight and that you have to be steady and persistent to achieve your end goal.

There are some employers who may not be all for expanding the salary reporting requirements, but if such requirement can shed light to the already existing issue of pay discrimination, such requirement should be implemented.  There are stereotypes about males and females in the workplace, and such stereotypes are readily apparent when looking at the hiring or promotion decisions of employers.  There needs to be more enforcement of the rules and polices already in place to breakdown these stereotypes.

President Barack Obama’s proposal to expand salary-reporting requirements is very much another step in the right direction.  “The notion that we would somehow be keeping my daughters … any of your daughters out of opportunity, not allowing them to thrive in any field, not allowing them to fully participate in every human endeavor, that’s counterproductive.” –President Barack Obama.