The Equal Employment Opportunity Commission (EEOC) recently announced the results of a study by the National Academies of Sciences, Engineering, and Medicine (National Academies) based on the EEOC’s pay data collection, which was completed in 2020. The official EEOC press release can be found here. According to the EEOC, the study concluded that data collected by the EEOC is a “useful tool in preventing and combatting pay discrimination in American workplaces.”

The pay data collection was a controversial program that started in 2016 and was temporarily halted due to the burden on employers. Halting the data collection generated litigation, which led to a court order that the data collection resume. Ultimately, the data collection from private employers concluded in 2020.

The EEOC claims the National Academies’ study demonstrates:

• Collection of pay data is a necessary function of the EEOC to assess compensation differences based upon sex, race and ethnicity.
• The 2020 data collection is unique and no other federal program has accumulated the same type of information.
• About 90% of employers responded, which represents approximately 70,000 employers and 100 million employees.
• The data collected enables the EEOC to pursue litigation against employers using “a more data driven approach” that will allow the EEOC to identify patterns and practices of pay discrimination and compare it against “national, regional, and industry-based pay gaps.”
• The EEOC should expand future data collections.

The EEOC called the study “a scientifically sound body of work,” which suggests the EEOC intends to use the study to restart its data collection effort and/or justify the implementation of a new collection process. However, it is important to note that the EEOC funded the National Academies’ study, which arguably impacts the National Academies’ conclusions.

The EEOC highlights certain portions of the study, including a finding of pay gaps in excess of 50% in the technology sector of Silicon Valley. It is possible that the EEOC may also use the study to target various sectors of employment for large-scale litigation or as a guide to assess the potential strength of class claims.

Employers should consider auditing their pay practices now to reduce the risk of finding themselves a target of an EEOC pay equity investigation. It is also wise to include counsel in that process, which might enable employers to protect the audit from disclosure under the attorney-client privilege.

Regardless of whether the EEOC initiates any new data collection efforts, it has already announced that pay inequity is a point of emphasis for its litigation efforts. Ultimately, it is the burden of the employer to comply with anti-discrimination laws.

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