A federal judge on Monday ordered the Trump administration to reinstate an Obama-era rule that required companies to report pay data by race and gender, a move advocates say will help shrink the wage gap.
Tanya S. Chutkan, a U.S. district judge for the District of Columbia, ruled that the Trump administration violated the law when it halted the Equal Employment Opportunity Commission’s efforts to collect pay data by race and gender from large companies. In defending its decision to freeze the rule, Chutkan wrote, the government failed to demonstrate that the requirements would “meaningfully increase the burden on employers.”
Chutkan ordered the government to move forward with collecting the data, a decision that women’s rights groups hailed as a crucial step toward fighting employer discrimination of women and minorities.***
The rule, which was finalized in September 2016, required firms with 100 or more employees to provide additional employee and salary information to the EEOC on an existing form, known as the EEO-1. Companies would have been required to submit their reports by March 31, 2018.***
The rule also created an incentive for an employer to “look under the hood” and evaluate their own pay practices, Yang said. The EEOC planned to then publish the aggregate data publicly, allowing employers, advocates and academics to benchmark pay inequities in the workforce, said Yang, who is now a strategic partner at Working Ideal and a fellow at the Urban Institute.
But the data collection requirement was met with intense criticism from the U.S. Chamber of Commerce and other industry groups that argued it put an unfair and expensive burden on employers. While the EEOC estimated the data collection would cost $25 million a year, or about $416 per company, the Chamber of Commerce claimed it would carry a total burden of $1.3 billion per year for all businesses with 100 or more employees, with “no accompanying benefit."
Then, in August 2017, Neomi Rao, then the administrator of the Office of Information and Regulatory Affairs, sent a memorandum to Victoria Lipnic, the Acting Chairwoman of the EEOC, stating that the Office of Management of Budget had decided to freeze the EEOC’s new collection of pay data.
Rao, who is now President Trump’s nominee to replace Supreme Court Justice Brett M. Kavanaugh on the U.S. Court of Appeals for the District of Columbia Circuit, wrote in the memo that “aspects of the revised collection of information lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.”