Executive Action Will Require Companies to Disclose Gender Pay Data

Seven years after signing the Lilly Ledbetter Fair Pay Act into law, President Barack Obama on Friday took additional executive action intended to close the gender pay gap.

His newly proposed rule will require companies with more than 100 employees to report salary data based on race, ethnicity, and gender on EEO-1 forms they submit to the Equal Employment Opportunity Commission (EEOC). The Obama administration says this rule will apply to more than 63 million workers, and the first report is expected in the fall of 2017.

In announcing the proposal, Obama pointed out that the gender pay gap disproportionately affects African American and Latina women the most.

“Social change never happens overnight,” he said. “It is a slog, and there are times when you just have to chip away and chip away.”

According to the White House, the median wage for a woman who works full time and year round is $39,600, while a man working the same job earns $50,400. That means women still earn just 79 percent of a man’s median wages for the same work.

The Lilly Ledbetter Fair Pay Act was the first law Obama signed and is named for the woman who sued her employer after discovering she had been receiving thousands of dollars less than her male peers for the same work. The case went before the U.S. Supreme Court, where it was overturned because Ledbetter had not reported the discrimination at the time that it started. However, she did not discover the pay disparity until two decades into her career at Goodyear.

This led to the passage of the Fair Pay Act, which amended the part of the Civil Rights Act of 1964 that requires employees to report discrimination within 180 days of the first discriminatory paycheck.

In addition to this latest executive action, Obama is calling on Congress to pass the Paycheck Fairness Act, which would protect women from retaliation by employers for seeking equal pay. The bill has failed in Congress three times since 2013.

The White House hopes requiring companies to submit disaggregated salary data will “provide better insight” into the gender pay disparity and make it easier to enforce equal pay laws.