The Equal Employment Opportunity Commission (EEOC) has taken another step toward achieving its goal of equal pay and eliminating discrimination.
EEOC objectives for fiscal years 2024 through 2028 are highlighted in its Strategic Enforcement Plan (SEP), released on September 21. And its message is uncompromising.
The Commission’s clear focus is on combatting employment discrimination, promoting inclusive workplaces, and responding to racial and economic justice. To achieve this, it names six targeted subject matter priorities:
Eliminating barriers in recruitment and hiring.
Protecting vulnerable workers from underserved communities from discrimination.
Addressing selected emerging and developing issues.
Advancing equal pay for all workers.
Preserving access to the legal system.
Preventing and remedying systemic harassment.
Below, we highlight two of those priorities which affect equal pay and the use of pay equity software:
Advancing equal pay: EEOC focus will prioritize employer practices that may “impede equal pay or contribute to pay disparities.” Reliance on salary history and discouraging or prohibiting employees from asking about pay are named in those practices.
Addressing selected emerging and developing issues: Specific emphasis is placed on employment practices and decisions where the use of technology results in or contributes to discrimination, including software that:
“…. incorporates algorithmic decision-making or machine learning, including artificial intelligence; use of automated recruitment, selection, or production and performance management tools; or other existing or emerging technological tools used in employment decisions.”
EEOC guidance released in May 2023 already aims to prevent discrimination caused by AI to job applicants and employees. Title VII guidance makes it clear that employers cannot delegate responsibility for AI bias to their software vendor. Nor can they rely on their vendor’s assurance that its software is Title VII compliant.
If your pay equity software violates workplace laws, as an employer, you may be held liable.
EEOC pushes for equal pay and workplace justice
Publication of EEOC priorities comes just weeks afterannouncing its alliance with the Department of Labor Wage and Hour Division. Aimed at enforcing “workplace justice issues” the alliance involves greater collaboration on employment-related matters and regulatory enforcement.
Employment discrimination based on race, color, religion, sex, national origin, age, disability, or genetic information.
Unlawful compensation practices, such as violations of minimum wage, overtime pay or wage discrimination laws.
The message is loud and clear; the EEOC means business, and it is not alone.
Introducing New York wage theft laws
Equal pay is also a targeted priority for New York.
In an unprecedented step, New York Governor Kathy Hochul signed legislation which amends the state’s Penal Law and makes wage theft a form of grand larceny. Under state laws grand larceny is defined as any theft valued at $1,000 or more. The degrees of grand larceny relate to the value of property taken. Penalties increase from fourth degree larceny to first degree.
New York Penal Law’s larceny statute describes wage theft as when a person is hired:
“…to perform services and the person performs such services and the person [employer] does not pay wages, at the minimum wage rate and overtime . . . to said person for work performed.”
In a prosecution:
“…it is permissible to aggregate all nonpayments or underpayments ….into one larceny count, even if the nonpayments or underpayments occurred in multiple counties.”
Employers who engage in wage theft will now be subject to criminal prosecution.
The legislation came into immediate effect on September 6, 2023.
The high cost of wage theft
In justification, the New York Senate notes that wage theft accounts for almost $1 billion in lost wages every year. That’s according to Cornell University’s Worker Institute. Wage theft in New York is pervasive across the state’s construction industry, which is expected to be a focal point for the New Act.
Wage theft is also a significant problem across the US. The Economic Policy Institute reports over $3 billion was recovered for workers between 2017 to 2020. That’s just the tip of the wage theft iceberg that it estimated at $50 billion annually back in 2014.
New York wage theft laws are its latest attempt to crack down on wage and hour law violations. Further, they come just over six months after Manhattan’s District Attorney, Alvin Bragg, Jr., announced the creation of a “Worker Protection Unit” to investigate and prosecute wage theft and other forms of worker exploitation and harassment.
Earlier this year, New York City’s “NYC Bias Audit Law, ” also known as Local Law 144 also came into force. It requires employers to carry out “bias audits” of all automated employment decision tools (AEDTs) used in the hiring process and internal promotions.
EEOC increases pressure on employers to ensure equal pay
It is highly likely that the EEOC will support its goal of equal pay by reinstating EEOC-1 Component 2, especially as pay equity is prioritized in its Equity Action Plan. Like the SEP, it aims to tackle systemic discrimination, advance equity, and better serve members of underserved communities.
The EEOC’s message – and that of New York state – is clear.
It’s time for employers to review their pay practices.
Ensure compliance with EEOC priorities on equal pay
The EEOC states “pay inequity is not solely an issue of sex discrimination, but an intersectional issue that cuts across race, color, national origin, and other protected classes.”
Intersectionality is key to achieving pay equity. It recognizes that individuals can experience discrimination based on the intersection of multiple identities. Our state-of-the-art pay equity software, PayParity, helps to solve HR’s most complex challenges around people, data, and compliance. It analyzes compensation through the intersection of gender, race/ethnicity, disability, age and more in a single statistical regression analysis.
Find out more. Speak to one of our pay equity experts.
Conducting a pay equity audit is a key component to ensuring equitable compensation within your organization. Just as important as the analysis is how you communicate findings and progress with various stakeholders. Download The Pay Equity Communications Planner to learn best practices for discussing compensation, both internally and externally.