Pay Equity Enforcement

A recent Bloomberg Law interview with former commissioner and acting chair of the Equal Employment Opportunity Commission (EEOC), Victoria A. Lipnic, sheds light on the future of pay equity enforcement in the U.S. 

While Lipnic advises employers to stay tuned for details of EEOC’s new strategic enforcement plan for 2022, she confirms the agency’s efforts specifically around pay data collection will inevitably ramp up.

In fact, pay data reporting for all employers is on the horizon, according to Lipnic: “Whether it is a revised EEO-1 Component 2 report, or some other type of regulatory requirement […], I believe employers will be required to submit pay data to the federal government in the future. I do not see a scenario where that will not happen […].”

Given new leadership, as well as pay equity being a prominent focus of the Biden administration, it’s likely that the EEOC will collaborate with the Office of Federal Contract Compliance Programs (OFCCP) to drive equal pay measures.

Earlier this year, OFCCP pledged to use EEO-1 Component 2 pay data information to enforce pay equity. The combination of OFCCP’s auditing capability and EEOC’s directed investigation authority suggests employers’ pay practices will be under increased scrutiny.

Lipnic also notes the Americans with Disabilities Act (ADA) is another enforcement priority under the Biden administration. An executive order passed last summer promoting diversity, equity, inclusion, and accessibility (DEIA) signals the rise of accessibility as a keyword in the DEI conversation. “As a result, I wouldn’t be surprised to see many employers convert their ‘Diversity, Equity and Inclusion’ initiatives into ‘Diversity, Equity, Inclusion and Accessibility’ initiatives,” Lipnic says.

The DEIA executive order is just one of several President Biden has issued to advance diversity and equity in the federal workforce since taking office. 

Local initiatives are spreading as well, with California; and Illinois recently passing laws that mandate pay data reporting. In California, things are especially picking up momentum: The state has started issuing pay data reporting non-compliance letters to employers. It is only a matter of time before all employers will be required to submit pay data in some way, shape, or form.

Organizations should not wait for mandates to take action. Conducting a pay equity audit to identify and resolve wage gaps is a smart, proactive move. Employers should look at the EEO-1 Component 2 information submitted and compare that to their own internal analysis, because the groups may not be the same. Lipnic advises this is an important step employers can take to show due diligence when the EEOC “shows up looking for more information.”

Trusaic’s comprehensive PayParity solution analyzes employee compensation at the intersections of gender, race/ethnicity, age, disability, and more. Our DEI consulting and ongoing monitoring tools will help your organization get ahead of pay data reporting requirements to ensure fair compensation across your workforce and address any issues proactively. PayParity helps you achieve pay equity and prevent pay discrimination from ever happening. 

To learn more about conducting a proactive pay equity audit, download the white paper Designing a Successful Pay Equity Policy for your Organization below.

Designing a Successful Pay Equity Policy