Feds Take Aim at Pay Equity

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In what advocates for working women are calling “the most significant gain for women and minorities” since they started fighting for equal pay, the federal government, beginning today, will require all federal contractors to submit their pay data to Washington, broken down by gender and race. It is the government’s latest effort to narrow the wage gap, which remains stubbornly wide.

The Office of Federal Contract Compliance, the agency charged with seeing that companies with federal contracts abide by equal employment opportunity laws, is mailing its new Equal Opportunity Survey to 7,000 companies that have been flagged by the agency as potential violators of the law.

Another 53,000 contractors will get the survey by the end of the year. Next year, the rest of the approximately 100,000 federal contractors and subcontractors will be asked to fill out the survey as well.

More than 30 years after the Equal Pay Act was passed, women still bring home only 73 cents for every dollar men do. Minority women fare even worse: African-American women make only 62 cents and Hispanic women are paid just 54 cents for every dollar paid to a white males, according to Labor Department data.

Equal pay advocates have been fighting since Jimmy Carter was president to require companies to report their wage data annually. Business has opposed the effort all along.

“The only thing they’re complaining about is the compensation data. One would believe that’s because that’s where they’re going to be vulnerable,” said Nancy Kreiter, research director for Women Employed, a Chicago-based advocacy group that has been pushing for annual reporting of pay data for 20 years.

The survey seeks general information on the firms’ affirmative action program as well as detailed information on compensation and tenure of full-time employees and “personnel activity,” including hiring, firing and promotions. The result will be a wealth of information about the status of women and minorities—what kinds of jobs they do, how long they’ve been doing them and how much they are paid.

The idea is to provide a database of pay, hiring and promotion information from which to discern which companies deserve a closer look.

The feds say the surveys will do a couple of things: allow them to make smarter choices about which companies to hit with compliance reviews, target their limited resources by doing focused reviews–for pay discrimination or glass ceiling issues, for example–and encourage companies to self-audit since they have will have to report the data anyway.

The U.S. Chamber of Commerce, which opposed the new survey, believes the data it gathers will be meaningless.

“Are we against the concept of trying to identify those people more likely to have violated the law? Absolutely not,” said Mike Bartlett, manager of labor law policy for the Washington-based U.S. Chamber of Commerce.

“But what is their methodology for analyzing all this data once they gather it? How are they going to organize it in such a way that it will separate the good guys from the bad guys?”

Bartlett said he doesn’t believe that information can be derived from the survey because it asks for data under very broad job categories known as EEO 1 categories. In one case–that of officials and managers–the highest paid executives are lumped in with first-line supervisors, he said.

“The basic comparison is highest monetary compensation to lowest. So you get $3.5 million vs. $36,000. So what? What does that tell you?” Bartlett asked.

Kreiter said that the data would show pay averages by gender and race, giving officials “enough information to say ‘this is worth looking at further.'”

Previously, the agency gathered pay data only through its “compliance reviews,” audits of about 4,000 companies a year, triggered by complaints or through random sampling. This new system will allow them to look at the data and target reviews to the companies most likely to be skirting the laws.

Bartlett said the Chamber is considering suing to stop the survey because the new requirement was never submitted for public comment.

The firms to be surveyed do more than $50,000 worth of business with the federal government and have 50 or more employees. The agency estimates a company will have to spend about 12 hours completing the mandatory survey, which is due back at the agency within 30 days.

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