Bookmark and Share
 

Legal Updates

Federal Enforcement Agencies Set Their Sights On Equal Pay

Several federal enforcement agencies have recently announced that they will be taking dramatic new action to eliminate or reduce pay discrepancies between men and women.

The Obama Administration has created the National Equal Pay Enforcement Task Force (the “Task Force”), composed of officials from the Equal Employment Opportunity Commission (“EEOC”), the Department of Labor (“DOL”), the Department of Justice (“DOJ”) and the Office of Personnel Management (“OPM”), to crack down on violations of federal equal-pay laws.

Recently, the Task Force convened and announced an agenda for carrying out its mission.  Specifically, the Task Force has identified certain “persistent challenges” to equal-pay enforcement and announced an action plan for overcoming them.  The action plan calls for (1) improving coordination among EEOC, DOL and DOJ; (2) increasing data collection from private-sector employers; (3) launching a public-education campaign; (4) improving the federal government’s role as a model employer; and (5) supporting passage of the Paycheck Fairness Act by the Senate.  Some of the key features of this action plan are summarized below.

1.   Interagency Coordination

The Task Force has established a “standing working group” to coordinate the efforts of EEOC, DOL and DOJ in enforcing laws concerning equal pay and pay discrimination.  These agencies will promote consistency in their policy and litigation positions so as to “improve investigation and enforcement abilities.”

Their collaboration will involve cross-training staff members of EEOC and DOL’s Wage and Hour Division “on how to identify compensation discrimination in the course of their investigations” in order to “increase referrals between the agencies.”  Similarly, EEOC, which enforces Title VII of the Civil Rights Act of 1964 (“Title VII”) in the private sector, and DOJ, which enforces Title VII in the public sector, have begun an “intensive pilot program” to coordinate the investigation and litigation of pay-discrimination charges against state and local government employers.

Federal contractors are also on the Task Force’s radar screen.  EEOC and DOL’s Office of Federal Contract Compliance Programs (“OFCCP”), which administers and enforces federal laws regarding the non-discrimination and affirmative-action obligations of federal contractors, will establish a pilot program requiring certain field offices “to work together to identify sectors where increased enforcement activity is necessary.”

As a prelude to stepped-up enforcement efforts, OFCCP has announced that it will rescind existing standards concerning the non-discrimination obligations of federal contractors and establish new ones with “appropriate input from the EEOC and DOJ”; rescind a directive prohibiting the on-site audit of a federal contractor unless a desk audit first identifies at least ten victims of discrimination; and hire more than 200 employees, most of whom will be Compliance Officers, “the front line employees responsible for detecting discriminatory practices.”  Additional, OFCCP has removed its cap on the number of federal contractors that may be subject to a full audit review at any one time.

2.   Data Collection From Private-Sector Employers

EEOC will commission an outside study “to determine what data it should collect to most effectively enhance its wage discrimination law enforcement efforts.”  Similarly, OFCCP is exploring whether to implement a survey to collect gender-identified wage data.  According to OFCCP, “implementation of a survey is expected to result in better identification of those contractors who are likely to be out of compliance, particularly with regard to compensation discrimination; a narrowing of the issues on which the resulting review will focus; and identification of contractors for corporation-wide and industry-focused reviews.”  (Private-sector employers presently are not required to systematically report gender-identified wage data to the federal government.  This, says the Task Force, “makes identifying wage discrimination difficult and undercuts enforcement efforts.”)

3.   Public-Education Campaign

In response to its belief that both employees and employers are “insufficiently educated on their rights and obligations with respect to wage discrimination,” the Task Force is developing a public-education campaign concerning the right to equal pay.  As part of this campaign, each EEOC District Office will host a Fair Pay Day “designed to focus the attention of the public and the media on fair pay issues.”  As a follow-up to their respective Fair Pay Days, EEOC offices “will conduct joint outreach with other local federal agencies and local Industry Liaison Groups on wage discrimination issues.”

4.   Federal Government As Model Employer

The Task Force intends to use a 2009 study by the Government Accountability Office (“GAO”)—which revealed an eleven-cent gap between men’s and women’s pay in the federal workforce—to improve its role as a model employer and to provide additional training to enforcement agencies.  Specifically, EEOC and OPM are to collaborate with GAO “to identify the reasons for this wage gap and ways to close it.”  EEOC then will use the information gained from this collaboration “to provide agencies with better guidance in analyzing wage gap issues.”

5.   Support For Paycheck Fairness Act

The Task Force will support efforts to achieve passage by the Senate of the Paycheck Fairness Act (the “PFA”).  (The House of Representatives passed the PFA as part of the larger Lilly Ledbetter Fair Pay Act, but the Senate required removal of the PFA provisions before agreeing to send the Ledbetter law to the President for his signature.)  The PFA would amend the Equal Pay Law of 1963 (the “EPA”) by exposing businesses to unlimited compensatory and punitive damages; facilitating EPA class actions; making it more difficult for employers to establish an affirmative defense when pay discrepancies are found; and creating a cause of action for employees alleging retaliation for disclosing their wages.           

Recommendations For Employers

In light of the federal government’s sharpened focus on equal-pay enforcement, as well as the potential passage of the PFA, employers are encouraged to carefully audit their payroll and related employment practices, in collaboration with outside counsel, to identify any actual or perceived gender-based pay disparities.  The audit should cover not only compensation but also related functions, such as performance appraisal processes, promotion policies and incentive programs.  Working with counsel will help ensure a comprehensive review and protect the audit to the greatest extent possible under the attorney-client privilege.

If you have any questions about the Equal Pay Act, claims of pay discrimination under Title VII, the proposed Paycheck Fairness Act, or applicable federal-contractor obligations, or if you need assistance conducting an audit of your company’s pay practices, please do not hesitate to contact us.