The Trump administration has halted a rule that would have required large companies to report to the government what they pay employees by race and gender — an Obama-era policy that aimed to close what economists call the wage gap.
The decision landed Tuesday evening, prompting outrage from groups who note that women and minorities still aren’t receiving equal pay for equal work. Some of the furor was directed at Ivanka Trump, who has previously spoken out against wage disparities and workplace discrimination.
Fatima Goss Graves, president and chief executive of the National Women’s Law Center, said the move contradicts President Trump’s claim that he wants prosperity for every American.
“It’s not enough to say 'equal pay,' " Grave said. “It matters what policies you stand behind.”
In a letter sent Tuesday to Victoria Lipnic, acting chair of the Equal Employment Opportunity Commission, Neomi Rao, administrator of the Office of Information and Regulatory Affairs, said the Office of Management and Budget had paused the government’s pay data collection process to review it.
“OMB is concerned that some aspects of the revised collection of information lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues,” Rao wrote, according to documents obtained by The Washington Post.
Ivanka Trump released a statement hours later.
“Ultimately, while I believe the intention was good and agree that pay transparency is important, the proposed policy would not yield the intended results,” the president's daughter said. “We look forward to continuing to work with EEOC, OMB, Congress and all relevant stakeholders on robust policies aimed at eliminating the gender wage gap.”
A source close to Ivanka Trump, who works as an unpaid adviser to her father, said she initially wanted to support the measure. Then she consulted experts and worried that it wouldn’t work as intended.
Graves said that Ivanka Trump’s platform to fight discrimination at work now seems flimsy.
“We have seen her say the words ‘equal pay’ and that she supports equal pay,” Graves said, “but halting an equal pay policy, which would have brought transparency and improved enforcement and made employers more accountable — that shows her rhetoric doesn't match reality.”
The Obama-era rule, which did not require congressional approval, would have given the EEOC more reach in its efforts to investigate firms with glaring pay disparities.
Starting next year, companies with more than 100 employees and federal contractors with at least 50 would have had to report more detailed salary data to the EEOC on a form they already annually submit to the agency.
If, for example, the numbers revealed that a business paid male sales employees far more than their female counterparts, the EEOC could choose to look into the matter and perhaps launch a discrimination lawsuit.
As of today, only large federal contractors provide such data to the government. Earlier this year, the Department of Labor took the technology giant Google to court for what the government called “extreme” pay disparities between men and women at the company. (The case is ongoing.)
When President Barack Obama’s rule was proposed in January of last year, Jenny Yang, former EEOC chairwoman, said officials would not have shared how much money individual employees make or how much firms pay, but they would have released an annual report showing how much workers in different kinds of jobs earn by race and gender.
The updated form would have grouped workers in ten categories, from service employees to managers to executives. It would have also lumped them into 12 annual wage bands, from about $19,000 to $208,000 and higher.
“Pay discrimination goes undetected because of a lack of accurate information about what people are paid,” Yang said at a White House news conference last year. “Collecting this pay data would help fill a critical void we need to ensure American workers receive fair pay for their work.”
Some in the business community strongly opposed the measure, saying it added an unfair burden to a company’s workload. Others said the data would not have offered a clear enough picture to right any economic wrongs.
Nancy Hammer, senior government affairs policy counsel at the Society for Human Resource Management, a global business group with 270,000 members, said the expanded data-collection process still lacked specificity to find evidence of discrimination.
“We didn’t think it would help them solve the issue they were trying to solve, which is rooting out pay discrimination,” Hammer said. “Pay has a lot of variables, and the way they collected the data was in pretty big categories.”
Hammer said wage disparities remain a problem in the United States. She recommends that employees go to their human resources department if they’re concerned about their paycheck, giving their employer a chance to explain or fix the issue.
Otherwise, Hammer said, “to really do it, you'd need to practically report on every single employee. That's not a practical way of looking at this issue nationwide.”
Federal law has banned pay discrimination since 1963. Women, though, still earn an average of 79 cents for every dollar paid to men. The gap is larger for black women, who take home 60 cents for every white man’s dollar, and Hispanic women, who average out at 55 cents.
Francine Blau, an economist at Cornell University, found in a recent study that a woman’s career decisions account for about 60 percent of the gap, while about a third is left unexplained. That leaves room, she determined, for employer bias, unconscious or otherwise.