The rule compelling companies to submit additional information about employees and wages to the Equal Employment Opportunity Commission was finalized in September 2016 and would have taken effect next year.
The U.S. Chamber of Commerce, among other industry groups, opposed the measure from the outset, arguing that it put an unfair burden on employers.
Since his election, President Trump has frozen or rolled back dozens of regulations that the White House says cost American businesses and the economy billions of dollars.
In the case of the Trump administration's stalling the wage data rule, lawyers say the central concern is whether officials talked to equal-pay advocates or conducted meaningful research before shutting it down.
The lawyers say the Office of Management and Budget has the legal right to block the measure but must meet certain legal requirements to do so — namely, demonstrating that the EEOC failed to correctly assess the financial impact of the proposal on businesses, or that the agency did not conduct a proper public review in the first place.
“There are real questions here about whether the applicable legal standards were met and whether this stay is valid,” Martin said.
Jenny Yang, the chair of the EEOC under President Barack Obama who led the rulemaking, said the effort to implement the rule was the result of six years of research and consultation with employers, companies that process pay data, academics and groups focused on curbing workplace discrimination.
Yang, who now serves as one of the four EEOC commissioners, complained that Trump’s team froze the plan without reaching out to its architects. (The current EEOC acting chair had voted against the rule.)
“We’ve been pretty much in the dark about the process,” Yang said.
The NAACP, the National Employment Lawyers Association, the National Organization for Women and other key groups were never consulted by Trump officials about the decision to freeze the rule, Martin said.
“There hasn’t been any transparency,” she said.
The EEOC's revised data-collection process, which would have gone into force in March, would have required firms with 100 or more employees to provide extra employee and salary information to the agency on an existing form, known as the EEO-1.
The new rule would have grouped workers in 10 categories, including service employees, managers and executives. It also would have grouped them into 12 wage bands, ranging from $19,000 and under to $208,000 and beyond.
The EEOC estimated that the additional data collection would cost $25 million a year, or about $416 per company.
The Chamber, however, put the cost at $1.3 billion a year for businesses. “This is a huge additional cost for companies of all sizes, yet has no accompanying benefit, or protections for the confidentiality of the information to be gathered,” the business lobby group wrote in an open letter.
After Trump launched his deregulation agenda, Neomi Rao, who heads the Office of Information and Regulatory Affairs, stayed the rule, saying in an Aug. 29 letter to the new acting head of the EEOC that the requirement was unnecessarily burdensome and lacked “practical utility.”
Victoria Lipnic, whom Trump appointed in January as acting chair of the EEOC, publicly expressed concerns in April about the burden the rule could put on businesses. (Neither Rao nor Lipnic responded to requests for comment.)
Ivanka Trump, meanwhile, supported the administration's decision to halt the rule. The first daughter and adviser to the president has positioned herself a champion for women, advocating policies that support female breadwinners.
“Ultimately, while I believe the intention was good and agree that pay transparency is important, the proposed policy would not yield the intended results,” she said in an August statement. “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.”
Yang argues that expanding the government's data collection would have provided a clearer picture of pay scales — and that the filing requirements were reasonable. “We have no interest in spending time or resources investigating employers who don't have a problem,” she said. “If we do open an investigation, we would collect much more granular data that would allow us to compare workers in the same jobs.”
As of today, employees have few tools to figure out whether they’re being paid fairly, said Kate Bahn, an economist at the Center for American Progress, a left-leaning think tank in Washington. Workers typically discover disparities by talking to their colleagues or, say, accidentally spotting salary information on a computer screen.
“Addressing pay disparities is very difficult to do,” she said. “Getting data is one way to help us understand it more.”
Hilary Shelton, director of the NAACP’s Washington bureau, said Lilly Ledbetter, the woman who inspired the 2009 Fair Pay Act, didn’t realize she made less money doing the same job as her male counterparts until she retired and someone left her an anonymous note.
“In order to manage a problem, you have to first measure it,” Shelton said.
In the United States, the average man in virtually every occupation makes more money than the typical women. Economists say roughly a third of the gender wage gap is “unexplained,” even when controlling for education, experience, industry and region. That leaves room for discrimination, some academics argue.
Pay disparities persist for men of color, as well. For every dollar a white man makes, black men take home 72 cents and Hispanic men earn 62 cents.