Coming Soon to a Workplace Near You?: Published Pay Information

| February 1, 2016 | Overtime Law, Wage & Hour

For every woman who’s ever questioned if she is paid less than her male colleagues, President Obama has an answer: Let’s run the numbers.

According to a proposed rule, businesses with more than 100 employees will soon provide salary data to the EEOC annually, along with the more general information on workforce demographics employers have supplied since 1966. This information, which will break down salaries by gender as well as race, will help the agency target its investigations of alleged instances of workplace discrimination.

“Women are not getting the fair shot that we believe every single American deserves,” President Obama said in announcing the proposed rule on January 29, the seventh anniversary of the Lilly Ledbetter Fair Pay Act, which makes it easier for female employees to sue their employers for unequal pay. “What kind of example does paying women less set for our sons and daughters?”

The wage gap between American men and women remains substantial, with studies showing that American women still earn just 79 cents for every dollar earned by men. Further, the gender wage gap in the U.S. is 2.5 percentage points larger than the average among industrialized countries, according to a report from the Council of Economic Advisers.

According to at least one CEO, the power of cold hard numbers could help push this needle. Marc Benioff, the CEO of the cloud-based software company Salesforce, was one of the order’s vocal supporters. At a conference organized by Fortune magazine last November, Benioff recounted how he was sure women were paid equally to men at his company—until he actually ran the numbers. Spurred by complaints raised by two female employees, Saleforce reviewed the pay of 17,000 employees, and concluded that women needed a pay adjustment to the tune of $ 3 million.

If the President’s rule is adopted, will more CEOs follow suit? Although the information provided by companies under President Obama’s order will not be automatically provided to the public, it will likely be available by requests filed under the Freedom of Information Act (“FOIA”). If employees request this information, it could quickly become of the most powerful tools in the arsenal for fighting workplace discrimination.