The White House announced Friday that it plans to start collecting data on the earnings of women and minorities at large U.S. companies in order to address pay discrimination.
Under the proposal, the Equal Employment Opportunity Commission and Labor Department would compile "summary pay data" broken down by gender, race and ethnicity at employers with 100 or more employees. Companies would not be required to fork over individual worker's names and salaries, only the aggregate numbers.
The government already has a similar requirement, but it only pertains to federal contractors. The new proposal, which isn't finalized, would cover big employers throughout the private sector, involving an estimated 63 million workers. Businesses have two months to offer comments.
Why require companies to do this?
The White House said there are two reasons. First, it would compel companies to take a closer look each year at what they're paying women and minorities relative to other employees. Having to do such an annual review might help companies find wage gaps among their own workforces and address them on their own. Half a century ago, the Equal Pay Act and the Civil Rights Act made it illegal to pay one employee less than another because of race, ethnicity or gender.
But the data would also help the EEOC find pay disparities in particular industries. The EEOC is responsible for enforcing civil rights laws in the workplace, and the White House says the data it wants to collect would help the agency figure out where problems are. (Ditto for the Labor Department, which has to track discrimination among federal contractors.) Large employers already must provide the government with data on the diversity of their workforce, but those requirements don't include pay figures.
Jenny Yang, the EEOC's chair, said in a statement that pay discrimination "remains a persistent problem" and that the new data would be a "significant step" in addressing it.
The White House announced the proposal on a day it was celebrating the seventh anniversary of the Lilly Ledbetter Fair Pay Act. That law, the first signed by President Barack Obama, gave workers more time to file claims against their employers if they were victims of pay discrimination. The law's namesake worked for Goodyear Tire for nearly 20 years and discovered after her retirement -- via an anonymous tip -- that she'd been paid less than her similarly skilled male colleagues. The Supreme Court said her claim was invalid because she hadn't filed it within 180 days of her last paycheck.
In a report released Friday, the White House Council of Economic Advisers said the typical American woman working full time still earns "21 percent less than the typical man." The council said the U.S. gender wage gap is 2.5 percentage points larger than in the average industrialized country.