United States: Preparing For New Pay Equity Requirements

Last Updated: February 27 2017
Article by Kathleen McLeod Caminiti and Sarah Wieselthier

In September, the Equal Employment Opportunity Commission (EEOC) announced its final version of the revamped Employer Information Report, known as the EEO-1, which for the first time will require employers with 100 or more employees to provide pay data to the federal government. The EEOC will not only publish aggregated 2017 pay data by industry, but also plans to use the data to drive enforcement actions and as a complement to its investigations of alleged pay discrimination.

While the EEOC under the Trump administration may ultimately modify or delay the new EEO-1 requirements, some form of pay data reporting is likely to remain in place for the 2017 pay period. Employers need to take steps now to complete the new report and avoid any surprises.

The Equal Pay Act of 1963 requires that men and women in the same workplace be compensated for equal work with equal pay. California, Massachusetts, Maryland and New York have recently implemented and/or enacted equal pay legislation at the state level. These statutes go beyond the Equal Pay Act to include anti-pay secrecy and anti-retaliation provisions, limit the affirmative defenses available to employers to justify a pay differential, and in some cases, provide for enhanced damages. Other states are actively pursuing similar legislation.

Coinciding with these legislative developments at the state level is a significant increase in lawsuits filed under the Equal Pay Act and similar state laws. The rise in litigation is most notable in the collective action arena, where a lawsuit may be filed on behalf of the employee and "other employees similarly situated."  Under the lenient conditional certification process, opt-in notices potentially could be sent to an employer's entire female workforce. With this rise in litigation, complying with these laws is essential.

Pay disparities between male and female employees likely will be highlighted by the new EEO-1 report. The EEO-1 historically captured demographic information from employers with 100 or more employees on gender, race and ethnicity by 10 different job groupings. The new EEO-1 report adds two significant components: employers must now report employee compensation and the number of hours worked across 12 defined pay bands. The first iteration of this new report, due March 31, 2018, will encompass pay data from Jan. 1 to Dec. 31, 2017, which means the new reporting requirements will have an immediate practical impact upon employers.

Employers should examine their data collection systems and ensure they have ample personnel and financial resources to complete the new EEO-1 report. It is quite possible that the information required for the EEO-1 is not maintained within the same system or cannot be easily exported to the data cells in the EEO-1 form. Consequently, employers should evaluate data systems and possibly invest in system upgrades, or entirely new systems, that will efficiently collect and report this wealth of information in the format required.

The EEOC plans to publish aggregated data from the EEO-1 by industry and use these reports in investigations of charges of pay discrimination, giving both existing and potential plaintiffs a plethora of pay data to support their lawsuits for violations of the Equal Pay Act and parallel state laws. Litigants will likely be able to acquire a company's EEO-1 report through a Freedom of Information Act request, and most certainly will request this report in discovery when a lawsuit is filed. This is most troubling in the collective action arena, where the number of litigants and the potential damages are unbounded. Equal Pay Act collective actions have already become prevalent in professional industries such as law, accounting/financial services and pharmaceuticals, and such litigation is likely to increase once the EEO-1 reports are available.

To minimize these risks, employers should conduct an internal audit of their pay practices. The audit needs to be completed with the assistance of an attorney so that it is protected by the attorney-client privilege. An audit will give employers a chance to examine the compensation afforded to employees performing substantially similar duties and determine whether there are any troubling pay disparities. If such disparities exist, the employer must determine whether they can be explained by a legitimate factor other than gender, such as a seniority system or education level. If not, the employer should take steps to correct the pay disparity, preferably before the new EEO-1 report is due. In doing so, employers need to keep in mind that they are prohibited from reducing the compensation of a male employee to achieve pay equality.

Employers should also review compensation policies and practices and develop programs to ensure compliance with federal and state pay equity legislation. This includes revising employment applications, eliminating interview questions concerning salary history, and training  management-level employees who make compensation decisions.

Compliance with the equal pay provisions of federal and state law can be costly, but failure to address pay disparity can be even more so. Employers need to consider pay equity compliance measures to minimize the costs of future litigation by employees and the public relations nightmare that could ensue from accusations of unfair pay practices.

Originally published in Risk Management

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Kathleen McLeod Caminiti
Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions