The Obama administration will require private companies to report what they pay their employees by race, gender, and ethnicity in an effort to narrow discriminatory pay gaps.
The president will announce the new rule on Friday, the seventh anniversary of the Lilly Ledbetter Fair Pay Act. While Obama has made closing the long-standing wage gap between men and women a top priority of his administration, results have been less than stellar. When the president took office, women made 77 cents for every dollar earned by men — today that figure has risen to 79 cents.
Large companies have submitted reports on their workforce demographics to the Equal Employment Opportunity Commission since 1966. Under Obama’s new rule, companies with more than 100 employees will now have to add salary data to those reports. White House officials told the New York Times that the new requirement will allow the EEOC to better target investigations into discriminatory practices, while encouraging businesses to police themselves. The latter objective may prove more consequential — with limited resources to investigate abuses, fear of scrutiny may prove the most effective deterrent against racial and gender discrimination in compensation.
The new rule will be subject to public comment, but will not require legislative approval. President Obama also plans to call on the Republican-controlled Congress to pass legislation allowing women to sue for punitive damages on the basis of pay discrimination — a ritual he will likely follow with a recitation of the Serenity Prayer.
