It doesn’t take a genius to figure out that the outcome of the Presidential Election in less than two weeks will have a significant impact on many public policy issues facing employers. We have a basic idea that when it comes to workplace and workforce issues, a Hillary Clinton Administration will look and feel a lot like a third Obama Administration. If Donald Trump wins, which as of this writing seems highly unlikely, we really have no idea what, if any, agenda he would have in this space. Based on some of Trump’s statements, he’s more interested in letting others do the governing part which means the leadership baton from a policy standpoint would likely be passed to the Congressional GOP majority, assuming they are still in place.
There is one very important issue, in particular, that will be front and center for HR professionals and their colleagues in corporate communications if Clinton does indeed win. That is the issue of pay equity, or as it is known politically, equal pay.
Under Title VII of the Civil Rights Act of 1964, employers are already required to keep relevant records that help determine whether an unlawful employment practice existed or is being committed. Earlier this year, the EEOC expanded those requirements when it finalized revisions to the Employer Information Report (EEO-1), which mandated the collection of additional pay data from employers (including federal contractors) with more than 100 employees. The new rule, that a Clinton administration would inherit, requires employers to report the number of people employed, job category, race, ethnicity and gender. Reporting gets a little complicated, but in short, the EEOC set up 12 pay bands to be used for reporting each of the EEO-1 job categories, demographics and compensation. The first band is for pay less than $19,239; the 12th band is for wages greater than $208,000. The precise amount paid to each employee in a pay band does not have to be reported, however, it will be audited through W-2s for any three-month period during a year. The hours of each employee will have to be reported as well. The 2017 deadline to comply with the new regulation has been extended to March 31, 2018. Most importantly, the EEOC states that it will use the data to target employers for systemic pay discrimination investigations.
The compliance burden is only part of the issue. The larger problem will be the political and reputational narrative the data drives. If you are an employer in a company or industry whose managerial demographics are drastically different from your frontline employees, you will likely be the focus of special attention. To over simplify, if your rank and file are relatively diverse with regard to race and gender and your managers are very male and very white, you may have some explaining to do–and not just to the EEOC. To politicians, opinion leaders, the labor community, economic and social justice advocates, lawyers and any stakeholder who champions the pay equity agenda.
And the spiritual leader of that movement? Hillary Clinton. Of all of the workplace issues, this will be the one that gets her full attention. Companies need to get really smart, really fast on this issue or they may quickly find themselves not only in a legal quagmire but in a public and employee relations nightmare for which they are ill-prepared.
Joe Kefauver is managing partner of Align Public Strategies, a full service public affairs and creative firm that helps corporate brands, governments and nonprofits navigate the outside world and inform their internal decision-making. For more information, go to AlignPublicStrategies.com.