Mick Mulvaney, director of the Office of Management and Budget, testifies before the Senate Budget Committee on Feb. 13, 2018. (Photo: Diego M. Radzinschi/ ALM)

Federal budget officers are defending their authority to suspend an Obama-era pay data collection rule that would require more U.S. companies to make greater disclosures about employee compensation.

Employee rights advocates last year sued Trump administration officials after they stayed the rule, which was aimed at addressing the gender wage gap. The lawsuit, filed last year in U.S. District Court for the District of Columbia, targets the Office of Budget Management and the Equal Employment Opportunity Commission.

The complaint alleged that Trump officials thwarted implementation of the rule without public comment and at the behest of special interest groups. Trump officials, responding this week to the suit, argued that their decision falls within agency authority.

Companies with more than 100 employees would have been required to report to the EEOC pay data by race, ethnicity and gender on a required EEO-1 form. Democracy Forward and the National Women's Law Center, the plaintiffs in the case, are urging a judge to reinstate the requirement.

The Trump budget office stopped the rule through the Paperwork Reduction Act, which gives the Office of Budget Management the power to determine whether a burden was imposed by the collection of information and to oversee collection of information.

The response, filed by the U.S. Justice Department, argued the advocacy groups do not have standing to bring the claims and that there is no statutory provision mandating the disclosure of pay data.

“The challenged action to review and stay maintains the status quo because the EEOC has never collected—let alone published—the pay data of which plaintiffs now claim to be deprived,” the Justice Department said in court papers. “Nor can plaintiffs show that their inability to obtain pay data is caused by OMB where, as here, the EEOC is under no statutory obligation to disclose the data even if collected, and indeed, as plaintiffs acknowledge, has discretion over whether to disclose the same.”

The advocacy groups say the new collection of pay data is crucial to addressing the pay gap, which estimates women make 80 cents on the dollar compared to their male counterparts. This difference is even more drastic for women of color, with Latina and African-American women making $0.54 and $0.63 cents on the dollar compared to white men. The collection would have affected 60,886 employers, or about 63 million workers.

Business groups, including the U.S. Chamber of Commerce, pushed back against the requirement, calling it burdensome and arguing it would provide an inaccurate snapshot of the workforce, potentially opening up companies to liability. The Chamber last year called for budget director Mick Mulvaney to revisit the rule.

The EEOC itself is poised for change. President Donald Trump's picks—Janet Dhillon, former Burlington Stores general counsel, and West Point professor Daniel Gade—have not yet been approved by the U.S. Senate.

Victoria Lipnic, the acting chair, suggested last year that, under a Republican majority, the commission may not continue to push for pay data collection efforts. She said she did not vote for the original EEO-1 rule change.

 

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