On Friday, President Barack Obama observed the anniversary of seven years since he signed the Lilly Ledbetter Fair Pay Act into law. The act was designed to help close to gender pay gap, and to that end, the president honored the anniversary by instituting a new executive order aimed at strengthening the ability of employees to combat pay inequality.
The executive order institutes a new regulation requiring that companies with 100 employees or more report their employees’ pay divided by gender, race and ethnicity to the Equal Employment Opportunity Commission.
The White House announced that the reasoning behind this measure was twofold. First, they hoped that an annual review of pay broken down by gender, race and ethnicity might on its own at least draw attention to the differences in pay between groups. It is hoped that employers will be able to actual see the pay disparity and therefore feel compelled to do something about it.
Secondly, the data will help the EEOC to identify particular industries where the pay gap seems to be a persistent problem.
The president is also calling on Congress to pass the Paycheck Fairness Act, which would keep employers from discouraging their employees from talking about their salaries and pay and would increase penalties for pay disparities. This is particularly important, as a lack of transparency makes it hard for individual employees to identify pay gaps if they are discouraged from knowing what other people in the workplace are making.