“A woman deserves equal pay for equal work. She deserves to have a baby without sacrificing her job. A mother deserves a day off to care for a sick child or sick parent without running into hardship – and you know what, a father does, too.”— President Barack Obama, 2014 State of the Union Address
Today the White House is highlighting two new actions to further support working Americans. First, the Department of Labor is finalizing a rule to require employees of businesses doing work on federal contracts to earn up to seven paid sick days a year. Second, the Equal Employment Opportunity Commission (EEOC) is publishing its final and approved collection of summary pay data by gender, race, and ethnicity from businesses with 100 or more employees to improve enforcement of our nation’s equal pay laws.
In a White House conference call with reporters, Governor Tom Wolf of Pennsylvania applauded the Administration’s actions, noting that he has been in public office for less than two years, but prior, “I was a business owner, employed up to 600-700 employees. We did all these things – paid sick leave, personal time off, holidays, long vacation time. These were not a cost to the business, they made business sense with lower turnover, better morale, healthier employees, better productivity.
“One of the things we must acknowledge: it’s not just a fair thing, a matter of public health, public good, but something that is good for business. “
More than one million workers will not have to depend on the kindness of employers because of these new rules. “Workers shouldn’t have to win the boss lottery or geographic lottery to win access to paid sick leave,” commented Equal Employment Opportunity Commission Chair Jenny Yang.
Contrary to the “sky is falling” reaction of many private employers, Labor Secretary Thomas E. Perez noted, in places where earned sick leave has been implemented – including San Francisco, Tacoma Washington, New York City and Connecticut – employers are by a wide margin satisfied. “When the law into effect [in these places] they had trepidation, but what they saw was that were able to adjust and in fact thrive.” Indeed, customers may be miffed if a waiter sneezes on their plate; other employees can be taken ill because of a worker with a flu could not afford to stay home.
“The beauty of incubators of innovation like Philadelphia, Connecticut, San Francisco, and Tacoma is that we have track record to build on and tremendous confidence that building on this part of the social contract is both good for workers, public health, families and not an undue burden on business.
“Bringing fairness and balance to workplace is really not something that should be seen as expense.”
FACT SHEET: Helping Working Americans Get Ahead by Expanding Paid Sick Leave and Fighting for Equal Pay
Since taking office, President Obama has promoted policies to grow and strengthen the middle class by supporting working families. Despite tremendous changes that have transformed America and its families over the past 50 years, our workplaces have not kept pace. In most families today, both parents work and share in the responsibilities of caring for children or other family members. Recently released data from the Bureau of Labor Statistics show that these efforts have resulted in strong progress for America’s working families. Today, a record share of private sector workers now have access to paid sick leave, increasing from 61 to 64 percent over the past year. Furthermore, this increase was driven almost entirely by increased access in low-wage jobs: in just one year, the share of workers in the lowest-paid quarter of occupations that had access to paid sick leave jumped from 31 to 39 percent. Since the President took office, the number of private sector workers with paid sick leave has grown by 10.6 million.
Despite this progress, millions of Americans still do not have access to even a single day of paid sick leave, so when workers get sick they may have to choose between caring for themselves or paying their bills. Too many parents must make the painful choice between staying home to take care of a sick child—and losing out on a day’s pay—or sending their child to school sick. For that reason, President Obama has repeatedly called on Congress to pass the Healthy Families Act—which would guarantee most Americans the chance to earn up to seven days of paid sick leave each year—and urging states, cities, and businesses to act where Congress has not.
Similarly, despite a woman’s pay being just as critical for a family to make ends meet, women make less than their male peers. The President has fought to close that gap, and the first legislation he signed into law was the Lilly Ledbetter Fair Pay Act, an important step in ensuring that Americans can effectively challenge unequal pay in the courts. Since then, he has taken numerous other steps to advance equal pay, including issuing a 2014 Executive Order prohibiting federal contractors from discriminating against employees who discuss their pay, and announcing a White House Equal Pay Pledge that has now been signed by more than 50 of America’s leading businesses.
Similar to the expansion of paid sick leave, progress has been made on the gender pay gap. In 2008, a typical woman working full-time earned only 77 cents for every dollar earned by a typical man; today, that has risen to 80 cents. That means that for a woman working full-time, the pay gap has shrunk by more than 10 percent, or about $1200, since the President took office.
Yet much work remains. Too many women and workers of color are still not paid equally for equal work, with African-American women earning 63 cents and Latina women earning 54 cents for every dollar earned by a white non-Hispanic man. And 41 million private sector workers do not have access to even a single day of paid sick leave. Today’s actions mark critical progress to support the needs of working Americans and their families.
EXPANDING SICK LEAVE
Last September, President Obama signed an Executive Order requiring federal contractors (and subcontractors) to allow their employees working on federal contracts to earn up to seven paid sick days each year. Today, the Department of Labor is finalizing its rule implementing the order. It takes into account extensive public comments from employers, business associations, small businesses, workers, unions, and worker advocates. The final rule, which goes into effect for new solicitations issued on or after January 1, 2017, will:
- Give additional paid sick leave to 1.15 million people working on federal contracts, including nearly 600,000 employees who do not currently have even a single day of paid sick leave. Workers will earn one hour of paid sick leave for every 30 hours worked on (or in connection with) a covered federal contract, up to 56 hours in a year or at any point in time.
- Allow workers to use paid sick leave for their own illnesses, preventive care, or other health care needs; to care for a family member or loved one who is ill, seeking preventive care, or otherwise in need of care; and for absences resulting from domestic violence, sexual assault, or stalking. Employers may not retaliate against employees for using paid sick leave or require them to find replacements in order to take it.
- Improve the health and performance of employees of federal contractors and bring benefits packages offered by federal contractors in line with leading firms, ensuring they remain competitive in the search for dedicated and talented employees.
- Protect public health by reducing the transmission of illnesses in the workplace from sick employees to coworkers or their customers.
- Respond to employers’ concerns by ensuring coordination with existing “paid time off” policies that give workers a flexible bank of leave; existing collective bargaining agreements; and multi-employer plans.
This action reflects leading practices by major employers, states, and localities throughout the country. Since the President’s call to action in 2014, four states and more than 25 cities and counties have taken action to expand paid sick leave in their community, and many businesses small and large have adopted similar policies. For example:
- Minneapolis and St. Paul, Minnesota passed ordinances in May and September, respectively, requiring businesses to offer their workers an hour of paid sick time for every 30 hours worked. Both ordinances go into effect on July 1, 2017 with phased implementation periods. The Twin Cities have a joint population of nearly 700,000 residents, though the ordinances cover anyone who does work within the respective city limits.
- Vermont Energy Investment Corporation (VEIC), a nonprofit clean energy consulting company and federal contractor in Vermont, testified in support of Vermont’s new paid sick leave law, passed earlier this year. VEIC’s founder pointed to the monetary, physical, and cultural value of paid sick leave to employers.
- Cava Grill, a fast-casual national restaurant brand headquartered in Washington, DC, announced in July that it began offering paid sick and parental leave to its hourly workers, for whom it also raised its starting wage to $13 an hour. Employees will now receive up to six days a year of paid sick leave, up to four days of paid parental leave, and one day for community service.
- Microsoft, a federal contractor, took a similar step last year by announcing it would require suppliers with at least 50 employees doing business with the company to provide employees who handle its work with 15 days of paid leave annually (including 5 paid sick days). In announcing this change, Microsoft pointed to research showing that paid leave contributes to the health and well-being of workers and their families, strengthens family ties, increases productivity, improves retention, lowers health-care costs, and contributes to the health of colleagues.
ADVANCING EQUAL PAY
Today, the EEOC, in cooperation with the Department of Labor, is publishing its finalized revisions to its EEO-1 form, which for the first time will collect summary pay data, broken down by gender, race, and ethnicity, from all businesses with 100 or more employees. This data collection, which stems from a recommendation by the President’s Equal Pay Task Force and a Presidential Memorandum issued in 2014, is expected to cover roughly 63 million employees and 60,000 employers.
Today’s action will promote improved voluntary compliance by employers with existing equal pay laws. It will also help EEOC and the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) better focus investigations on employers who are illegally shortchanging workers’ pay based on their gender, race, or ethnicity.
The data will be a tool not only for the federal government, but for employers as well. It will help employers evaluate their own pay practices to prevent pay discrimination in their workplaces. The EEOC will also compile and publish aggregate data that will help employers in assessing their pay practices relative to others in the same industry and geographic area.
Businesses have long used the EEO-1 form to report demographic information on their workforces. With the revised EEO-1, businesses also will report summary data on the range of compensation paid to employees of each demographic group. Businesses will not be required to disclose individual employees’ salaries.
Employers will first be required to submit pay data for 2017 by March 31, 2018, giving them 18 months to prepare for the change. This revision does not impact the 2016 EEO-1 report, which is due on September 30, 2016 and is unchanged. EEOC will be offering webinars and technical assistance to employers, payroll and human resource information system providers, and other stakeholders in preparation for the new submission requirements.
Today’s publication of the revised form comes after the EEOC approved this action by a vote of the Commission, and follows final approval by the Office of Management and Budget pursuant to the Paperwork Reduction Act. The EEOC is an independent government agency that enforces federal laws prohibiting employment discrimination based on race, color, religion, sex, national origin, age, disability, and genetic information.
BUILDING ON A RECORD OF SUPPORTING WORKING FAMILIES
Since taking office, President Obama and his Administration have taken a number of actions to support working families and combat the pay gap, including:
- Publishing a final regulation by the Department of Health and Human Services to implement the Child Care and Development Block Grant Act of 2014. The program provides subsidies to working families and last year provided services for roughly 1.4 million children aged 0-13, most of whom are younger than 5. The rule, which has not been comprehensively revised since 1998, will provide a roadmap to states on how to implement the new law and clarify ambiguities around provisions that deal with eligibility for services; health and safety requirements; and how best to support the needs of parents and providers as they transition to the new law. It also clarifies that worker organizations can provide professional development to child care workers and contribute to discussions around the rates states set for subsidies.
- Signing his first piece of legislation as President, the Lilly Ledbetter Fair Pair Act, in January 2009 making it easier for employees to challenge unfair pay practices.
- Creating the National Equal Pay Task Force in January 2010 to implement his pledge to crack down on violations of equal pay laws, which included representatives from the Equal Employment Opportunity Commission, the Department of Justice, the Department of Labor, and the Office of Personnel Management. The Task Force has issued reports on its progress, including Fighting for Equal Pay in the Workforce, Keeping America’s Women Moving Forward, and Fifty Years After the Equal Pay Act. In addition, since the creation of the Equal Pay Task Force in 2010, the EEOC has received over 18,000 charges of sex-based pay discrimination, and through its independent enforcement efforts, the EEOC has obtained over $140 million in monetary relief for victims of pay discrimination on the basis of sex.
- Calling on Congress to pass the Paycheck Fairness Act, commonsense legislation that would strengthen the Equal Pay Act of 1963 by closing loopholes in the defenses for equal pay violations, providing stronger remedies, and expanding protections against discrimination for employees who share or inquire about information about their compensation at work.
- Signing a Presidential Memorandum in May 2013 directing the Office of Personnel Management to develop a government-wide strategy to address the gender pay gap in the federal workforce, leading to a report in April 2014 and new guidance in July 2015—which cautioned against reliance on a candidate’s existing salary to set pay, as it can potentially adversely affect women who may have taken time off from their careers or propagate gaps due to discriminatory pay practices by previous employers.
- Issuing an Executive Order in April 2014 and publishing a Department of Labor rule in September 2015 prohibiting federal contractors from discriminating against employees who discuss or inquire about their compensation.
- Announcing a White House Equal Pay Pledge, with more than 50 leading businesses signing on to take action to advance equal pay. By signing the pledge, these companies are committing to conduct an annual company-wide gender pay analysis, review hiring and promotion processes, embed equal pay efforts in broader equity initiatives, and identify and promote best practices that will close the wage gap.
- Hosting a White House Summit on Working Families in June 2014, highlighting the issues that women and families face, setting the agenda for a 21st century workplace, and announcing of a number of steps to help working families thrive.
- Hosting the United State of Women Summit in June 2016, highlighting the progress that has been made over the course of this Administration and discussing public and private sector solutions to the challenges that still lie ahead.
- Signing a Presidential Memorandum in January 2015 directing federal agencies to advance six weeks of paid sick leave to federal employees with new children, calling on Congress to grant another six weeks of paid leave for federal employees, and calling on Congress to pass legislation that gives all American families access to paid family and medical leave.
- Publishing a final Department of Labor rule in May updating outdated overtime regulations, expanding overtime pay protections to 4.2 million additional Americans, boosting wages for workers by $12 billion over the next 10 years, and allowing workers to better balance their work and family obligations.
- Issuing an Executive Order in February 2014 requiring federal contractors to raise their minimum wage initially to $10.10 an hour, indexing it, and lifting the tipped minimum wage (which disproportionately impacts women)—and urging Congress, states, cities, and businesses to do the same.
- Issuing an Executive Order in July 2014 and publishing a Department of Labor rule in December 2014 prohibiting federal contractors from discriminating in employment on the basis of sexual orientation or gender identity.
- Directing the Office of Personnel Management and federal agencies to enhance workplace flexibility for federal employees to the maximum extent practicable, including enshrining a right to request flexible work arrangements.
- Signing into law the Telework Enhancement Act of 2010, which requires agencies to support and establish policies for telework by eligible employees.
- Calling on Congress to pass the Pregnant Workers Fairness Act, which would require employers to make reasonable accommodations to workers who have limitations from pregnancy, childbirth, or related medical conditions (unless it would impose an undue hardship on the employer). The legislation would also prohibit employers from forcing pregnant employees to take paid or unpaid leave if a reasonable accommodation would allow them to work.
- Finalizing a Department of Labor rule updating its sex discrimination guidelines for federal contractors for the first time since 1978, to align with current law and address barriers to equal opportunity and pay, such as pay discrimination, sexual harassment, hostile work environments, a lack of workplace accommodations for pregnant women, and gender identity and family caregiving discrimination.
- Increasing investments to expand access to high-quality early care and education, including efforts under the Race to the Top-Early Learning Challenge program, Preschool Development Grants, Head Start and Early Head Start, and a landmark proposal that helps all eligible working families with young children afford high-quality child care.
- Announcing the Department of Labor’s award of $54 million in “Strengthening Working Families” grants to help low- to middle-skilled parents access the affordable, quality child care they need to earn an education, participate in training programs, and compete for better-paying jobs in emergency industries.
- Expanding access for women to higher-paying jobs through a proposed rule updating equal employment opportunity requirements in registered apprenticeships and through a Mega-Construction Projects (MCP) Initiative at the Department of Labor.