Review & Outlook An Obama Pay Rule Dies Companies won’t have to disclose reams of wage and salary data. Photo: Getty Images By The Editorial Board The Editorial Board The Wall Street Journal A long-time progressive goal has been to use charges of a gender pay gap to begin dictating salaries in the private economy. This week the Trump Administration halted an Obama Administration step toward that end. The Office of Management and Budget on Tuesday stayed an Equal Employment Opportunity Commission (EEOC) rule dealing with a bureaucratic form known as EEO-1. The old EEO-1 required federal contractors and any company with more than 100 employees to submit data about their workforces—including breakdowns by race, ethnicity, gender and job category. In 2016 Team Obama added a demand for data on pay, effective March 2018. The rule is a typical end-run around Congress, which refused to enact President Obama’s Paycheck Fairness Act that would have enabled such wage-data collection. Mr. Obama also tried to coerce such data through the Office of Federal Contract Compliance Programs. When that failed, EEOC got the mission. The Trump OMB cited the exorbitant cost and hassle of compliance for staying the rule, and that’s reason enough. The old EEO-1 form required about 180 pieces of information, while the Obama form increased that 20-fold to 3,660 data points per report. The Obama EEOC said the rule would cost about $50 million a year and 1.9 million hours to comply. But a Chamber of Commerce survey found the direct compliance costs alone would be closer to $400 million and eight million hours of labor. Add indirect overhead and annual costs jumped to $1.3 billion. The Paperwork Reduction Act requires agencies to show that regulations have value and to minimize their cost. Yet the new EEO-1 form would have provided little real insight into pay disparity. The form would not have provided information about employee experience, education, flex-time, benefits, hours worked, or myriad other factors that go into pay decisions. The rule would have created a sweeping data base that bureaucrats could manipulate to engineer accusations against corporations. Recall how the Consumer Financial Protection Bureau inferred discrimination in auto lending based on borrower names likes Johnson. The EEOC can already subpoena pay information if it has a credible allegation of discrimination. The rule would also have turbocharged pay litigation, as tort attorneys capitalized on EEOC assertions. A federal judge in July required Google to hand over employee records to Labor Department investigators looking at a supposed “systematic” pay gap, and a class-action suit can’t be far behind. The stay is among the first recommendations by Neomi Rao, who now runs the White House regulatory shop, and it is good news for employers and workers who want to be paid on the basis of their talent and effort, not the dictates of government. Appeared in the August 31, 2017, print edition.