VA to Examine Company Payrolls, Hunting Bias

By Steve Haner

How bad is the climate for business in Virginia now? Just how much does this New Blue General Assembly detest and distrust evil capitalists? Let’s look at one little bill first noticed Monday in the long string of bills rushing toward Tuesday’s deadline for action. House Bill 624 won’t be the worst bill of the session, but it is very revealing of the new mindset.

Del. Chris Hurst, D-Blacksburg, sold this bill to the House of Delegates Monday with the common and debatable statistic that women earn 79 cents compared to every dollar earned by men. He wants the state to take on the role of ferreting that out worker by worker and devising a state-enforced solution. Doing so will mean $24 billion more paid to female Virginia workers, he claimed.

Step one is a small thing, a simple requirement that every business in Virginia with 100 or more employees file an annual report on how it pays its employees, by gender (just the two?). The reports will be filed with the Office of the Attorney General, which seems willing to take on the task, based on the low-ball financial impact it filed on the bill. It needs a couple more people, some work on its IT systems – maybe $300,000 a year, it reported. Really?

What data will every employer need to provide on every employee every year?

B. Any company that employs 100 or more employees shall provide annually to the Division the following information for each employee: (i) gender, (ii) race, (iii) job title, (iv) department, (v) job grade or level, (vi) hire date, (vii) job location, (viii) hours worked over the past 52 weeks, (ix) base wage or salary, (x) overtime pay and bonuses or other forms of compensation, (xi) applicable performance scores or ratings, (xii) level of education, and (xiii) years of experience in the relevant field or industry.

Remember, these are the same people who are passing legislation to make it illegal for the employer to ask your salary history. Now the state will have its own 13-field database on that, and so much more. This appears to a different data set than the federal government is now requiring of the same companies.

As introduced, the bill applied to employers of 500 people or more. At one point as it worked its way through committees that was reduced to 25 employees or more. Just moving the threshold from 500 down to 100 multiplied the number of mandatory reports to be filed and examined exponentially. 

The Attorney General’s Office, apparently salivating over the incredible amount of statistical evidence to mine coming its way, has left the initial and knowingly false fiscal impact statement intact. It will take a large group of new state government employees to compile and sort through such reports. The larger the team of inspectors, the more they will find.

The data is not going to rest in some ignored spreadsheet. Read the bill! It will be used to do something:

By November 30 of each year, the (Human Rights) Division shall develop a standard for how to evaluate discrimination in compensation on the basis of gender as prohibited by § 40.1-28.6. Such standard shall be developed utilizing the information received pursuant to subsection B.

2. That the Division of Human Rights shall provide recommendations regarding appropriate enforcement mechanisms, including causes of action and civil remedies, to address discrimination in compensation to the General Assembly by November 30, 2020.

When challenged in a brief debate, Hurst dodged the question of whether this bill is laying the groundwork for a wave of enforcement litigation, but clearly that is the intent. Because the debate caused drowsing delegates to wake up for a second, the bill initially failed on a voice vote. But once they were “put on the board,” enough Democrats rallied to Hurst’s cause to save the bill 51-39. A final third reading vote will occur today.  (Update:  It passed 54-44.)

The cost to the taxpayers to compile and analyze the reports is tiny compared to the compliance cost to be imposed on thousands of companies, some Virginia based and presumably many others from out of state or overseas. There was no discussion on the floor of whether it would make more sense to merely seek copies of federal reports, or (heaven forbid) let the federal government do the policing. This is a whole new task for every human resources department and a new set of regulators to deal with.

All those companies are already under legal mandate to pay male and female workers the same wage for similar work and circumstances, and most are very sensitive to complaints on that front. The debate persists because paying the same for the same job is only a part of the disparity, which also reflects the smaller (but growing) share of women in skilled, professional and management jobs, and the time they take off for child rearing.

But if Virginia’s General Assembly and activist attorney general can be seen to be doing something, if they can ferret out some employer and flog the company into paying women more (call the media!), then the compliance burden will be justified in their minds. Companies have an easy solution. If already here, move out. If thinking about coming to Virginia, don’t. By March this will be just one of a dozen new reasons to flee.

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27 responses to “VA to Examine Company Payrolls, Hunting Bias

  1. I don’t think a sea of bureaucrats will be needed , the data likely already exists and it’s just a matter of extracting it and putting in a state database and running some software to spit out reports.

    I suspect the real intent of the legislation is to tell employers who are discriminating that we know who they are and we could take action especially if there are complaints from individual employees.

    However, I’d object to this – not as strongly as Steve because there are already laws on the books to deal with inequitable treatment of employees, as well as sanctions if a court case is filled and successful , so it’s not like it’s not a legitimate function of government – or perhaps lets’ say that issue was already decided some time ago with respect to whether or not it is the legitimate interest of government to deal with discriminatory treatment of individuals.

    We are, more and more, of two minds, politically, on issues like this. We have folks who think we’ve already gone too far and others who say there still is discrimination ongoing. As usual, finding the middle is not easy or agreeable.

    • This data don’t exist, and aren’t reported elsewhere. It’s similar to EEO-1 reporting, but at an actionable level of granularity and with enough differences to make compilation a gigantic pain, which from the company’s side means a month + of analyst time to figure out the correct way to pull this data and a month or two of lawyer time to get super crisp on definitions and potentially lobby the implementation.

      Once you’ve pulled the data together, then you’ve created a course of action for a lawsuit, since you “know” the data.

      Then the nightmare really begins…you’ve got a several months of combing through all the data, identifying possible risks, and mitigating, engaging analytics, compensation, lawyers, and execs from the company. And that’s before the AG comes knocking with lawsuits. And then of course what happens when the data gets either published or hacked from the AG.

      California isn’t close to this challenging, and I’m frankly astonished that lobbyists couldn’t get this quietly killed in committee.

  2. Two things come to mind as a retired state employee: First, I hope that the Commonwealth looks at their own practices. Second, impact statements like this are, at best, guesses made up in the middle of the day when someone from the GA calls a state office at 1:00 and wants specific information by 2:00. Usually a staffer didn’t realize it was even needed. My office had to fill these requests many more times than I like to remember.

    • They can be appealed, but perhaps only by the patron. Note it also went to Appropriations for review. This is intentionally misleading.

      • It will be interesting to see if the House version of the budget includes an additional $300,000 for the AG’s office to cover the fiscal impact. It should; otherwise, Appropriations should not have reported it.

        By the way, JLARC will review a FIS, but only if requested to do so by the chairman of a committee.

        • It’s a shame can’t FOIA the fed data!

        • Update: a revised FIS was posted yesterday, after my story but probably not in response to my story. Only slightly higher, another 100K. If that is all the staff they have doing this, it means they will just hold the data and then wait for complaints before they dig in…..goodie. Senate should kill this.

  3. It always cracks me up that the same liberals who bemoan Donald Trump’s twisting of facts and “lying” are the same folks who refuse to stop perpetuating this .79 on the dollar nonsense. #fakenews

    How many times must this be debunked before people accept that it is a myth and a catchy false statistic made up for the express purpose of finding discrimination that doesn’t exist. Now here in VA we’ll have a whole section of the OAG dedicated to trying to find statistics that will support this fabricated .79.

  4. Whatever will they do when they collect all this data and find out that the two main causes of the disparity in male and female pay are (1) years in the workforce, and (2) choice of occupation?

  5. Another very fine post by Steve Haner whose posts read like dispatches from behind enemy lines. Notice their depth, the insights embedded therein, the matrices that arise as you link up those data and information points. Think about all of what you see peering down in the deep. What you will see then, even feeling the chill of it all, is the workings and building of a police state, its apparatus, its attitude, its hate.

  6. Because the data already exists on the federal level, hopefully common sense will reign on the Senate side and the bill will be amended to require employers only file copies of their federal reports with the state.

    What worries me most about this bill is giving the responsibility of compiling and analyzing this data to the AG’s office. There was a time when the AG functioned as the law firm for the state, representing the state and agencies in litigation, providing legal advice, and services, such as real estate transactions. More and more operational responsibilities have been added to the office’s functions and this would be another one, making the AG even more of a political office (if that is possible). It seems to me that the Dept. of Labor and Industry would be the more appropriate agency to collect this data.

  7. I had thought that women made 89 cents for each dollar made by a man. And this is 2020? The

    In any event, docking women has been around for years. When i was an intern at the Pilot the paper back in 1973was in a big lawsuit because it paid all men on a higher “a” scale. Women on a lower “b” scale. Same thing around that time with WaPo. Ratifying ERA will help such inequities. I don’t see deep state here. I see justice.

  8. 47 years ago some newspapers that Peter worked at did discriminate. 50 years ago a whole lot of places discriminated. Relevance to 2020?

    The ERA isn’t raified and won’t be. But on the 1/1000 chance that it is, glad that men will no longer be paying spousal support and will no longer have minority rights as parents. Also happy that my car insurance will go down. Welcome to the selective service ladies!

    • Unfortunately 20 years ago there was a difference and those same women from 20 years ago never got a fair start and as a result, are still paid less. As they moved up the scale, raises and pay in promotions were derived from the salary they were earning at the time. Bottom line, a female and male who followed the same career path for twenty years continue to have a difference in salary.

  9. “By November 30 of each year, the (Human Rights) Division shall develop a standard for how to evaluate discrimination in compensation on the basis of gender as prohibited by § 40.1-28.6.”

    That is a very awkward sentence.

  10. I think a lot of employers have a payroll hunting bias.

    I haven’t been able to take a paid day off on opening day of deer season for several years, now…

    😉

  11. Every employer where I ever worked bent over backward to attract, hire and retain women. That included raises. When the economy faltered and it came time for RIFs white males went to the front of the line. Any attempt to RIF a woman or minority required a special write-up (stupidly called a “business case”) to justify the lay off. I guess there are still some businesses where women are discriminated against but I’ve never worked for one.

    The last two big companies where I worked have women CEOs.

    However, if our General Assembly wants to continue its long legacy of implementing bad ideas far be it from me to fail to profit. These regulations will require special processing of human resources and payroll data. In mid to large companies this usually comes down to a relatively small number of HR and payroll suppliers – SAP, PeopleSoft, Workday, ADP, Paychex, etc. A reasonably straight-forward cloud-based software product with serious security and pre-established interfaces to the major HR and payroll providers ought to be in demand. This software would access company data and provide the state mandated reporting. Gotta be cheaper than clerks.

    The best news is that every winter the members of the Imperial Clown Show tape red balls onto their noses and bells onto their toes and go to Richmond to “tweak” this mindless reporting regime. New, mandatory, cyclic upgrades to the software will be required with each session of the General Assembly affording the opportunity for a “pricing review” foist on increasingly dependent businesses. Of course, if successful, the new company will lobby and provide generous campaign contributions to the General Assembly members in order to point out areas of increased virtue signaling with the concomitant increase in complexity. Regulatory complexity is caviar to rent seekers and crony capitalists.

    Wow, I’m almost beginning to understand how Dominion executives must feel. But how do I get a regulated monopoly on this business along with all risks borne by the customers with all upside going into my pockets? You know, the Dominion model. Maybe I’ll see if Saslaw and Norment are willing to be board members (with pay, of course).

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