(Reuters) - A U.S. judge has revived an Obama-era rule that requires larger companies to report workers’ pay data broken down by gender and race, which business groups have said would be burdensome and would not address pay discrimination as intended.
U.S. District Judge Tanya Chutkan in Washington D.C. late on Monday said the White House Office of Management & Budget (OMB) failed to explain what was wrong with the rule when it blocked it from taking effect in 2017, and ordered the agency to put the requirements back in place.
The National Women’s Law Center (NWLC), which sued in 2017 to revive the rule, said Chutkan’s decision affects more than 60,000 companies that collectively employ 63 million workers.
The White House and the U.S. Department of Justice did not respond to requests for comment. The government can appeal the decision.
For decades, the U.S. Equal Employment Opportunity Commission has required companies with 100 or more employees to annually report job titles of their workers broken down by sex and race. The agency expanded the requirement in 2016 to include pay data, saying the information was necessary to identify and combat wage gaps caused by discrimination.
OMB, which reviews agency rules before they take effect, approved the rule at the time but blocked it a year later after Donald Trump became president.
The U.S. Chamber of Commerce, the nation’s largest business lobby, and other trade groups have said the rule would be costly to businesses, and that pay data without more context is meaningless.
Posting the information publicly would invite lawsuits and comparisons of employees in different jobs and with varying qualifications, they said.
Federal law allows OMB to block a regulation it has previously approved “for good cause.” In its lawsuit, the NWLC said the Trump administration failed to show any cause for blocking the pay data rule after the EEOC spent six years putting it together.
The EEOC in adopting the rule said it would take employers a few additional hours each year to gather the data, at a total cost of about $50 million. The Chamber of Commerce in 2017 said the cost would be closer to $400 million, and OMB agreed that the Obama administration’s estimates had been too low.
Chutkan on Monday said OMB did not take the proper steps under federal law to block the reporting rule, and that its decision was “arbitrary and capricious.”
The case is National Women’s Law Center v. Office of Management and Budget, U.S. District Court for the District of Columbia, No. 1:17-cv-2458.
Reporting by Daniel Wiessner in Albany, New York, Editing by Alexia Garamfalvi and Bill Berkrot