Additional EEOC Compensation Reporting May Be Required in 2017

March 1, 2016|Kailee Wahler

“Equal pay for equal work” is a phrase we have heard routinely the past several years, yet it still remains a hot topic. Do men truly make more money than women in similar roles? Does race drive dissimilar wages for similar work? Is pay inequity a factor of education, experience and proficiency in role or are gender, race and ethnicity the driving forces? Is a lack of accurate pay practices causing some unknown pay issues?

To better understand these questions and pay data, the Equal Employment Opportunity Commission (EEOC) has proposed revisions to the current annual Employer Information Report (EEO-1), which would require additional compensation reporting. Employers with 100 or more employees, including federal contractors, would be subject to this reporting starting in September 2017. This data will allow the EEOC and the Office of Federal Contract Compliance Programs (OFCCP) to better understand the potential pay gaps across industries and occupations and better enforce pay discrimination laws.

What data would you have to provide and how would the EEOC and OFCCP use this info?

If the proposed EEO-1 revisions are approved, employers would look at employees’ W-2 earnings for a 12-month lookback period between July 1 and September 30. Then, you would break down the data by:

  1. the current EEO-1 job categories,
  2. the current definitions of sex, race and ethnicity,
  3. and one of the 12 specified pay bands.

The 12 pay bands used by the Bureau of Labor Statistics in the Occupation Employment Statistics survey would be used for this reporting. You would also report hours worked to take into account part-time and partial-year employment.

The EEOC and OFCCP believe these pay bands would produce reliable, aggregated data to support meaningful statistical analysis. This reporting will allow the EEOC and OFCCP to better understand the severity and scope of pay gaps not only at the employer level, but also at the occupational and industry level. They can then focus enforcement of resources on employers and groups that are more likely out of compliance with federal law.

What should you do now?

If you have 100+ employees, assess your compensation programs from a discrimination perspective. A thorough review will give you time to identify any potential issues, create a strategic plan and address the issues before the first collection of compensation data on September 30, 2017. This initial review could save you the headache, time and energy of responding to the EEOC or OFCCP in the future.

You should also be ready to invest additional time and resources to collect this compensation data and plan accordingly.

Employers are also encouraged to exercise their rights to provide comments on this proposal by March 31, 2016. You can comment on the proposal online, via mail, through employer or industry associations or through legal counsel. 

We understand that change can be overwhelming, so please reach out to our HR Consulting team for help. Schenck can guide you through this process and offer recommendations along the way. Contact Kailee Wahler, human resources consultant, or any member of Schenck’s Human Resources Consulting team at 800-236-2246 to get started.

Kailee Wahler, human resources consultant with Schenck, builds relationships with clients and advises businesses on a wide variety of human resources matters. She provides one-on-one guidance and counsel, along with the ability to analyze and offer solutions to everyday HR challenges.