A QuadWest Human Resources Blog
The wage gap for women and minorities has been a hot button issue for employers and human resources departments
for years. As more information and evidence comes to light, the federal government has scrambled to find ways to fairly address and close these gaps where they exist across the board.
Now, new changes have come down the pike from the Equal Employment Opportunity Commission designed to address these issues. These changes target employers who have at least 100 staff members. They involve annual EEO-1 reports that will now be required and which relate to pay and hours information.
EEO-1 Reporting: The Coming Changes
The new EEO reports will require issuing hours and salary information for the entire workforce of affected companies across the nation. This information will be tested and monitored, with the goal being to investigate the pay practices of companies who appear to have inexplicable disparities in pay.
These reports will be filed starting in the first quarter of 2018. Whereas normally EEO-1 reports are due in the fall, the new one must instead be filed by the end of March next year. Starting with this first filing, March 31 will be the new annual deadline, which is in some ways good news for employers. It means that companies will only need to pull pay data once every year, and can use it for both EEO-1 and tax purposes.
What This Means for Employers
This will have a significant impact on employers, who up until now have had no oversight when it comes to inequities in pay among their employees. Now, the EEOC and the Office of Federal Contract Compliance Programs will have detailed data regarding employee salaries and wages, which will allow them to directly target pay inequities.
This will, at the very least, increase the burden on employers for data collection and reporting, likely far beyond the levels estimated by the EEOC. It also has raised significant concerns regarding privacy and confidentiality, as the Commission has stated its intent to publish aggregated employer pay data.
The New Requirements
A number of new requirements have fallen on the shoulders of employers as a result of the regulations. These include the following action items:
- Engage in risk assessment involving EEO pay analysis – understand your pay data before you turn it over, and what it says about you. Act early to address inequities.
- Understand how attorney-client privilege affects your business. Any legal advice you receive based on statistical analysis is protected by attorney-client privilege, which is inviolable. Do not do these analyses informally without directly involving legal counsel.
- Create an efficient and reliable system in conjunction with IT services and payroll record suppliers to simplify the process of reporting it.
- Be aware if you’re required to file. If your company is just reaching the 100-employee threshold, do not forego reporting. The EEOC has filed lawsuits against employers for failing to file, and that’s an issue you don’t need.
External HR Consulting Solutions
If your company is facing uncertainty regarding the new EEO-1 reporting regulations, or would simply like to create a better, more efficient and streamlined HR department, QuadWest can help. We have many years in human resources training, leadership and outsourcing solutions. Give us a call for more information about how we can help you today.
Do you have a plan in place to collect and report wage data?