The Equal Employment Opportunity Commission is proposing changes in how they collect data about employees' pay on the Employer Information Report EEO-1 report. For those who do not know, an EEO-1 report requires company employment data to be classified by race/ethnicity, gender and job category. Keep in mind that the proposal is requiring this data in addition to the demographic information already provided on the form.
The proposed changes will apply to employers with 100 or more employees starting in 2017. The revisions on the table would build on the prevailing reporting configuration, while also placing employees into 12 specified pay bands. Simply, employers would need to classify the number of employees reported in each pay band based on the W-2 wages paid to employees for a 12-month period looking back from a pay period picked by the employer between July 1 and Sept. 30 of the reporting year. The commission hopes this addition will help identify pay discrimination.
As a CEO of a national midsize company, I find the proposal as another way for the government, specifically the EEOC, to hinder small to mid-size employer growth with the overburden of administration and filings. I appreciate that the EEOC believes such proposed enhancements will help employers evaluate their own pay practices to prevent pay discrimination in their workplaces, however I don’t see it that way. The proposed revisions will result in confusion on the part of the employer, unnecessary administration, and based on historical experience with the government’s processing ability, will ultimately result in unnecessary fees and penalties for the employer. Human resource departments will need to re-train benefits and compensation staff and make changes to their internal HR administration systems to administer such data. Further, the new filing requirements would result in certain employers being besieged for extensive pay audits and class claims based on fiscal dynamics that have nothing to do with pay discrimination.
What is frustrating in this economic climate is that small to mid-size companies in our great nation are the largest source of employment. Yet, the government has failed to recognize this by overburdening employers with administration, filings and statutes that make it difficult to start, build and grow businesses. This new proposal is evident of that.
Anyone who wants to comment on the proposal has 60 days after its publication, the deadline for which is April 1, 2016. The EEOC will then hold a public hearing regarding it, although details have not yet been announced. For employers who are against the changes, now is a good time to apply pressure, as the amendment is still only in the proposal stage.
Published (and copyrighted) in South Jersey Biz, Volume 6, Issue 3 (March, 2016).
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