Proposed EEOC wage reporting rules could create major problems for Employers

NOW: companies with 100 or more employees have to file an annual federal EEO-1 report. This requires companies to report the number of employees by ten broadly-defined job categories, broken down by race, gender and ethnicity. 

 

PROPOSED RULE:  In addition to the current reporting rule, companies with 100 or more employees will ALSO have to report compensation data. The EEOC recently proposed that the report include aggregate W-2 data for each of the current ten job categories.  The pay data would be broken down into 12 pay bands established in the proposed regulations - for example, a Company must identify the total number of employees by race, gender, and ethnicity within each job category, whose annual W-2 income fits each pay band.  The proposed rule would be revised starting in September 2017. 

 

WHY: EEOC has 2 purposes:

1. By requiring employers to collect their own pay data into EEO-1 categories, this will encourage employers to check their companies to see if there is disparity in compensation among their workforce (based on gender, race, or ethnicity). And if so, it hopes to encourage the employer to consider corrective action. 

2. The EEOC also plans to analyze the compensation data to focus on wage discrimination investigations.  The EEOC will rely on the data collected as a basis to target companies for suspected pay discrimination. 

 

Please be sure to contact BridgehouseLaw before conducting an internal review, in order to increase the possibility to document the review and any results under attorney client privilege. 

 

The EEOC will accept comments on the proposed revisions up until April 1, 2016.  If you are interested to submit comments to the EEOC, please contact BridgehouseLaw to review how this proposed revision may affect your company.