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2017 EEO-1 Report: Addressing pay discrimination with new regulations

Pay discrimination in the workplace is something that no one is in favor of—yet it’s a persistent problem throughout the country. Breakdowns based on race and gender show that a wage gap exists, despite the consensus that everyone doing equal work should be paid equally, regardless of race, ethnicity, or gender.

That’s where the Equal Employment Opportunity Commission (EEOC) steps in. This government division aims to address these workplace imbalances—and this year, it’s collecting more data than ever using the new EEO-1 report, which has more than doubled in length for the 2017 reporting season.

In the past, the EEO-1 requirement was simply a two-page document detailing an organization’s race, gender, and ethnic breakdown so the EEOC could track the company’s demographics and see if discrimination is occurring. This year, the document will be expanded to eight pages, pulling information from payroll, employers, and employees, and documenting pay rates and hours worked, to get a true and comprehensive picture of what pay discrimination in the workplace might look like.

While this regulation is a step in the right direction, it means more confusion for employers—with high price tags if reporting goes wrong.

More pages, more complexity

The new EEO-1 report documents several different factors: an employee’s race, gender, number of hours worked, job title and description, and pay. These data points will then be compared to others within the company to make sure pay and hiring practices remain consistent throughout—those with the same job titles, performance, workload, and credentials should be earning the same, regardless of their gender and race.

This data can then be used on two levels: by employers, to help combat pay discrimination that may have otherwise gone unnoticed and help them to develop better practices; and by the federal government, which can use it to better enforce anti-discrimination laws.

To ensure the process is as fair and accurate as possible, employees will self-report certain criteria, including their race and gender. Employers will pull wage information, hourly data from payroll or similar sources, and benefits data from the appropriate sources. They will also be responsible for reporting employee positions, based on 10 categories pulled from the EEO-1 form (such as executive/senior level officials and managers, professionals, sales workers, and others), as well as the pay bands employees fall into, based the earnings marked on their W-2s.

The process can be tedious, time consuming, and confusing, due to the nature and process of collecting data from so many different sources. But not all organizations will be affected: The new reporting requirements will apply to public employers with 100 employees or more, and federal contractors with 50 employees or more.

Big controversy, big penalties

Pay discrimination is serious business, and should be taken as such. Because of its importance, there are serious penalties at play for those who fail to report or those who report false information. These include steep fines, as well as prison time in some instances. Make sure you’re prepared for whatever EEO-1 throws at you, and are ready to prove yourself if audited.

The best way to do this is by leveraging technology. Pay discrimination is a complicated subject, and so it makes sense that its reporting would also be complicated. By using payroll technologies, specialized HR tools, and intelligent solutions designed to deal with the specifics of EEO-1, you can make sure you’re prepared if the EEOC comes to you with questions.

It’s the unfortunate truth that, despite EEO-1’s importance, the regulation itself will likely be tedious and difficult to complete. Do your best to collect data ahead of time and prepare for what comes next.