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3 reasons employers should prepare to report wage data to EEOC

The Equal Employment Opportunity Commission (EEOC) was all but set to collect a new EEO-1 report for the 2017 reporting season as part of its continuing effort to combat wage discrimination. That’s no longer the case.

The EEO-1 form, a two-page document that employers with at least 100 employees are required to file with the EEOC, includes a detailed breakdown of the race, gender, and ethnicity of an organization’s employees. The Obama administration proposed revisions to the report to include additional information such as job title and description, number of hours worked, and pay based on set wage ranges. However, those plans were scrapped once the new administration took office.

The decision to nix expanding the EEO-1 form was a relief for employers, many of which were already opposed to the change. Yet, as it turns out, that feeling of “relief” might be short-lived. Let us explain.

The ‘messaging’ from the EEOC speaks volumes

After the Office of Management and Budget (OMB) informed the EEOC that it would be postponing the additional requirements on the EEO-1 form, Acting EEOC Chair Victoria A. Lipnic said: “The EEOC remains committed to strong enforcement of our federal equal pay laws, a position I have long advocated. Today's decision will not alter EEOC's enforcement efforts.”

The pay data collection rules may have been rolled back, but they weren’t completely discarded. They were merely postponed. In fact, President Trump’s nominees, Janet Dhillon and Daniel Gade, made clear during their confirmation hearings back in September 2017 that both were in support of employee compensation data collection and were committed to replacing the pay reporting requirements.

The EEOC is planning to do a study on the burden these additional requirements will have on employers to better assess the impact. If anything, it’s clear that while these new rules were put on hold, they were certainly not eliminated forever.

Pay equality is a hot-button issue

Pay equality has always been an important issue, but it’s reached the forefront of the national conversation. A lot of powerful people across industries have been clamoring for something to be done to ensure equal pay for equal work.

Celebrities are using their huge platforms to make noise and move the discussion forward. Actors and actresses from Oprah to Jennifer Lawrence to Bradley Cooper to Sandra Bullock have spoken out about the need for equal pay. Benedict Cumberbatch has also refused to work on projects that don’t have equal pay for his female co-stars. 

Companies like Salesforce, Starbucks, and Apple, among others, are taking action and have even recently reached full pay parity. To do so, they’ve opted to track and audit payroll data on their own, gaining valuable insight into their own wage practices and modifying them when necessary to confront inequality. Pay discrimination is a growing cultural issue, and more and more people are beginning to talk about it. It’s finally being recognized as a major problem and is something the EEOC will feel more pressure to address.

More data is in the EEOC’s best interest

As part of its mission, the EEOC strives to tackle workplace imbalance. As a result, it’s in the organization’s best interest to capture more and more data. Why? Because having as much data as possible gives the EEOC the best chance to accomplish its overarching goal: identifying, addressing, and eliminating workplace discrimination.

The more data the EEOC has, the more insight it can gain into workplace equality – or lack thereof. Simply put, the pay data collection would make it easier for the EEOC to determine if discriminatory actions are taking place.

What you need to consider moving forward

Some employers, even if they’re not discriminating, have no desire to report this wage data. For them, it’s just another burdensome and complicated compliance regulation. Other organizations are discriminating against employees, and they definitely don’t want a spotlight on their data.

There will always be resistance, but that doesn’t mean the EEOC won’t start collecting more comprehensive data. Either way, the workforce snapshot (used to complete the EEO-1 report) started on October 1, 2018, and the deadline for reporting is March 31, 2019. The soonest a new EEO-1 report could be rolled out is the 2019 reporting season.

That being said, there’s clear indications this issue is far from over.

The most proactive employers are already capturing and isolating data in order to do their own self-assessments. They’re committed to finding discrepancies and doing something about it. Although it’s not required at the moment, others would be smart to follow their lead.