Burdensome Pay Data Reporting Rule Proposed

bullard-law2By Bullard Law,
Portland law firm

By Michael G. McClory

Get ready to grumble.  The EEOC and OFCCP jointly announced plans to substantially increase the data reporting burdens on employers associated with the annual EEO-1 Report.

All covered private employers must file an EEO-1 Report every September. Currently, the report provides a demographic picture of an employer’s workforce. In summary fashion, an employer provides a count of employees by ethnicity, race and gender in each of ten job categories.

EEOC and OFCCP propose to add a pay data reporting component to the EEO-1 Report. According to EEOC’s press release, “This proposal would add aggregate data on pay ranges and hours worked to the information collected, beginning with the September 2017 report.” Further, the agency states that the pay data will provide EEOC and OFCCP “with insight into pay disparities across industries and occupations and strengthen federal efforts to combat discrimination. This pay data would allow EEOC to compile and publish aggregated data that will help employers in conducting their own analysis of their pay practices to facilitate voluntary compliance. The agencies would use this pay data to assess complaints of discrimination, focus agency investigations, and identify existing pay disparities that may warrant further examination.” The joint proposal will be published in the February 1, 2016 Federal Register; in the meantime it is available for review on the OFCCP website.

According to a Question and Answers page on the EEOC website, the revised EEO-1 Report will require employers to report total W-2 earnings for employees for a 12-month period of time and to indicate the number of employees in each job category (there are ten) who fall into each of 12 pay bands. EEOC asserts that “W-2 earnings are useful for assessing pay discrimination because they include not only wages and salaries, but also other compensation such as commissions, tips, taxable fringe benefits, and bonuses.”

As noted above, EEOC intends to compile and publish aggregated data. In August 2014 The Bullard Edge had the following to say regarding a similar OFCCP proposal.

“Reading between the lines of this passage, The Bullard Edge believes that the publication of summary industry information will lead to more wage claims being pursued by individuals. Summary industry information would minimize considerations related to merit (such as training, experience, and performance) and related to the circumstances of individual employers. Nevertheless, individuals are likely bring pay discrimination claims asserting that their individual pay is below industry standards and attributing that difference to considerations of race, ethnicity, or gender. We foresee that this data might also be used to support claims against non-contractors.”

The joint proposal will be open to public comment through April 1, 2016. It is anticipated that sometime after that the agencies will publish a final rule. The Bullard Edge will continue to monitor developments.

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