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Sept. 29 — The Equal Employment Opportunity Commission finalized a revised reporting form that will require many employers to submit summary compensation data categorized by gender, race and ethnicity as a way to combat pay discrimination.
EEOC Chair Jenny Yang (D) said revision of the employer information report (EEO-1) to include the pay data will help employers as well as government investigators and employees.
“With better understanding of what employees are paid, we can move closer to pay equality,” Yang said Sept. 29 during a White House conference call.
Representatives of women’s rights groups applauded the EEOC’s move, saying it will help unearth pay disparities and allow better, targeted enforcement of equal pay and anti-discrimination laws.
Women working full time currently earn 80 cents for each dollar earned by men, and black and Hispanic women earn even less, according to a White House fact sheet.
Business representatives, however, said the burdensome new reporting requirements won’t yield any useful information about alleged sex or race discrimination in pay.
The revised EEO-1 form requires employers and federal contractors with 100 or more employees to begin submitting their summary pay data based on W-2 wage information for the 2017 calendar year, with the new EEO-1 reports due March 31, 2018.
Covered employers will have to report the hours worked by employees in the 10 job categories divided by 12 pay bands.
The EEOC In January introduced its original proposal to revise the EEO-1, an annual report covered employers have submitted to the agency for the past 50 years.
The commission got feedback at a March hearing and in a 60-day comment period that ended April 1. The EEOC in July submitted its revised proposal to the OMB for review under the Paperwork Reduction Act.
The five-member commission voted 3-2 to approve the new EEO-1 form with the pay data reporting tool, the agency spokeswoman said. Commissioners Victoria Lipnic and Constance Barker, both Republicans, voted against the EEO-1 revision.
Following a 30-day comment period that ended Aug. 15, the OMB cleared the EEOC’s changes to the EEO-1 form.
Representatives of women’s rights groups said the pay reporting requirements will help move the needle toward achieving pay equity.
“This increased transparency will be tremendously helpful for the federal government and employers as they seek to better detect discriminatory pay practices while strengthening enforcement of equal pay laws,” Debra L. Ness, president of the National Partnership for Women & Families, said in a Sept. 29 statement.
Summary pay data alone won’t allow the EEOC to decide if an employer is unlawfully discriminating based on sex, race or ethnicity, said Emily Martin, general counsel and vice president for workplace justice at the National Women’s Law Center in Washington.
But the data will permit the EEOC to discern pay “patterns” for an employer, an industry or a geographic region, Martin told Bloomberg BNA Sept. 29.
The EEOC and Labor Department, armed with the pay data, can see if an employer is an “outlier” that warrants enhanced scrutiny of its compensation practices, Martin said.
The revised EEO-1 form also will encourage employers to take closer looks at their own pay practices, Martin said. They then might discover and fix sex- or race-based pay disparities without the need for government intervention, she said.
The new form will allow the EEOC and Labor Department to “target appropriately” employers whose data raise flags on pay, Martin said.
“Discrimination remains a persistent barrier to working families’ ability to get ahead,” and the new EEO-1 form “brings us closer to addressing these disparities,” said Rep. Bobby Scott (D-Va.), the ranking Democrat on the House Education and the Workforce Committee.
“I applaud the EEOC for taking necessary steps to secure pay data information in the effort to guarantee equal pay for equal work,” Scott said in a Sept. 29 statement.
But congressional Republicans and business representatives said the EEOC is imposing onerous burdens on employers that serve no useful purpose.
Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-Tenn.) earlier this year introduced legislation to block what he calls the EEOC’s “time-wasting” pay data collection plan.
In a Sept. 29 statement, House Education and the Workforce Chairman John Kline (R-Minn.) and subcommittee Chairman Tim Walberg (R-Mich.) said that despite a sluggish economy, the Obama administration is “bombarding employers” with “more partisan rules and regulations.”
The EEOC will collect extensive pay information “without any developed framework to review the data” or use it “for any legally authorized or recognized purpose” in the “irrational hope” it will support the agency’s mission, the U.S. Chamber of Commerce said Sept. 29.
“EEOC’s massive data grab has nothing to do with compensation discrimination, will prevent a cogent analysis of pay practices and add absolutely nothing to this policy debate,” Randy Johnson, the Chamber’s senior vice president of labor, immigration and employee benefits, said in the group’s statement.
The Chamber is “considering all options” in response to the new EEO-1 form and “will review this with our members,” a Chamber spokesman said Sept. 29.
Other employer representatives expressed disappointment the EEOC largely failed to modify its EEO-1 revision to address practical problems it poses for businesses.
The agency did push back the first EEO-1 pay reporting date to March 2018, which allows covered employers to use the same calendar-year W-2 wage information they already compile for tax purposes.
But the EEOC didn’t respond to employer concerns that it’s asking for information typically kept in at least two or three different internal information systems, said David Goldstein, a management lawyer with Littler Mendelson in Minneapolis.
An employer’s costs in merging data from separate payroll, human resources and timekeeping systems will be enormous, Goldstein told Bloomberg BNA Sept. 29.
Contrary to the EEOC’s assumption, there’s not necessarily a “one-time fix” that would allow employers to reduce those costs, Goldstein said.
Employers also are disappointed the EEOC didn’t follow the recommendations of a 2012 National Academy of Sciences report that said the agency should develop a plan for using employer pay data before it announced a collection tool, Goldstein said.
“There is no plan” for agency use of the data, Goldstein said. The EEOC is hoping “to come up with one after the fact,” he said. “It’s not encouraging.”
Despite the problems, Goldstein said he saw as unlikely any employer-generated court action to block the revised EEO-1 form.
Given the extensive current litigation over various DOL rules, there’s little “energy and resources” left over to fight the EEOC in court too, he said.
Employers are hoping the new EEO-1 form just “eventually goes away,” Goldstein said,
That’s what happened with the Equal Opportunity survey, a federal contractor pay data collection initiative approved during the Clinton administration and used by the DOL from 2000 to 2004.
The Labor Department dropped the EO survey because it didn’t produce any useful information, said Michael Eastman, senior counsel and vice president for public policy at the Equal Employment Advisory Council, an employer association in Washington.
The new EEO-1 form could meet the same fate because the information the EEOC plans to collect also has limited utility in illuminating pay discrimination issues, Eastman told Bloomberg BNA Sept. 29.
But the Labor Department during the George W. Bush administration wasn’t really interested in learning about or eliminating sex and race bias in compensation, said Martin of the National Women’s Law Center,
The “short answer” is that the EO survey was “set up to fail” by “the powers that were at that time,” Martin said.
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Text of the new EEO-1 form is available at http://src.bna.com/i1A.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
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