Payroll professionals should no longer be surprised by new laws and regulations that pile on pay system adjustments to account for one policy requirement or another. Payroll’s involvement in employer efforts to comply with the Affordable Care Act is just a recent example.
In addition to their regular role of ensuring that accurate payments to employees are made and taxes and other deductions are properly calculated and accounted for, payroll professionals have been called on to create more reports on wage amounts and hours worked to help implement economic-stimulus programs or a social programs.
In the case of the ACA, payroll systems needed adjusting to determine full-time employment, over specific periods, accrue and report on health-care coverage amounts and help prove that affordability levels of plans are met. In addition, some employers have saddled their payroll departments with the burden of filing the ACA forms this year through a newly created filing system.
Now the Equal Employment Opportunity Commission proposes to collect payroll data that would allow the agency to better assess whether pay equity between gender and race are adequately addressed by employers.
The agency seeks to require employers with at least 100 employees to provide Form W-2 data with their annual Employment Information Report, or EEO-1 Form. The agency expects to implement the requirement in the latter half of 2017.
The W-2 data the EEOC wants is not just a copy of the Form W-2, of course. That would be too simple. Under the plan, employers would be required to accumulate the W-2 amounts for a different time period to meet the EEO-1 requirements. These amounts would be reported by gender and across 12 pay bands, adding a myriad of variables to a reporting matrix.
But that’s not all.
The EEOC also wants employers to report the hours worked for each employee, although apparently hours for employees classified as FLSA exempt would not need to be reported. That’s a relief.
According to lawyers from Jackson Lewis P.C., the EEOC expects most employers to accomplish these additional reporting sets by upgrading pay and human resources software programs, with additional annual filing costs estimated at $160.
The comment period on the proposal is to end April 1.
Our Payroll Decision Support Network subscribers may access the Payroll Strategic White Paper, “EEOC Seeks Payroll’s Data to Close Wage Gaps,” which includes action steps recommended for employers to pursue.
Take a free trial to Bloomberg BNA’s Payroll Decision Support Network , your one-stop resource for reliable, up-to-date guidance and analysis in every area of payroll administration and compliance.
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