The EEOC’s revised pay rule expands collection of pay and hours-worked data from employers filing EEO-1 reports. The proposed rule requires employers, including federal contractors, with 100 or more employees to report summary W-2 income by sex, race, ethnicity, and job group. The proposed rule is the EEOC’s most recent tool focusing on discriminatory pay practices.
Here’s what you need to know:
1. Time for Compliance.
Once the new rule takes effect, you will have an additional 6 months to submit your company’s EEO-1 survey. The proposed rule moves the due date for the EEO-1 survey from September 30, 2017, to March 31, 2018. This time shift allows employers to use existing W-2 reports for pay data and gives employers an opportunity to closely review (and potentially correct) current pay data.
Use this extra time wisely. Analyze employee pay disparities, gaps, and differences, and determine whether you can explain any disparities by legitimate job-related factors. Conduct a system-wide audit of your company’s pay data and fix any potential issues before submission to the EEOC. You shouldn’t turn over data to the EEOC until you know what you’re dealing with (and the types of claims your company may ultimately face).
2. Changes in the Workforce Snapshot.
The “workforce snapshot”—the pay period during which employers count the total number of employees for that year’s EEO–1 report—will be October 1 through December 31 of the reporting year (compared to the current rule using a July 1 through September 30 workforce snapshot). This means that employers will count employees (for purposes of the EEO-1 report) during a pay period between October 1 and December 31, and will report W-2 income and hours-worked data for those employees for the entire year ending December 31.
3. Reports by Job Category.
The proposed rule requires pay data to be reported by job category. This is new and much more specific than the current rule. Because of this new requirement, employers must be diligent in keeping accurate pay data records by job category and classification, as well as making sure that the people in a job category are actually doing the work of that job category. If someone’s duties change, make sure to change their job title and put them in the proper category. Keep this in mind as you conduct an audit to assess potential pay discrepancies.
4. Hours-Worked Data.
The proposed rule also adds a requirement to report hours worked by employees. For nonexempt employees, the EEOC adopts the definition of hours worked as set forth in the Fair Labor Standards Act: “(a) [a]ll time during which an employee is required to be on duty or on the employer’s premises or at a prescribed workplace and (b) all time during which an employee is suffered or permitted to work whether or not he is required to do so.” 29 C.F.R. 778.223. For exempt employees, however, employers can report either: (1) 40 hours per week for full-time workers, and 20 hours per week for part-time workers, multiplied by the number of weeks employed that year; or (2) actual hours-worked data that the employer already keeps.
The comment period on the new proposed rule closes August 15, 2016. Although it’s unlikely the final rule will change substantially from the present version, keep apprised of any changes that may affect the final rule. Once implemented, the EEOC will post notice of the rule’s approval on its website at www.eeoc.gov.