The business world shook when EEO-1 pay data reporting was reinstated by a federal district court in Washington, D.C. earlier this year. Employers with 100 or more employees now have until September 30, 2019, to file wages-paid and hours-worked data for 2017 and 2018, respectively, in addition to other employee demographic data (known collectively as “Component 2”). This is a hard deadline—the Equal Employment Opportunity Commission (EEOC) online portal will be closed to employers following that date. Despite the compliance logistics of the pressing deadline, employers should also beware that pay data reporting is not going away.
We recently hosted a webinar concerning EEO-1 Component 2 filing. This presentation and accompanying resources address the nuts and bolts of 1) compiling your data correctly, 2) consolidating it to prevent validation errors with the EEOC online portal, and 3) steps employers can take to prepare before the deadline. Experts from across the legal, accounting, human capital, and human resources industries recommend a pay equity audit to accurately understand your compensation structure and its hidden risks.
Pay data reporting is a growing trend both abroad and at home. Internationally, in the U.K., the Equality Act of 2010 requires public and private employers with 250 or more employees to publish the following data:
Their mean gender pay gap
Their median gender pay gap
Their mean bonus gender pay gap
Their median bonus gender pay gap
The proportion of men in the organization receiving a bonus payment
The proportion of women the organization receiving a bonus payment
The proportion of men and women in each quartile pay band
This data is publicly available and searchable. One critical idea underlying the pay data reporting obligations in the UK is that transparency serves to debias systems that maintain or perpetuate the gender pay gap. This idea has caught on in other countries as well.
In France, organizations with 50 or more employees must assess their compensation using an evaluation method that equates points with progress toward reducing the gender pay gap. These point “scores” must be public-facing on companies’ websites. In Spain, employers with 50 or more employees must develop and release equality plans which include pay equity audits.
At home in the U.S., states such as California and New Jersey are experimenting with pay data reporting that is supplemental to the EEO-1 Component 2 requirements. In California, SB 171 recently passed the Senate. It would require private employers with 100 or more employees to submit an “Employer Information Report” containing wages and hours-worked data to the Department of Fair Employment and Housing. Employers could submit their EEO-1 Component 2 reports to satisfy this burden. In New Jersey, the Diane B. Allen Equal Pay Act is currently enforced and requires employers with public contracts to submit pay data reports to the Department of Labor and Workforce Development.
As is clear from the many forms of government adopting pay data reporting requirements, this trend is here to stay. Employers should continue to monitor pay data reporting in their jurisdictions and adopt practices and procedures to prepare for new developments.