Should US Employers Still Prepare to Comply with EEOC Pay Data Reporting?

Should US Employers Still Prepare to Comply with EEOC Pay Data Reporting?

Last year, the US Equal Employment Opportunity Commission adopted a rule proposed by then-President Barack Obama that would require organizations with more than 100 employees to submit summary pay data to the commission each year as part of their EEO-1 reports, showing what employees of each gender, race, and ethnicity earn. The rule, which is scheduled to go into effect in March 2018, is intended to help the EEOC identify pay gaps between men and women and among employees of different races, but opponents have called it overly burdensome and invasive and cast doubt on whether it will actually help close those gaps.

The election of President Donald Trump last November, however, meant that this and other employment-related policies created by the Obama administration were likely to be reversed. Trump has nominated two Republicans to the EEOC, who if confirmed are expected to join acting chair Victoria Lipnic in withdrawing the pay reporting requirement. Republicans in Congress are also working to prevent the agency from implementing the requirement. For these reasons, Allen Smith explains at SHRM, many employers are unsure whether to prepare to comply with a regulation that might very well be overturned:

However, Connie Bertram, an attorney with Proskauer in Washington, D.C., said, “While we await the passage of the final 2018 appropriations bill, employers should continue to operate under the assumption that the revised Form EEO-1 will be implemented as planned. This is particularly true in light of EEOC’s silence on the revised Form EEO-1.” …

Employers were originally in wait-and-see mode but increasingly are leaning toward starting to make preparations to comply, [David Goldstein, an attorney with Littler in Minneapolis] said. Some clients of his are doing trial runs of filling out the new forms based on 2016 data and working out any issues in their HRIS, he noted, calling this the “most conservative approach.”

Others tell Smith that while employers should be prepared to take steps toward compliance if it looks like the rule will come into force after all, it looks likely to be reversed, so employers who are able to make those preparations quickly can afford to wait and see in the meantime:

“How long employers can go without making specific, concrete preparations will depend on the employer,” said Bill Osterndorf, president, HR Analytical Services in Hales Corners, Wis. “Larger employers with multiple pay systems and complex workforces may need to begin developing and testing reports months before the 2018 EEO-1 report must be filed. Employers with sophisticated reporting systems and extensive IT support, as well as employers with a relatively small number of employees and relatively simple compensation structures, may be able to wait until the end of the year before preparation on filing the revised EEO-1 report.”