Posted on November 22, 2016

On November 9-10, Paycor hosted its ninth annual HR Web Summit featuring sessions on a variety of topics ranging from the Department of Labor, Form I-9 and EEO-1 Report changes to common trends within the HR industry. The article below highlights EEO-1 changes as compliance expert Katharine Weber explained how the new report will impact organizations.

The time is now to prepare for changes to the EEO-1 report, which affects all businesses that employ more than 100 workers, whether as one entity or in total under a central ownership structure. This report will now track in more detail all aspects of payment data, including a deeper dive into gender and race disparities that may occur. As helpful as this change will be, the tracking overhaul itself is a major undertaking. Employers should get ahead of these changes now, rather than scramble to catch up after it might be too late.

The new EEO-1 Report will change significantly and will now include:

  • W-2 earnings and hours worked for all employees

  • 12 separate pay bands (rates) established by the Equal Employment Opportunity Commission (EEOC) to categorize employment pay

  • 7 categories of gender and race/ethnicity

  • 10 EEO-1 job categories to slot each worker and their total hours worked (from executive/senior positions to service workers)

Changes in reporting will begin in 2017, with reporting information due March 31, 2018. This means your 2016 EEO-1 report will be the last filed in the current format. For 2017 reporting purposes, employers will count employees during a pay period between Oct. 1 and Dec. 31, but will have to report W-2 income and hours for the entire year. This W-2 information must be filed into each pay band, job category and race/gender category.

This report, when implemented, will go a long way to identifying pay disparities and the reasons they exist. It will be a roadmap to practices both good and bad, and can take a deeper dive into data and trends, recognizing areas of opportunity and possible remedies. This should be a welcome resource for companies wanting to ensure fair practices are displayed openly and honestly.

Employers can get out ahead of this report by recognizing disparities themselves. Conduct self-audits of HR data now, analyzing salary data and other relevant information, not only to recognize disparities but to also have the opportunity to explain them if needed. There are plenty of instances of justified disparity, and hard data can prove as much.

Other improvements can be discussed as well.
* Are bonuses a better way to reward employees, rather than raises that may seem arbitrary?
* Updates and detailed clarifications should be implemented to all new hire and handbook materials, ensuring upfront policy expectations.
* Clearly define job descriptions to avoid confusion on what defines success. Also, include legal counsel in all aspects of this process, including pay analysis and adjustments. The more attorney-client privilege you can assert (mark ‘privileged and confidential’ in all relevant documents), the better defended you’ll be against unmerited claims.

To listen in to the entire recorded webinar on preparing for the changes, click here, and be sure to check out a full list of Paycor’s upcoming Coffee Break webinar topics to stay current on regulations and industry trends.

This content is for educational purposes only and is not intended to serve as legal advice.

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