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EEOC Proposes Employers Provide 2018 Pay Data by September

On April 3, 2019, the Equal Employment Opportunity Commission (EEOC) announced its proposal to require employers to submit pay data in their EEO-1 reports by Sept. 30, 2019.

Employers with 100 or more employees are currently required to submit annual EEO-1 reports disclosing their number of employees by:

  • Job category
  • Race
  • Sex
  • Ethnicity

The current deadline for employers to submit these reports is May 31, 2019.

However, employers now may also be required to submit 2018 pay data by Sept. 30, which would include pay data from a single payroll period – of the employer’s choosing – between Oct. 1 and Dec. 31, 2018.  

The EEOC announced in 2016 that it would require employers to include pay data in their EEO-1 reports to identify pay gaps and investigate pay discrimination practices. The Office of Management and Budget (OMB) implemented a stay of the revised EEO-1 report, halting the EEOC’s pay data reporting requirements. The National Women’s Law Center and the Labor Council for Latin American Advancement challenged the stay, and on March 4, 2019, a federal court judge in Washington, D.C., agreed, reinstating the pay data requirement.

During an April 3, 2019 hearing, the EEOC informed the court how it proposed to collect the pay data under the revised EEO-1 ruling. The EEOC stated that it would need to hire a data and analytics contractor to modify its data collection capabilities, which would cost “in excess of $3 million.” The EEOC also proposed the Sept. 30 deadline for employers to collect and submit retroactive 2018 pay data.

Employers should be cognizant of this important development and promptly collaborate with human resources, payroll and management personnel to enable them to successfully meet the EEOC’s requirements and applicable deadlines. To best prepare their workplaces to address any future action by the EEOC as a result of the pay data collection mandate, employers can partner with outside counsel to take the following 10 steps:

  1. Review any references to compensation in employee handbooks and revise any blanket prohibitions on employees disclosing their compensation to others.
  2. Remind supervisors of employees’ limited right to ask their co-workers about compensation.
  3. Train compensation decision-makers on equal pay law requirements, any compensation policies including revisions to the same, strategies and procedures for ensuring proper documentation of decision-making relative to compensation decisions, and the EEOC’s new pay data mandate.
  4. Review job descriptions and current salaries to reflect actual jobs being performed and properly differentiate between jobs (e.g., avoid similar titles for people doing completely different work).
  5. Establish salary ranges for each job classification.
    • Make clear that any exceptions should be limited to certain enumerated factors and percentages (e.g., skill set, licenses or degrees which demonstrably add value, market constraints such as geography, and difficulty in filling a position).
    • Ensure hard data justifies any deviation from the salary ranges (e.g., applications received and/or offers rejected).
    • Provide guidelines to minimize pay negotiations and require careful documentation of any salary negotiations so as not to punish protected groups that generally tend not to negotiate compensation.
    • Avoid using years of experience alone as a benchmark, unless you can show it adds significant value, as learning curves generally flatten out after a number of years.
    • Avoid using tenure or seniority alone as a reason for pay.
    • Value similar work similarly – particularly for non-production jobs.
    • Be careful with discretionary bonuses.
  6. Monitor promotions and raises to ensure they are bias-free.
  7. Review overtime and shift arrangements to ensure equity.
  8. Ensure telecommuters, part-time and flex-time employees are receiving equal access and opportunity.
  9. Monitor compliance by conducting regular (privileged) pay audits tied to compensation increases as well as to determine potential problems.
  10. Identify, implement and document appropriate solutions if your pay audit reveals concerns.

Employers that take action now to ensure their workplaces are protected against equal pay claims will be best situated to respond to any EEOC inquiry resulting from the pay data mandate. If the task seems overwhelming, outside counsel can help guide this process to minimize disruption to your business while elevating your workplace’s pay equity practices.

© 2019 BARNES & THORNBURG LLP

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About this Author

Associate

Kelsey J. Schmidt is an associate in the Chicago office of Barnes & Thornburg, where she is a member of the firm’s Labor and Employment Department. She defends employers against claims of discrimination, retaliation, harassment, and wage and hour violations in federal and state court and before the Equal Employment Opportunity Commission, the Illinois Department of Human Rights and the Illinois Department of Labor. 

312-214-4589
Gray Mateo Harris Attorney
Partner

As a native Spanish speaker from the Dominican Republic, she has a passion for providing Spanish language representation to clients. This involves working with Spanish language witnesses and documents, including document review, depositions, mediations, administrative proceedings, internal investigations and employment and other training.

Gray has extensive experience defending employers in litigation at both the state and federal court levels through trial and appeal, and has defended employers in restrictive covenant, contract- and tort-based actions and in claims arising out of state statutes, such as the Illinois Human Rights Act, the Illinois Minimum Wage Law, the Illinois Wage Payment and Collection Act and the Illinois Educational Labor Relations Act. On the federal level, she handles cases involving the Family and Medical Leave Act, Equal Pay Act, Americans with Disabilities Act, Age Discrimination in Employment Act, Title VII of the Civil Rights Act and the Fair Labor Standards Act. She routinely represents clients before the Equal Employment Opportunity Commission, the Illinois Department of Human Rights, the Illinois Department of Labor and the National Labor Relations Board.

Gray counsels clients on virtually all stages of the employment relationship, including drafting offer letters and negotiating employment, restrictive covenant, severance and separation agreements, as well as drafting and implementing critical workplace policies and procedures, conducting employee and management training, and strategically advising on workforce restructuring and union avoidance issues.

Advising and representing employers with respect to traditional labor matters represents a significant portion of Gray's practice, as she routinely advises clients on union organizing issues, election proceedings, collective bargaining, grievance and contract arbitrations, labor due diligence reviews, and unfair labor practice and other proceedings before the NLRB.

Deeply involved in the community, Gray has provided pro bono representation to several nonprofit organizations on employment matters, and has represented indigent clients as part of the Circuit Court of Cook County Domestic Violence Clinic and the Northern District of Illinois Judicial Settlement Assistance Program. Gray is actively involved with the Illinois Hispanic Chamber of Commerce, the Hispanic Lawyers Association of Illinois, the Black Women Lawyers Association and the American Bar Association. She co-chairs the Diversity and Inclusion Committee of the Women's Coalition.

She also serves as a mentor to students interested in the legal profession through involvement with the University of Illinois College of Law. Gray is a hearing officer and board member for the Cook County Sheriff's Merit Board, presiding over disciplinary matters as well as candidate certification and promotional interviews. She previously served as board member and co-chair of the personnel committee for Rape Victim Advocates, the largest rape crisis center in Illinois. She has also served on the associate board of The Chicago Committee, a nonprofit group whose mission is to advance minority attorneys in law firms.

Gray has been named to the Illinois Super Lawyers Rising Stars (2016-17) and as a Leading Lawyers Emerging Lawyer in 2017. She has also been featured in various segments by Univision television and Hispanic Executive Magazine.

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