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EEOC Proposes Mandatory Collection of Pay Data

By: Paul Finkle, CMC, SPHR – President & CEO/Principal

The Equal Employment Opportunity Commission (EEOC) recently announced plans to require employers with 100 or more workers (anyone subject to EEO-1 reporting) to report pay data and provide aggregate information from employee W-2’s. We normally do not write about proposed regulations, but this one appears to have legs. EEOC Chair Jenny Yang stated that the purpose of the new regulations would be to provide the EEOC with insight into “pay disparities across industries and occupations.” The pay information would be broken down by gender, race, and ethnicity across 10-12 broad job categories.

Data on 63 million employees would be covered by this proposed regulation. The regulation would be in addition to the current EEO-1 report, which applies to employers with 100 or more employees and federal contractors with contracts in excess of $50,000. (Federal contractors with 50-99 employees would be required to report race, sex, and ethnicity data, but would not be required to report pay data.)

This new EEOC proposal comes on the heels of California’s Fair Pay Act which became law effective January 1, 2016. This legislation requires equal pay for “similar” jobs.

In short, it behooves employers to get an objective review of pay structures so that their practices are defensible and logical – as well as being internally equitable and externally competitive.

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