woman wage dataIn only 18 months, federal contractors and subcontractors with 100 or more employees will be forced to report wage data to the EEOC via the new EEO-1 report, in order to show that there is no discrimination in pay. While this seems a long way away, employers whose data may not be so kind to them could benefit greatly from reviewing (and fixing) the pay disparities now. The “workforce snapshot period” is between October 1 and December 31, 2017. Thus, employers needing to review their pay practices (this is code for – employers whose data would show that females or minorities are paid less than their counterparts) would be wise to do so before the relevant period (one of the payrolls in that window) in order to make adjustments prior to reporting.

Further, if an employer were to be very on the ball, any such adjustments would best be made at the next annual merit increases, or performance reviews prior to the reporting period (preferably before December 1, 2016 – read more on that below). Thus, a little pre-planning could go a long way in not drawing any red flags to those who might otherwise receive a random raise without job justification. Further, if an employer has a bucket of money come raise time, it should use that opportunity to allocate more to those positions that are underpaid and less to those overpaid to control overhead costs. Additionally, employers should familiarize themselves with the relevant pay bands. It may not take much to raise a female employee from one pay band to another, or similarly, keep an male employee at a pay band when on the bubble (I recognize this sounds horrible, but it is reality – the EEOC is looking at pay bands, not actual salary so paying a woman 1 cent more to bump her up a pay band and a male 1 cent less to keep him in a pay band will fall in the employer’s favor all things being equal).

Also, keep in mind that employers would greatly benefit from reviewing the various pay bands at the same time you are reviewing the overtime revisions and make all the changes in one fell swoop come December 1, 2016. As I’ve said before, the December 1, 2016 deadline is really the best excuse employers have to change pay practices without much mystery as to why. There is hardly an employee that doesn’t know about the amendments and is waiting for the change.

Finally, in addition to reporting pay data in 10 EEO-1 job categories, employers will need to report the hours worked that year by each pay band. Employers can find more information on the EEOC’s website here. In the end, employers may be surprised to find after an internal audit that their pay rates are misaligned (not necessarily because of anything intentional) – and so now is the best opportunity to get that corrected and on the right path.

Dollars 2As I wrote about in April, on February 1, 2016, the EEOC proposed revisions to add wage and hour information to employers’ yearly EEO-1 report.  The EEO-1 report is required by the EEOC, pursuant to its authority in Title VII of the Civil Rights Act of 1964 (Title VII), and requests submission of information aimed at detecting discriminatory practices.

The proposed revision is the recommendation of a 2010 Equal Pay Task Force between the EEOC, DOL and President Obama’s National Equal Pay Task Force. The EEO-1 survey is used by the EEOC and the OFCCP (Office of Federal Contract Compliance Programs) to analyze and enforce non-discriminatory employment (such as a contractor who hires no minorities). According to the EEOC, this information will enable it to compute and compare pay between men/women and various races and ethnicity to find potential discriminatory pay practices.

Following the closing of the April 1 comment period, the EEOC has since revised its proposal, as summarized below.  The comment period for the new revisions closes August 15, 2016.

Who Needs To Complete An EEO-1 Report?

The EE0-1 survey must be filled out by all employers subject to Title VII with 100 or more employees (this includes corporate enterprises and/or shared ownership) and federal contractors / first-tier subcontractors subject to Executive Order 11246 (government contract over $10,000) with 50 or more employees and a prime contract or first-tier subcontract of $50,000 or more. Employers with 50-99 employees would not need to report this new additional pay and hours worked data (now called “Component 2” of the EEO-1) , just the current information such as race, gender, etc. (“Component 1”).

The proposal would change effective the 2017 reporting cycle for employers with 100 or more employees – they would need to add the pay and related information by March 31, 2018. Note- this is a 6 month extension from September 2017 (which was originally proposed). Thereafter, the EEO-1 report will be due by March 31st of each subsequent year.  Keep in mind, however, the September 30, 2016 deadline and EEO-1 reporting is unchanged!  According, employers would report September 30, 2016 with the old form, and the next report would be due March 31, 2018, with the new data/form.  A sample of the proposed new EEO-1 report can be found here.

What New Data Must Be Reported?

The proposal would require covered employers to provide data on employees’ W-2 earnings and hours worked based on a calendar year basis ending December 31.  This is a significant (positive) change over the EEOC’s first proposal. Employers would use the W-2 Box 1 income figure used for end-of-year tax reporting.  Thereafter, employers will need to aggregate W-2 data in 12 “pay bands” (pay range, for the rest of us) for 10 different job categories: Executive/Senior Level Officials and Managers; First/Mid-Level Officials and Managers; Professionals; Technicians; Sales Workers; Administrative Support Workers; Craft Workers; Operatives; Laborers and Helpers; and Service Workers).

As for how to report the “hours worked” component for full-time salaried employees, the EEOC now is recommending that for non-exempt employees, actual hours be reported.  For exempt (salaried) employees, an employer would have the option of: (1) reporting actual hours worked; or (2) report 40 hours per week for full-time employees and 20 hours per week for part-time employees multiplied by the number of weeks the individual is employed during the EEO-1 reporting year.

In short, we hurry up and wait again…

Yesterday was “Equal Pay Day” – this is the day that the average pay for women catches up to the average pay for men from the preceding year alone.  I had no idea until I received an EEOC email update proclaiming this to be true.   For what it’s worth, apparently today is National Make Lunch Count Day, National Scrabble Day, National Peach Cobbler Day, National Thomas Jefferson Day and, my favorite, National Bookmobile Day.  All worthy causes, to be certain.  On to the EEOC’s latest administrative burden on employers.

EEOC Seeks Revisions to EEO-1 Survey.

On February 1, 2016, the EEOC proposed revisions to add wage and hour information to employers’ yearly EEO-1 report.  This is old news, of course, but as the comment period closed on April 1, 2016, and the EEOC sent me the email of what’s on its radar, I thought it might not be bad to revisit what is likely coming down the pipeline.  The EEO-1 report is required by the EEOC, pursuant to its authority in Title VII of the Civil Rights Act of 1964 (Title VII), and sets forth information aimed at detecting discriminatory practices.  The proposed revision is the recommendation of a 2010 Equal Pay Task Force between the EEOC, DOL and the President’s National Equal Pay Task Force.

Who Cares?

The EEO-1 survey is used by the EEOC and the OFCCP (Office of Federal Contract Compliance Programs) to analyze and enforce non-discriminatory employment (such as a contractor who hires no minorities).  The EE0-1 survey must be filled out by all employers subject to Title VII with 100 or more employees (this includes corporate enterprises and/or shared ownership) and federal contractors / first-tier subcontractors subject to Executive Order 11246 (government contract over $10,000) with 50 or more employees and a prime contract or first-tier subcontract of $50,000 or more.

However, the EEOC has taken mercy – not all employers will have this additional pay and hours worked data burden (now called “Component 2” of the EEO-1).    Continue Reading Happy (Belated) Equal Pay Day! EEOC’s Proposed Amendment to the EEO-1 – Requiring Pay Data

Kenney Equal Pay ActThe EEOC issued new resource documents today in connection with its White House United State of Women Summit. The EEOC issued the following:

As with its earlier ADA guidance, the above “resource documents” are simply new webpages providing guidance for the above topics. For example, the EEOC’s proposal to collect pay data is not new, I blogged about it earlier. However, the new guidance notes that, following the first public comment period regarding the proposal, it will submit additional revisions and revised proposal for a second comment period this summer, 2016.

In short, the guidance reinforces that men and women must be paid equal wages if they perform the substantially same work, in the same workplace, under the Equal Pay Act (the picture above is President John F. Kennedy signing the Act into law in 1963).   “Wages” includes pay, overtime pay, bonuses, stock options, profit sharing, bonus plans, life insurance, vacation and holiday pay, and other forms of compensation.

What About Minnesota’s Equal Pay for Equal Work Law?!

Minnesota also has its own Equal Pay for Equal Work Law, Minn. Stat. 181.66 – .71.  Minnesota requires that employers (1 or more employees) similarly cannot discriminate against employee’s wages based on sex. The exception is public employers and employers that make payments based on a seniority system, merit system, piece rate system, or other differential based on any other factor other than sex.  Naturally, employers may not retaliate against an employee for making a complaint under this law.

What are the penalties for violating Minnesota’s Equal Pay for Equal Work Law? You don’t want to find out. An employee can sue the employer in court for the amount of unpaid wages for the previous year, plus an equal amount as liquidated damages, plus attorneys’ fees. Such an action may be brought by one employee or more collectively. This will add up much quicker than you would think. To put it into perspective, in Ewald v. Royal Norwegian Embassy, a single plaintiff was awarded $170,594 in lost wages and $100,000 in emotional distress.  The court then awarded the plaintiff’s attorneys $1.98 million – yes, that’s $1,983,692.66 ($1.7M in attorney’s fees and $209,973.61 in costs), as well as prejudgment interest on Plaintiff’s damages in the amount of $114,267.31. Thus, employers would be wise to internally audit their pay practices, at least annually, to ensure that pay ranges are consistent across the board within a certain position so you don’t find yourself in Norway’s boots.

Thank youOkay, I admit that I only recently poked fun in one of my posts at the idea that every day is some sort of “__ Day”.  However, today is Administrative Professional’s Day and I can’t let it go by without sending a shout-out and thank you to those who support us crazy, neurotic, Type-A attorneys.  Having first been a paralegal for 8 years, I’ve been there – done that.  We ask you to work on 15 things at the same time, wait until THE VERY LAST POSSIBLE minute to file something (with multiple exhibits and attachments to the attachments, nonetheless), and change one word or two right before filing (hey – it has to be perfect!), throwing off that word count after the certification has already been prepared.

As long as I’m on my laundry list, let’s see…we change a “final” correspondence (already printed on the nice letterhead) at least twice before it “has” to go out that day; decide something should be sent via messenger instead of U.S. Mail and then change our minds again; and ask you where things are saved on the system – that we created.  Genius.  Oh, and don’t forget you are supposed to have ALL the filing rules memorized as well as service of process, filing fees, and pretty much everything else our tiny brains can’t retain.  And, can you just do this one thing “super quick”?  You always do.

I hope I treat you right – I know I try and am far from perfect.  But I expect that if I need a smack upside the head back into reality, you’ll not hesitate to deliver.  So, today’s post is my hat’s off to Linda, Sue and Melissa. Because, we don’t tell you enough that we appreciate you, value you, and frankly, can’t do what we do without you!