Attorney M. Trevor Lyons of Walsh, Pizzi, O’Reilly and Falanga
Whether or not businesses will have to report wages and salaries as part of their EEO-1 reports this year is still up in the air. At the very least, businesses can expect to have until the end of September to collect the data.
But whatever happens on the legal front, one New Jersey attorney is saying businesses may want to start collecting and analyzing the data now anyway because the issue of pay equity is not going away.
EEO-1 reports require businesses with 100 or more employees, and certain federal contractors, to report the job titles of their employees by race and gender. and have been around since the Equal Employment Opportunity Commission’s(EEOC) beginning. In 2016, the Obama administration expanded the reports to include salary and wage information in addition to job titles.
President Donald Trump’s Office of Management and Budget (OMB) put a hold on that requirement, citing its authority to halt burdensome regulatory requirements. In March, a federal judge ruled that OMB did not justify its decision and said the EEOC has to collect the salary and wages data after all.
Last week, the EEOC told the courts the earliest it could do so for 2018 data would be Sept. 30 of this year. The agency offers no guidance on what it is calling “component 2” of the EEO-1 reports, saying only that it’s “working diligently on next steps in the wake of the court’s order… The EEOC will provide further information as soon as possible.” Component 1 of the reports on job titles is still due May 31.
For attorney M. Trevor Lyons of Walsh, Pizzi, O’Reilly and Falanga, however, the question is, Why wait? Businesses of a significant size have plenty of reasons to start collecting the data anyway.
“I don’t want to say it’s inevitable, but it kind of has that feel to it,” Lyons said in a recent interview.
Since the Obama administration’s regulations, New Jersey has passed its “toughest-in-the-nation” pay equity law, and trends like the #metoo movement have put the spotlight on discrimination and inequalities of all kinds.
Under the New Jersey law, public contractors are already required to file a similar report on salaries to the state. And it’s widely considered best practices for businesses to conduct a pay audit to see if they have significant disparities involving members of a protected class.
“If employers have a gender-equity pay gap, the Diane B. Allen Act (New Jersey’s pay equity law) makes it significantly harder to defend that discrepancy,” Lyons said. “So the idea is if employers do what the EEO-1 regulations may soon require, they may also use that data to conduct a pay analysis and identify and potentially remedy issues that might have otherwise resulted in liability or litigation risk.
“My advice to employers would be to use the potential new requirement of the EEO-1 report as an opportunity to analyze your wages for potential pay-equity issues,” Lyons said.
Lyons also cautioned for preparedness stating, “Employers may also want to immediately determine what steps it would take to comply with the new reporting requirements in case the present administration does not appeal and they go into effect quickly.”
Whether or not businesses will have to report wages and salaries as part of their EEO-1 reports this year is still up in the air. At the very least, businesses can expect to have until the end of September to collect the data.
But whatever happens on the legal front, one New Jersey attorney is saying businesses may want to start collecting and analyzing the data now anyway because the issue of pay equity is not going away.
