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HR Building - Show Me the Money!

Show Me the Money - EEO
Show Me the Money - EEO

Posted on Thursday, April 25, 2019
Categories: Human Resources

The Equal Employment Opportunity Commission (EEOC) recently told a federal judge that it plans to require employers to turn over pay data, broken down by race, gender and ethnicity, by Sept. 30, 2019.

Businesses with at least 100 employees and federal contractors with at least 50 employees and a contract of $50,000 or more with the federal government must file the EEO-1 form. The EEOC uses information about the number of women and minorities companies employ to support civil rights enforcement and analyze employment patterns, according to the agency.

The EEO-1 form was revised during President Barack Obama's administration to require employers to report pay information from workers' W-2 forms by race, ethnicity, and sex. However, the pay-data provisions were suspended in 2017 by President Donald Trump's administration.

The chart below is a screenshot from the EEOC website and shows roughly a 10-year history of strictly Equal Pay Act charges filed with EEOC.

EEOC Chart 

The changes being made to EEO-1 reporting are in response to either perceived or actual pay inequality and having to submit this data in an effort to better remedy these disparities. Taking proactive measure now can be beneficial to your organization.

In April 2018, in Rizo v. Yovino, the Ninth Circuit Court of Appeals held that an employer cannot justify a wage differential between male and female employees by relying on prior salary.

While no business wants to find themselves having to defend an EEOC charge, below are some tips on pay practices that can help guide your business’s pay practices and policies:

  • Know the law – specifically the Equal Pay Act
  • Check your state for salary history bans and update job applications as necessary
  • Design pay ranges
  • Audit internal pay practices and adjust where necessary – special note: In correcting a pay differential, no employee's pay may be reduced. Instead, the pay of the lower paid employee(s) must be increased.

According to the EEOC, pay differentials are permitted when they are based on seniority, merit, quantity or quality of production, or a factor other than sex. These are known as "affirmative defenses" and it is the employer's burden to prove that they apply.

Tagged:personnel, employment, HR Building, equal employment opportunity

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