ILMA Compoundings September 2016 - 36

POWER PLAY

How Much Money
Do You Make?
The EEOC Wants to Know
Daniel T. Bryant

he Equal Employment Opportunity Commission (EEOC)
recently published a notice in the Federal Register that
employers will be required to submit employee wage
information if that business has 100 or more employees. The
EEOC estimates that the new information submitted will cover
over 63 million employees and contends the regulation is
necessary because of its ongoing concerns with pay disparities
between women and men and among different ethnicities and
races. EEOC intends to utilize the data collected to ascertain
whether certain employers are engaging in discriminatory
practices.
EEOC is not issuing this requirement under the formal noticeand-comment procedure that is generally required under
the Administrative Procedures Act. Rather, this is a technical
requirement under the Paperwork Reduction Act that mandates
the Office of Management and Budget (OMB) "sign-off" on
an agency's data collection request. Before doing so, OMB
must decide if the information/data collection "strikes a
balance between collecting information necessary to fulfill [the
agency's] statutory missions and guarding against unnecessary
or duplicative information that impose unjustified costs on the
American public." Therefore, it is possible that OMB will deny
EEOC's request;1 however, it seems unlikely.

Current Requirements and New Pay
Reporting Provisions
Covered employers currently are required to submit
information to the EEOC on race, ethnicity, gender and job
categories for all employees. This information is now referred to
as "Component 1-Demographic Information," and it is submitted
on the Employer Information Report "EEO-1."
In addition to the current Component 1 requirements,
employers will now have to provide pay ranges based on
"box one" of W-2 forms and must report hours worked by
employees. This information will now comprise "Component
2-Pay and Hours Worked Data" of the EEO-1. In order to
determine which employees to report, employers must take a

"snapshot" of a pay period between Oct. 1 and Dec. 31. Those
employees counted in the "snapshot" would be the ones who
must be reported on the EEO-1.

How to Accurately Account for Time
In order to accurately report employee time, employers must
utilize the definition of "hours worked" as the term is defined
in the Fair Labor Standards Act (FLSA) that includes "all time an
employee must be on duty or on the employer's premises or
at any other prescribed place of work, from the beginning of
the first principal activity of the workday to the end of the last
principal activity of the workday."
Reporting obligations are slightly different depending
upon whether an employee is exempt under the FLSA. For
nonexempt employees, all hours (including overtime) worked
must be reported. For exempt employees, employers have two
options - report all hours worked or report 40 hours per week
for each full-time, exempt employee.

Pay Bands
Further information must be provided regarding ethnicity,
gender and job category of each individual employee within
certain "pay bands." Employers have to provide data in the
following pay bands:
1. $19,239 and under

7. $62,920-$80,079

2. $19,240-$24,439

8. $80,080-$101,919

3. $24,440-$30,679

9. $101,920-$128,959

4. $30,680-$38,999

10. $128,960-$163,799

5. $39,000-$49,919

11. $163,800-$207,999

6. $49,920-$62,919

12. $208,000 and over

Reports must be filed for each establishment, so multiestablishment employers must file a report for each facility.

Vol. 66 No. 9 * 36 * September 2016 Compoundings

ILMA Compoundings September 2016

Table of Contents for the Digital Edition of ILMA Compoundings September 2016