One of the most important new requirements for businesses in 2017 will be meeting the updated EEO-1 reporting requirement, which will help federal regulators track and pin down hour and wage disparities based on race, gender, and ethnicity.
The EEO-1 requirement is not as well known as some other, but it’s one that could result in huge fines — or even jail time — if not handled properly.
This is the first year that the report has been expanded from a two-page document to an eight-page document. Filling out the new form will entail more work and, most likely, more confusion. Along the way, employers may turn to their trusted advisors to get help with navigating these new standards.
So, what should you tell them?
Here are three things to know.
1. The Equal Employment Opportunity Commission set up the EEO-1 reporting requirement to fight inequality in the workplace.
The older, shorter version of the report was simply meant to document the extent of diversity within the workplace and root out discriminatory hiring practices. If a job at an organization was attracting only members of one specific demographic group, EEO-1 was a good way to uncover that, so an employer could fix the lack of diversity.
Now, the EEOC is hoping to collect better data on pay inequality as well. The hope is that this data collection will help both employers and the EEOC detect and eliminate gender-based and ethnicity-based pay disparities. This way, the EEOC can better enforce equality in the workplace, and employers can identify and fix patterns that may otherwise have gone unnoticed.
2. The updated version will collect information from both the employer and the employee.
Employers will provide wage information based on W-2s, which will be sorted into designated EEO-1 pay bands; the employees’ titles; and the employees’ hours worked.
Employees will have to self-report their gender, and ethnicity, to make that information is as accurate as possible. This will make the regulations particularly difficult for companies to handle, as there will be multiple sources of information in play.