Heads up: The EEOC is about to start snooping around your pay practices

President Obama has made it clear that equal pay is one of his top priorities, and his latest action should go a long way to advancing that goal. It’s also likely to add a significant amount of administrative work for Finance staffs.  

On the seventh anniversary of the Lilly Ledbetter Act, the Obama administration announced that it is taking some monumental steps to identify potential pay discrimination.

The key step: Enlisting the help of the EEOC to procure more detailed payroll data from employers.

The EEOC — in partnership with the DOL — issued a proposal to start collecting pay data from employers with 100 or more employees to help uncover and root out pay discrimination.

And the feds plan to garner that info through a revised version of its Employer Information Report or EEO-1 Report. As most HR pros are well aware, the EEO-1 is a compliance survey — a survey that, with limited exception, is required for all private employers (including federal contractors) with 100 or more employees — where employers report employment data categorized by race/ethnicity, gender and job category.

The revised EEO-1s would add data on pay ranges and hours worked to the information it’s already collecting.

According to the EEOC, “the proposal would cover over 63 million employees.”

When is it happening, what will the feds do?

The EEOC’s proposal is slated to take effect in 2017 and will be open for public comments on the until April 1. You can view an advance copy of the revised EEO-1 here.

So what do the feds plan to do with this extra info? The agency plans to use the pay info:

“to assess complaints of discrimination, focus agency investigations, and identify existing pay disparities that may warrant further examination.”

That “may warrant further examination” line should grab employers’ attention. Based on the feds’ intentions, it would be wise for employers to do a run through with the revised form and see if any of the data points to pay disparities among the same classification of employees and uncover whether there’s a logical explanation for those disparities.

After all, if you can’t explain those pay differences, you’re likely to wind up dealing with an extended visit from the EEOC.