Howard Tarnoff, SVP of XOXO Innovation & Programs, Ceridian
On Friday, January 29, seven years after the Lilly Ledbetter law was signed, the Equal Employment Opportunity Commission (EEOC) proposed rule changes that would require large employers to report compensation information as part of their annual EEO-1 filings. Some of you may remember my 2016 predictions, one of which was ‘prepare yourself for public policy change.’ In that post I referenced the executive order Establishing Paid Sick Leave for Federal Contractors. The new EEOC proposed changes are a variation on that theme. To reiterate, while we may not see abundant new laws passed by this Congress, we will likely see new administrative activity like the EEOC’s recent proposal to augment employers’ EEO-1 filing with additional information. And while these changes may be controversial, expect to see more of them.
The good news: a state-of-the-art human capital management (HCM) system will assuage the pain of complying with this new requirement, and more.
What’s required today and what may change?
The annual EEO-1 reports currently provide the EEOC with information on employees, race, ethnicity and gender in various job categories. The EEOC is proposing that starting in 2017, employers will be required to augment their existing EEO-1 reports with data on employee pay ranges and hours worked.
Whenever a governmental agency proposes making changes like these, the employer hue and cry is predictable. First and foremost, the burden of gathering and reporting on the extra data will, employers opine, require more labor or technology or both, driving up the costs of doing business. Similarly, employers are worried about potential liability. What if the data employers provide show they are out of compliance? Could employers be investigated and sued? And finally, what is the EEOC going to do with the data? Are there confidentiality issues that could arise due to the increased wage data employers will be providing?
How can employers prepare?
There is an old adage: “the only things certain in life are death and taxes.” Personally, I think that adage could be augmented with “death, taxes, and employer reports to government.” The latest effort by the EEOC is just one in a long list of increasing reporting requirements employers face and must provide in order to keep their business in compliance. Remember ACA reporting?
While it remains to be seen if the EEOC proposed reporting requirements will be adopted, prudent employers can easily prepare for the EEOC’s proposed change, ACA reporting, and whatever else regulators believe they need to know about your business by acquiring and learning how to use a state-of-the-art HCM system. Some of the key fundamentals of this kind of system should be ease of use, accurate data gathering and reporting, the ability to provide managers with dashboards, analytics, reporting automation and more.
The latest proposal by the EEOC is just one mandate that may or may not be adopted. Before fretting about the next business reporting requirement, employers should evaluate their current HCM capabilities. An excellent system will be flexible enough to provide your business with the agility it needs to quickly and easily comply with all government reporting requirements, past, present and future.
Howard Tarnoff is SVP of XOXO Innovation & Programs for Ceridian, responsible for launching and overseeing the Award Winning Customer Success Program “XOXO” and other initiatives. With over 30 years of HCM experience, Howard is a highly sought after thought leader in the industry, especially for his insightful trend analysis. His deep domain expertise across multiple verticals, leadership experience and deep understanding of the HCM industry make him an invaluable asset to Ceridian. Follow him on Twitter@htarnoff.