The Impact of EE0-1 Reporting Form Changes and How HR Can Be Compliant
The latest development from the Equal Employment Opportunity Commission (EEOC) was released at the end of September which involved an update to the EE0-1 reporting form. The new EE0-1 reporting form requires that private employees with 100 or more employees and federal employees with 50 or more employees start collecting wage data for all employees. These EE0-1 reporting form updates were implemented to better monitor the pay disparity that exists as a result of race, ethnicity, and gender. Employers submit the EE0-1 reporting form annually.
EE0-1 Reporting Form Challenges
The EEOC is obviously trying to play a more integral role in monitoring and limiting pay disparity by adopting these changes to the EE0-1 reporting form, however, there are some who are concerned about the added burden it will cause to the already overstressed and overworked HR professionals who have to help manage the process.
One potential issue raised by HR employees is that simply looking at someone’s annual salary as provided by a W-2 form doesn’t provide an accurate representation of what is really going on with an employee’s pay. It’s like seeing people cross the finish line without knowing what race they’re in or how they got there which defeats the purpose of what the EEOC is trying to do.
How people get to where they’re going is a complicated process dependent on many factors that wouldn’t be included in staring at a simple number on the EE0-1 form. Education, length of employment, and experience play a large role in how companies structure pay. Their career path may also play a role.
Another potential issue is measuring or quantifying benefits that exist outside of salary like stock options. You could have two employees who are different races cash in on their stock options at different times which would lean to pay disparity issues when none actually exist.
One of the biggest potential headaches caused by this new EE0-1 reporting form is that many companies don’t use an integrated employment platform.
Minimize EE0-1 Reporting Form Risk
Even though the EE0-1 reporting form updates aren’t active until 2017 (and the deadline has been extended until the end of March 2018 to give employers time to collect all the necessary data), it’s important that you implement some processes now to protect yourself from the fallout next year.
One of the biggest potential headaches caused by this new EE0-1 reporting form is that many companies don’t use an integrated employment platform. If you currently use an applicant tracking system or HRIS that doesn’t communicate or isn’t integrated with your payroll and timeclock system, you may find yourself overwhelmed with the added burden of compiling and aligning the data. Choosing a one stop shop platform which integrates with and plays “nice” with your other systems to manage your process and your personnel, could save you loads of time and money for next year.
Another process to adopt to save yourself stress later on is to create a benefits retrieval system either from your HRIS or manually that helps you pull benefit information readily. Having a way to monitor and “prove” that these benefits are available and utilized on different timelines (and assigning them a salary “number”) will keep you out of the EE0-1 reporting form hot seat.
Lastly, you’ll want to read over the 10 EE0-1 reporting form job categories to determine wherein each of your employees fall. You’ll also want to revisit job descriptions and determine if the coordinating job titles are an accurate representation of the responsibilities that employee is performing per the EE0-1 reporting form. If your organization has classified someone as VP, but that person functions more like a manager, then it will benefit you to reclassify that particular employee since the EEOC will be comparing that individual’s wages to others’ wages in the same category. You don’t want to create a potential disparity alert when there shouldn’t be any cause for concern.
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