Get ready; the federal government’s next big regulatory burden is less than a year away.  Companies with 100 or more employees will now have to report how much money each employee makes to the Equal Employment Opportunity Commission by March 31.

The salary reporting will be added to the EEO-1 reports companies already file annually. Only now, the reports will have to include W-2 wages and hours for all of your employees in addition to the information about race, ethnicity, and sex. You will also have to divide your workers into groups of 12 job bands with incomes from $19,239 to $208,000.

In other words, an already complicated process has just gotten 20 times more complicated.

Need more? Attend Increasing Your Organization’s Cultural Competency on July 21

The new requirement is an effort to reduce pay disparities among protected classes, like women and minorities. While employers generally support the goal, I can’t ignore the fact that the new form has 3,500 data cells and still provides no smoking gun showing that differences in pay are the result of gender or race discrimination.

There is some good news for employers. First, the EEOC will use a “snapshot” pay period from Oct. 1 through Dec. 31, 2017 (rather than July 1 – Sep. 30, as required for the current EEO-1 report). This will allow you to use the same information as your existing W-2 pay reports rather than collecting a separate set of figures.

Second, along the same lines, you have until March 31, 2018 to get your new report in. But in this case an ounce of planning could be worth thousands of dollars in prevented fines and penalties. Below I provide eight questions you should be asking yourself now to prepare for the reporting changes:

  • Is your payroll system equipped to generate the right reports?
  • Do your outside vendors understand the new system?
  • Are your policies concerning overtime, bonuses, commissions and other components of W-2 wages correct and up to date?
  • Can you easily get information regarding the benefits choices your employees make since these elections impact W-2 income?
  • Are your job descriptions accurate and up-to-date in terms of essential job functions? Do they support pay decisions that affect different job responsibilities?
  • Have you identified job titles in each of the new EEO-1 job categories?
  • Do you have existing pay bands that can be easily combined with new pay bands on the EEO- form?
  • How will you track the hours for your exempt employees since the EEOC now wants to know how many hours each employee works a week, or is expected to work each week?

Trade associations in Washington are challenging the new reporting, which was passed under the Obama administration, but unless the reporting is scrapped altogether it’s likely that employers will still need to make at least some changes.

As a result, it’s best to evaluate and document all pay practices now.

Want to hear from the experts on how to do just that? Attend our Increasing Your Organization’s Cultural Competency Seminar on July 21 at Ramblewood Country Club. You can register by clicking here. Or, contact NJBIA’s Member Action Center at 1-800-499-4419, ext. 3 or