It is not a matter of “IF ” but “WHEN”

The EEO is under significant pressure by Judge Tanya Chutkan of the U.S. District Court for the District of Columbia to finalize plans for employers to complete the EEO-1 Component 2 “Pay” and “Hours Worked” by gender and race form during calendar year 2019.  During a recent court hearing, Judge Chutkan was seeking input from EEO Chief Data Officer and Director of Office of Research, Information and Planning, Dr. Samuel Haffer on the agency’s plans to receive employer EEO-1 reporting and EEO-1 Component 2 data submissions.

Dr. Samuel Haffer stated that the EEO was not prepared to receive and analyze the EEO-1 Component 2 submissions and that the EEO-1 Component 2 entire reporting process will be outsourced to the University of Chicago: National Opinion Research Center (“NORC”).

Though the EEO-1 Component 2 data submission is still in legal limbo from our perspective, it is not a matter of “IF” but “WHEN” employers will be required to submit “Pay” and “Hours Worked” by gender and race.  The current proposed use of 12 Pay Bands may prove to be cumbersome and not useful for its intended outcome of identifying pay discrimination for gender and race protected groups.

To provide a magnitude of data inflation of the EEO-1 vs the EEO-1 Component 2 reporting form, the EEO-1 Component 2 form has 3,360 potential data points per establishment as compared to the EEO-1 form with 180 potential data points. A significant amount of data systems and corresponding algorithms will be required to mitigate the mixing of apples and oranges and produce reliable and valid data for the EEO-1 Component 2 report submission.

Since we believe that “WHEN” will win against “IF”, the time for employer anticipated action to test and design information systems that will gather, report and analyze EEO-1 Component 2 data is now. A list of data elements for completion of the EEO-1 Component 2 reporting should include the following:

Employee Name
Job Title
EEO-1 Category
Race
Gender
Location
Date of Hire
Date of Termination
Number of Weeks Worked
Exempt or Non-Exempt
Full-time or Part-time
W2 Box 1 Wages
Number of Hours during W2 Period

Learn more by visiting www.johansongroup.net or www.dbsquared.com or request a free consultation by visiting https://www.dbsquared.com/consultation-request-2/.

It’s Time for Overtime

You are probably aware by now the new proposed overtime rule has been released by the Department of Labor.  Though the new provisions don’t go into effect until January, 2020, the overtime threshold will be raised to $35,308 ($679 a week) from $23,660 ($455 a week) per year.

What this means for the employer is that any current salary exempted employee not making at least $35,308 will be reclassified as non-exempt.  The employee will not have the opportunity for overtime pay above 40 hours in a workweek.

Employers will need to determine if it makes sense to increase an employee’s salary to the threshold versus paying the employee at their current wage and hope that the employee doesn’t need to work beyond 40 hours as a reclassified non-exempt employee and end up paying higher than the $35,308 threshold.

Other potential issues when reclassifying an exempt employee to non-exempt include tracking hours and calculating overtime wages, the employee seeing the change as a demotion, and more awareness on the employees’ part of wondering what positions are exempt and non-exempt.

At this time, the proposed overtime rule is just proposed.  Most employers already went through the process of determining position classifications when the original proposed changes came out in 2016, so it shouldn’t take a significant amount of time and effort to meet the new changes set for January, 2020.

Learn more by visiting www.johansongroup.net or www.dbsquared.com or request a free consultation by visiting https://www.dbsquared.com/consultation-request-2/.