Nobody remembers I.F. “Izzy” Stone (1907-1989) but everybody should; he was a reporter who did deep-dive readings of the handouts, the press releases, and the public documents.  Izzy would love the EEOC as a target.  While the EEOC did not include its proposed EEO-1 form in its updated Final Comment Request, you can find it (just as Izzy would have found it and devoured it).

Reading the EEOC’s conclusion that the cost of including pay data is only $416.58 per employer suggests that it is necessary to read the form itself (and very carefully).  The requested additional data is merely 1,512 cells to be filled in twice: once with numbers of employees and once with hours.  That is for one establishment; if an employer has 10 establishments, that is 30,000+ cells to calculate, populate, double-check, and then certify that “These reports are accurate and were prepared in accordance with the instructions.”  All for $416.58?

Swamped by the numbers?  Let’s go back slowly.  There are 12 salary bands on which the EEOC wants data; it demands that data separately for each of the 9 EEO-1 job categories (professionals, technicians, craft workers, etc.) and for each of the 14 traditional race/sex categories.  So, 12 x 9 x 14 = 1,512 for the number of employees and the same for the aggregate hours.  Izzy (were he still alive) would note the irony of the EEOC complaining about “the complexity” of its “burden” in explaining how this is consistent with the Paperwork Reduction Act.

But, wait, it gets better.  The EEOC states that its current EEO-4 report (for state and local government employers) requires compensation data – albeit with not quite so many cells.  It then  points out that for those EEO-4 forms “on average approximately 7% of the cells on the reporting form are actually used by an employer to report data” and, thus, it anticipates that “[t]he overwhelming majority of the cells [will be] left blank.”  Izzy would ask “why bother at all then?”

If you are curious why the EEOC is bothering, its updated explanation of how it will use this data is set out at pp. 41-46 of this Final Comment Request.  That, however, is a long-term focus.  Inquiring readers today prefer the short-term focus: i.e., what has changed from the EEOC’s initial proposal to its revised proposal?

Let’s turn to what is changed.  Precious little:

• compensation reporting is now W-2 only: no employer options;
• EEO-1s with compensation data will not be due until March 31, 2018;
• the employer choice of when to take the “snapshot” of its workforce has now narrowed to the 4th quarter only; and
• hours worked are FLSA hours for nonexempts and for FLSA exempts either a default of 40 (which will be used almost always) or actual hours if available.

Beyond promising no burden, the EEOC’s “Final Comment Request” also does a deep dive into confidentiality and data security to reassure the world that what is reported will not be spilled. From those same wonderful folks who promised that all of this reporting can be done at a cost of only $416.58, this is truly reassuring.  Regrettably, Izzy would not be so reassured: “Every government is run by liars and nothing they say should be believed.”

Izzy, however, did not promise a world free from such governments.  Prudent employers can merely begin planning early (which is far more practical than cursing).  Let’s stake out what employers need to look at to be ready for the initial EEO-1 with compensation data.

First, HR information systems (with the demographics) will need to sync with payroll systems.  Otherwise, the matching of demographic information with hours and with W-2 wages will be overwhelming.  Let’s prove Izzy wrong here in writing that “[t]he only thing God didn’t do to Job was give him a computer.”

Second, if the computers are synced, then do a test run with 2016 year-end data.  Izzy too believed that practice improves performance: “You have to take the long view…. it’s like pissing on a boulder.  For the first few thousand years, you don’t see any effect.  But after that, you start to see a definite impact.”

Finally, study (but only in a framework that is subject to attorney client privilege) how the EEOC will use the data to decide what measures may be taken (but be careful of reverse discrimination) and what explanations will bear up under scrutiny.  Izzy offers the following guidance on  explanations: “I sought … the overlooked fact, the buried observation which illuminated the realities of the situation.”

PS: The fate of regulatory reforms that do not take effect before a change in Presidential administrations — so-called “midnight regulations” — is another subject altogether.  While “midnight regulations” know no party boundaries, loyalists of the party not in the White House always aspire to relief from such regulations.  There is even a pending bill in Congress entitled the Midnight Regulation Relief Act.  Fantasy fictions of “what if …” , however, are beyond the scope of this blog.