Tag: legal update

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EEO-1 Reporting Update: How We Got Here and What You Need to Know

wage and hour law compliance, wages

Nov. 11, 2019 is the last day for employers to submit reports detailing their employee compensation data to the Equal Employment Opportunity Commission.

Under the new reporting requirement, employers with at least 100 employees must report information to the EEOC regarding employee wages and hours worked by job category, race, ethnicity and gender. The EEOC is continuing to collect this data for 2017 and 2018 in advance of the Nov. 11 deadline, but the new requirement appears to be short-lived. On Sept. 12, 2019, the EEOC announced that after this year’s deadline, employers will no longer be required to submit compensation data, also known as “Component 2” data.

The EEOC first proposed this additional collection of pay data in 2016, and the reports were slated to be due Mar. 31, 2018. In announcing the new requirement, EEOC Chair Jenny R. Yang explained that the collection of pay data was meant to “assist employers in evaluating their pay practices to prevent pay discrimination and strengthen enforcement of our federal anti-discrimination laws.” The EEOC ultimately reversed course, explaining that the “unproven utility” of the pay data collection is “far outweighed by the burden imposed on employers that must comply with the reporting obligation.”

After Nov. 11, covered employers can return to the EEOC’s previous data collection practices, in which it has required employers to report demographic information (now called “Component 1” data) using the EEO-1 form. Since 1966, employers with more than 100 employees have been required to report the number of individuals employed by job category, race, ethnicity, and gender.

For federal agencies like the EEOC to collect information from the public, they need approval from the Office of Management and Budget, so the EEOC sought approval from the OMB to collect Component 2 data using a revised EEO-1 form.

In 2017, the OMB stayed the requirement to report Component 2 data. Thereafter, several advocacy organizations brought an action against the OMB to end the stay and reinstate the revised EEO-1 reporting requirements and collection of Component 2 data. On Mar. 4, 2019, the U.S. District Court for the District of Columbia ruled that the OMB failed to demonstrate good cause to uphold the stay and permitted the collection of Component 2 data using the revised EEO-1 form. While the Department of Justice filed an appeal on May 3, this did not stay the reporting requirement.

The initial deadline to collect Component 2 data was Sept. 30, 2019, but it has taken a substantial amount of effort for employers to provide the requested pay data information. Before the collection of Component 2 data was officially underway, the EEOC estimated that adding Component 2 data would increase the burden of EEO-1 reporting by 90 percent. Given the difficulty of completing this reporting, it comes as no surprise that the data collection and submission of the revised EEO-1 reports have not been seamless. As of Oct. 8, 2019, only 75.9 percent of covered employers had submitted the requested data by the initial deadline. This is far lower than the response rates for prior EEO-1 Component 1 data collections, which exceeded 90 percent.

It remains unclear how the newly collected Component 2 data will be used, especially since it only includes pay information for 2017 and 2018. The EEOC has stated that, as a general matter, EEO-1 data is used “for a variety of purposes including enforcement, self-assessment by employers, and research.” The EEOC has also published aggregated EEO-1 Component 1 data, in addition to periodic industry specific reports.

While any potential uses for the data are uncertain, the EEOC has implemented procedures “to ensure the protection of identifiable information of our survey respondents and maintain EEOC’s commitment to protect the data confidentiality.” This should allay concerns that an individual employer’s EEO-1 data could be made public.

As for lessons learned in the aftermath of this extensive data collection, employers could use the information gathered to conduct internal pay analyses. While employers will no longer be subject to this particular reporting requirement, prudent employers will still gather pay data by job category, race, ethnicity and gender to take proactive measures to avoid pay equity lawsuits.

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Mental Health Parity Law Successes and Challenges

The Mental Health Parity and Addiction Equity Act of 2008 was passed to ensure that insurers and health plans offer mental health and substance abuse benefits comparable to coverage of medical and surgical care. It has heralded some positive trends, but there are still areas in need of improvement, experts say.

Other than the 2008 act and its precursor in 1996, there has been no legislation in America regarding mental health care, said Mary Kay O’Neill, partner at Mercer.

Also read: The Mental Health Parity Challenge

Until recently, “We didn’t have the resources or cultural language to talk about this,” she said. “How we talk about behavioral health now is completely different than seven year ago.”

Tom Sondergold, vice president, global HRIS, Benefits and Mobility at Walgreens Boots Alliance, said that while his organization has always strived for parity, having the law on their side has helped a lot. The Mental Health Parity Act has highlighted that there aren’t enough providers, he said.

“The parity law has allowed us to have a little bit more weight in working with our carrier partners to make sure they strive to secure more providers,” he added.

Employers should not assume that their insurers or plan administrators are in compliance with parity, said Henry Harbin, a psychiatrist with over 40 years of experience in the behavioral health field.

Employers that have been sued for parity non-compliance include Microsoft Corporation, Marriott International, Indiana University and Boeing Corporation.

Self-insured employers are regulated under the parity law and a liability target. Financial and quantitative requirements — for example, that behavioral health copays must be comparable to medical copays — have been reasonably in compliance with health plans and employers, he said. But non-quantitative requirements are where most litigation is happening for failing to comply with the law because there aren’t numbers or data to directly compare, putting self-insured employers at risk.

These non-quantitative treatment limitations include areas like reimbursement rates and admissions standards to the provider network. While it’s generally clear if the health plan is complying with the quantitative parity requirements, with non-quantitative requirements, it’s harder to tell if the health plan is complying with the law.

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5 Paid Family Leave Trends to Watch in 2019

paid family leave

In 2018, Microsoft surprised employers and policymakers alike when it announced a new requirement for its vendors: give contract workers at least 12 weeks of paid leave after having a child, or risk losing the tech magnate’s business. For HR managers nationwide, this was just one of many signs that the conversation surrounding paid family leave is growing from a slow burn to a steady fire.

While federal action on paid family leave has been a nonstarter in decades past, large organizations along with state and local legislatures are pushing Washington to reassess its commitment to national paid time off. As an HR manager, understanding the following national trends and local changes surrounding paid family leave will help you better assist both employers and employees in navigating future policies and complex legislation.

Expect vendor-leave mandates to become more common

While only some organizations are currently mandating vendors to implement paid family leave, it’s likely that trends like these will only increase over time. After all, it’s no secret that paid family leave is rapidly growing in popularity. Around 6 in 10 Americans say they have taken or are very likely to take time off from work for family or medical reasons at some point, and around 8 in 10 support paid family leave for new mothers (around 7 in 10 support paid family leave for new fathers). These numbers are expected to grow, with employers seeking to provide additional benefits for high-quality employees in an increasingly competitive talent market.

Watch for paid family leave on the federal agenda in 2019

The midterm elections shifted political balances in many states. With major shifts in both the House and Senate, it’s likely that a reinvigorated version of the FAMILY Act will move forward. The 2017 bill proposed 12 weeks of paid leave for family and personal medical needs, seeking funding through a 0.4 percent payroll tax split between employers and employees. Previous pre-midterm legislation is less likely to gain new life — this includes the Economic Security for New Parents Act and Workflex in the 21st Century Act.

While a divided federal government may make the likelihood of paid family leave reform less likely in the near future, there has been significantly more bipartisan discussion on this topic than in years past. Both Democrats and Republicans in the Senate and House are discussing introducing legislation this year. In addition, longtime congressional veterans, political newcomers and even presidential candidates have made it a core component of their platforms, signaling a renewed interest in moving the needle on this topic.

Look to states for the future of paid family leave

Three states launched or approved paid family leave in 2018:

  • Washington state will launch its paid family and medical leave program on Jan. 1, 2020. The program offers up to 12 weeks of paid family leave, 12 weeks of paid medical leave, or 16 weeks paid leave total. Employers will have to choose between the state-run plan or otherwise submit their own plan.
  • Massachusetts signed paid family and medical leave legislation that will go into effect Jan. 1, 2021. The program will offer up to 12 weeks of paid leave for family member care or caring for a new child, plus 20 weeks of paid leave for personal medical issues.

As the conversation around paid family leave continues, it’s important to take note of these major state-level policies. As of Jan. 1, 2019, 21 states have had a version of a paid family and medical leave bill introduced in either chamber of their state legislature. State legislation will likely serve as a framework for future employers and politicians looking to provide paid family leave in their respective districts.

Expect increased regulation and complexity

While policymakers are responding to the need for paid family leave, complex legislation may make the process of providing leave across state lines a difficult process. It will likely fall to HR managers to sort through the various paid family leave policies that multistate employers face.

Keeping track of individual state legislation and paying attention to national discourse surrounding parental and medical leave trends will help tremendously as paid family leave administration becomes increasingly complex. Additionally, outsourcing help as needed when faced with the prospect of new legislation will free up the valuable time required to study and implement new or revised programs.

Above all, be ready

While each of these trends point to a renewed interest in providing quality paid family leave to millions of Americans this year, the broader message is clear: Leave policies and the administration surrounding them will only become more complex in 2019. As an HR manager, your best frontline defense is a thorough understanding of the local and national trends surrounding leave policy.

Your organization will look to you to make sense of where the conversation is moving — and, when the time comes, they will seek your insights when putting a revised or new paid family leave plan into action. Getting a jump-start on the larger conversation, paying attention and outsourcing as needed are your best tactics for success in 2019. It’s up to you to use them wisely.