The Equal Pay Act’s New Friend: Your EEO-1

Employers Need EPL Like Never Before

Employers: The time to elect Employment Practices Liability coverage is now. Component 2 of the EEO-1 is due September 30, 2019, and it dictates payroll data be disclosed to the EEOC, who enforces the Equal Pay Act.

But I don’t intend to pay my employees in a discriminatory manner, you say. Surely I’m not culpable for a pay disparity?

You are – and here’s why.

The Equal Pay Act is a strict liability statute, meaning there is no need for the employer to intend to pay in a discriminatory manner. Component 2 requires employers to provide hours and pay information by the same categories as Component 1, which includes the category of sex. To the extent that the EEOC finds your reported information persuasive, they will seek to use Component 2 pay data as admissible evidence in the event of an Equal Pay Act claim against your company. 

Dig into that payroll data, if you haven’t already, and check for objective disparity in your payroll that may give the appearance that it is based on sex. If it exists, check to see if there is a clear legitimate reason for each disparity (seniority, production, etc.). Find and fix any issues before someone else does.

Your next step? Contact W3 Insurance for an Employment Practices Liability policy. It’s our job to stay up-to-date regarding your employer requirements so you can focus on your ultimate goal –  your business.