EEOC Announces Proposed Addition of Pay Data to Annual EEO-1 Reports
On January 29, 2016, the Equal Employment Opportunity Commission (“EEOC”) announced a proposed revision to the Employer Information Report (“EEO-1”) that would require certain employers with more than 100 employees to submit pay data on an annual basis. The EEOC claims the new data will assist the agency in identifying possible pay discrimination and assist employers in promoting equal pay in their workplaces.
The EEOC intends to publish aggregated data from employers into an annual salary report that would show the average compensation for workers in different geographic regions and/or industries.
What is the EEO-1?
The current EEO-1 requires (1) certain federal contractors with 50-99 employees, and (2) private employers with 100 or more employees, to submit an annual report detailing the number of individuals they employ by job category and race, ethnicity, and gender. This report is due by September 30 of each year.
As a refresher, the ten EEO-1 job categories are:
1.1: Executive/Senior Level Officials and Managers;
1.2: First/Mid Level Officials and Managers;
4: Sales Workers;
5: Administrative Support Workers;
6: Craft Workers;
8: Laborers and Helpers; and
9: Service Workers.
The seven race and ethnicity groups are:
- Hispanic or Latino;
- White (Not Hispanic or Latino);
- Black or African American (Not Hispanic or Latino);
- Native Hawaiian or Other Pacific Islander (Not Hispanic or Latino);
- Asian (Not Hispanic or Latino);
- American Indian or Alaska Native (Not Hispanic or Latino); and
- Two or More Races (Not Hispanic or Latino).
What Does the Proposed Revision Now Require?
Under the proposed EEO-1, employers with 100 or more employees would have to submit data about pay. Notably, however, federal contractors with 50-99 employees who would otherwise have to submit an EEO-1 would not have to report pay data. Instead, they would continue to report only information about ethnicity, race, and gender by job category. Non-contractor employers with 1-99 employees, and federal contractors with 1-49 employers would not be required to file any form of the EEO-1 (as is currently the case).
How Would the Wages Be Reported?
According to the proposal, employers would identify employees’ total W-2 earnings for a 12-month period looking back from a pay period between July 1 and September 30.
In addition, for each of the EEO-1 job categories, employers would tabulate and report the number of employees whose W-2 earnings for the prior 12 months fell within each of 12 pay bands. For example, an employer would report on the EEO-1 that it employs 10 African-American men who are Craft Workers in the second pay band ($19,240-$24,439).
The pay bands correspond with the 12 pay bands used by the Bureau of Labor Statistics in the Occupation Employment Statistics survey:
- $19,239 and under;
- $19,240 – $24,439;
- $24,440 – $30,679;
- $30,680 – $38,999;
- $39,000 – $49,919;
- $49,920 – $62,919;
- $62,920 – $80,079;
- $80,080 – $101,919;
- $101,920 – $128,959;
- $128,960 – $163,799;
- $163,800 – $207,999; and
- $208,000 and over.
The proposal also would account for part-time workers, those who worked less than a full 12 months, and workers with W-2s from multiple employers. It would do so by collecting the total number of hours worked by the employees counted in the pay bands. For example, an employer would report on the EEO-1 that total hours worked for 10 African-American men who are Craft Workers in the second pay band ($19,240-$24,439) is 10,000 hours.
If the proposed changes are approved, eligible employers will have to submit the required pay information in the EEO-1 form due September 30, 2017.
What Should Employers Do Now?
Because any final requirement would not require employers to report pay until September 30, 2017, employers have an opportunity to review their current pay structures to assure that their pay decisions are made without regard to one’s race, ethnicity, or gender. Employers should also review whether their current HRIS systems allow them to capture W-2 pay data during any 12-month period, or simply on a calendar year basis.
Employers who are concerned about the EEOC’s proposed collection of such information have until April 1, 2016, to submit comments.
The proposed form to collect compensation data can be found at: http://www.eeoc.gov/employers/eeo1survey/2016_new_survey.cfm