News & Events

EEOC Proposes Adding Pay Data To Annual EEO-1 Report

To assist in identifying and assessing possible pay discrimination, the Equal Employment Opportunity Commission (EEOC) announced a proposed rule which revises the Employer Information Report (EEO-1) to include data on employees’ total annual W-2 earnings and annual hours worked across 10 job categories and by 12 pay bands. An illustration of the data to be collected can be found here.

Employers with 100 or more employees and certain federal contractors with 50 or more employees are currently required to report on the EEO-1 employees’ ethnicity, race and sex by job category using data collected annually from any pay period occurring from July through September. The proposed rule responds to public comments submitted to the Office of Federal Contract Compliance Programs (OFCCP) in response to the requirement proposed by the OFCCP in August 2014 that certain federal contractors submit compensation data reports to OFCCP. Those comments expressed, among other things, the need to improve interagency coordination and a desire to report the compensation data on the EEO-1 rather than a new OFCCP form.

The new reporting requirements would take effect with the 2017 reporting cycle (i.e., September 30, 2017) and apply to employers with 100 or more employees. Federal contractors that are subject to the EEO-1 reporting requirement and have between 50 and 99 employees will continue to use the current EEO-1.

While the proposed rule is not final (comments to the proposed rule are due by April 1, 2016), employers should begin to consider how they would comply with the new requirements. For example, employers collect W-2 earnings information, but reporting the W-2 earnings by pay bands may require reprogramming and testing of human resource information systems (HRIS) database output. Moreover, the EEOC has specifically requested input on how to report hours for salaried employees to the extent that employers do not currently maintain this information, which is particularly likely for exempt employees whose actual hours worked are not required to be tracked under either federal or Ohio wage and hour law. And, while the proposed rule does not per se require the reporting of the specific salary of an individual employee, confidentiality concerns exist, particularly when only one employee falls into a particular classification, category and pay band.

If you have any questions regarding your EEO-1 reporting obligations or would like assistance in preparing and filing comments to the proposed rule, please contact Jeffrey M. Embleton, Amy L. Kullik, James A. Budzik, or Ann E. Knuth in our Labor and Employment Group.

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