Proposed Changes to EEO-1 Report Would Seek Compensation Data
On February 1, 2016, the Equal Employment Opportunity Commission (EEOC) published a notice regarding a proposed revision of the Employer Information Report, otherwise known as the EEO-1 Report. The proposed revision would result in employer submission of workforce compensation data. According to the EEOC, this access to pay data would allow the agency to identify and combat pay discrimination.
The current EEO-1 Report requires all employers with 100 or more employees, and federal contractors with 50 or more employees, to annually report data regarding workforce ethnicity, race and gender. According to charts published with the proposed revision, approximately 67,000 EEO-1 Reports are submitted each year.
If the proposed revision is adopted, beginning as of the September 30, 2017, filing deadline, all employers (including federal contractors) with 100 or more employees would submit pay data. The EEOC estimates that about 61,000 reports will be required to make this additional submission. Federal contractors with 50 to 99 employees (approximately 6,000 reports) would not submit the new pay data, but would instead continue to submit only ethnicity, race and gender information.
On the proposed EEO-1 Report, employers would report Form W-2 earnings across the 12 pay bands used by the Bureau of Labor Statistics in the Occupation Employment Statistics survey. By collecting hours worked as well, the proposed EEO-1 Report will account for partial-year or part-time employment. For example, the report might show that a company employs 10 African American men who are Craft Workers in the second pay band ($19,240-$24,439) who worked for a total of 10,000 hours.
The proposed revisions to the EEO-1 Report are open for public comment for a sixty day period ending April 1, 2016.
Takeaway: Assuming the proposed EEO-1 Report revisions become effective, covered employers will be required to report compensation data in 2017. In the meantime, employers should consider obtaining the advice of legal counsel to independently review their compensation data and address any improper pay disparities.