The EEOC Revises Its Proposal to Collect Pay Data
Miller & Martin PLLC Alerts | July 20, 2016
by Karen Smith
Earlier this year, the U.S. Equal Employment Opportunity Commission (EEOC) published a proposal to collect pay data through the Employer Information Report (EEO-1) that is filed every year by private employers with 100 or more employees or who are federal contractors, first-tier subcontractors or banks or other financial institutions with 50 or more employees. After receiving and reviewing comments regarding this proposal, the EEOC has issued a revised proposal which would only require this first group of private employers, those with 100 or more employees, to add pay data to their 2017 EEO-1 Reports, which will be due March 31, 2018.
Under the EEOC's latest proposal, these employers would be required to report W-2 income data for all employees by tallying the number of employees in 12 pay bands for each EEO-1 job category. The pay bands track the 12 bands used by the Bureau of Labor Statistics in the Occupation Employment statistics.
The covered employers referenced above also would be required to provide data regarding the total number of hours worked by both exempt and non-exempt employees. While employers should have this data readily available for non-exempt employees, who are paid by the hour, providing such data for exempt employees is more problematic, since such information is not usually maintained or reported by exempt employees. In light of this, the EEOC proposal gives employers the option of providing actual hours-worked data for exempt employees or reporting 40 hours per week for full-time exempt employees and 20 hours per week for part-time exempt employees.
So, what does this mean if you are a private employer with 100 or more employees?
The EEOC will be using this data to combat pay discrimination. While the summary information contained on the EEO-1 may not, in and of itself, provide sufficient information to allow the EEOC to bring a pay discrimination lawsuit on behalf of your employees, it could certainly be used to trigger requests for additional information. For this reason, covered employers should become familiar with the new pay data reporting requirements and take this opportunity to review their compensation structure to determine if they can adequately defend potential claims of pay disparity. An example of the proposed new EEO-1 form can be found here.
We are recommending that covered employers make a dry run in 2016 by using (but not filing) this form in early 2017 to see what their pay data would look like and what their explanation for any facial pay disparities would be in preparation for having to complete and file this form with the EEOC in March of 2018.
Interested members of the public also have until August 15, 2016 to provide comments on the revised proposal to the EEOC.
Please contact Karen Smith or any other member of our Labor & Employment Law Practice Group if you have any questions regarding this new pay data reporting requirement or need assistance with your early 2017 "dry run".