By Susan Schoenfeld, JD, Senior Legal Editor

The Equal Employment Opportunity Commission (EEOC) and the U.S. Department of Labor (DOL) recently published a proposal to revise the Equal Opportunity Report (EEO-1) reporting form in order to annually collect summary pay data by gender, race, and ethnicity from businesses with 100 or more employees. A copy of the proposed form is available on EEOC’s website.

Proposed revisions to EEO-1

The proposed revisions would require employers with 100 or more employees to submit an annual report on pay data as part of EEO-1 reporting beginning in September 2017. The proposed revisions to the EEO-1 report and request for comments were published in the Federal Register on February 1, 2016, with all comments from the public due by April 1, 2016.

EEOC’s proposal would revise the EEO-1 report in the following ways:

• The EEO-1 report would be used to collect W-2 compensation and hours-worked data by pay band for employers that have 100 or more employees beginning with the 2017 report.
• The pay data would be grouped in 12 pay bands, at the same pay intervals the U.S. Bureau of Labor Statistics (BLS) uses in its Occupational Employment Statistics survey.
• The new data will assist the EEOC in identifying possible pay discrimination and assist employers in promoting equal pay in their workplaces.

Federal contractors with 50 to 99 employees would not report pay data, but they would report ethnicity, race, and sex by job category as they do now.

A sample of the proposed EEO-1 is available here.

Pay bands

Under EEOC’s proposed changes to the EEO-1, covered employers would report W-2 pay in “pay bands”. By using pay bands, employers would not be forced to report individual pay, thus protecting employees’ privacy. The pay bands would track the 12 pay bands used by the BLS, ranging from less than $19,239 to $208,000 and over.

The proposed changes to the EEO-1 would require employers to report the number of employees whose total W-2 pay for the 12 months prior to the employer’s EEO-1 pay period fell into each pay band. Employers would identify employees’ total W-2 earnings for a 12-month period looking back from any pay period between July 1st and September 30th of each reporting year.

According to the EEOC, the proposed EEO-1 will take into account part-time or partial-year employment in analyzing rates of pay. The proposed EEO-1 would report hours worked as well as data about W-2 earnings. This would allow the EEOC and OFCCP to take into account periods of time when employees were not employed, such as when an employee worked part time or for less than the entire year.

For each pay band on the proposed EEO-1, the employer would report the total number of hours worked by the employees counted in that pay band for the last 12-month period by their ethnicity, race, and sex. 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.

Goodbye equal pay report

The proposed EEO-1 revisions would replace a controversial and highly criticized notice of proposed rulemaking published by the OFCCP that would have required covered federal contractors and subcontractors with 100 or more employees and a federal contract, subcontract, or purchase order of at least 30 days and $50,000 or more to submit an annual Equal Pay Report as part of the EEO-1 reporting on various aspects of the contractors’ compensation structure.

OFCCP’s proposed Equal Pay Report would have required contractors to provide summary information on compensation paid to employees from the Form W-2 by sex, race, ethnicity, and specified job categories as well as hours worked and the total number of employees in the contractor’s workforce.

Expert weighs in

According to Rebecca Bernhard, a labor and employment attorney at the international law firm Dorsey & Whitney LLP, the proposed EEO-1 change “significantly increases the reporting burdens on employers with over 100 employees and provides the EEOC and the OFCCP with access to payroll data typically not subject to such reporting requirements in the absence of a federal contract.”

With regard to contractors, Bernhard notes, “[F]ederal contractors already have been required to produce compensation data during OFCCP audits; this proposed rule would apply that requirement across the board to all employers with over 100 employees, not just federal contractors. And it would add to the federal contractors’ obligations for reporting such information, even when the employer is not being audited.”

BLR® will be following and reporting on any developments on the proposed changes in future articles.