EEOC’s New Reporting Requirements May Add to Employers’ Burden, Liability
On February 1, 2016, the Equal Employment Opportunity Commission (EEOC) announced plans to expand EEO-1 reporting requirements, beginning in 2017, to include compensation information for employers of 100 or more employees. The proposal is concerning because of the added burden to employers, the risk of jeopardizing confidentiality of pay data and the potential liability risk. The proposal mentions using the pay data to identify employers with pay disparities that may warrant further examination. Further, the EEOC and OFCCP plan to develop statistical tools that will be available to staff to analyze an employer’s pay data. Should this proposal move forward, employers that are not already doing so should consider a privileged compensation analysis to identify potential disparities.
Additional Reporting Requirements
Currently, the EEO-1 report requires covered employers (private employers with (i) 100 or more employees, or (ii) with 50 or more employees and a prime or first tier federal contract of $50,000 or more) to annually report the number of individuals that they employ by job category, race, ethnicity and sex. The new proposal requires employers with 100 or more employees to also submit pay and hours information. The proposed regulations require submission of W-2 pay data, which includes all earned income such as commissions, bonuses and overtime. The W-2 pay data is to be submitted in incremental “bands” ranging from Band 1 ($19,239 and under) through Band 12 ($208,000 and over).
In addition to W-2 pay, data regarding hours worked is required. The proposal suggests reporting estimated hours for exempt employees, such as 40 hours per week for full-time, but encourages employers to comment on this issue in particular.
The EEOC is accepting written comments on the proposal until April 1, 2016, in any one of three ways: (1) online at www.regulations.gov; (2) via hard copy addressed to Bernadette Wilson, Acting Executive Officer, Equal Opportunity Commission, 131 M Street NE., Washington, DC 20507; or (3) via facsimile to (202) 663-4114, for documents totaling six pages or fewer.
The Commission’s stated goal is to complete the rulemaking process by September 2016, with September 2017 looming as the first time that covered employees would be required to submit the additional information on their EEO-1s. We will continue to monitor the rulemaking process for you.