For employers who are required to file an annual EEO-1 report, beginning in March 2018, the EEOC will also require those employers to report various types of pay data on their employees. The new rule changes the scope of the data that must be reported, the timing of the data collection, and the reporting deadline.
Who is Affected?
Private employers with 100 or more employees (including federal contractors and subcontractors) will now be required to submit summary pay data in their annual Employer Information Report EEO-1 (in addition to the information about employees’ gender, race or ethnicity, and job category that the EEO-1 already covers). Federal contractors and subcontractors with 50-99 employees will not submit summary pay data but will continue to report demographic data (sex and race or ethnicity) on the EEO-1 as they did before. Federal contractors and subcontractors with 49 or fewer employees and companies without federal contracts with 99 or fewer employees will still not be required to complete the EEO-1 report.
What Has Changed?
The ten EEO-1 job categories in which employees are listed remain the same. However, the scope of the data reported in the EEO-1under each category will include two new elements – summary pay data and aggregate hours worked data. Summary pay data includes the total number of full-time and part-time employees in each of twelve pay bands (ranging from $19,239 and under to $208,000 and over) listed for each EEO-1 job category. No individual wages or salaries will be included. The information reported is based on earnings listed in employee W-2 forms to account for bonuses, overtime, and premium pay along with base pay. Aggregate hours worked data includes the total number of hours worked by all employees in each pay band. The reported data will also be categorized by gender and race or ethnicity – each pay band will specify how many men and women of each race or ethnicity fall into that band so that the EEOC can now see potential pay disparities based on gender and race or ethnicity.
The “workforce snapshot period” is now October 1 to December 31 to reflect same-year promotions that move employees into new pay bands. (Previously, the snapshot period was July 1 to September 30.) During this time, employers may choose any pay period to count employees for EEO-1 reporting purposes. Employers will report the aggregate number of hours worked by employees during the selected period in each pay band. For employees considered “exempt” under the Fair Labor Standards Act, employers may either report 40 hours per week for full-time exempt employees and 20 hours per week for part-time exempt employees or report actual hours worked. For non-exempt employees, employers will report actual hours worked. The hours on the EEO-1 report should match records maintained for wage and hour purposes.
Finally, the filing deadline has been changed from September 30 of the reporting year to March 31 following the reporting year to coincide with W-2 calculations and reporting periods. The first EEO-1 report to include the new pay data will be due on March 31, 2018 for the year 2017. The filing deadline will remain March 31 moving forward.
What This Means for You?
The EEOC states that the additional data collection will help with a first assessment of discrimination allegations and with planning an investigation. As a result, employers will likely be under increased scrutiny when allegations of discrimination are made. We also anticipate that the U.S. Department of Labor and plaintiffs’ counsel will take interest in the forms in the event of wage-and-hour issues. Therefore, if the reporting changes apply to you, take action now to ensure you comply with the EEOC’s new requirements and to ensure a smooth transition when you begin collecting data next year. Here are a few steps you can take:
- Determine whether your existing information systems can generate the newly required data regarding employees’ gender, race or ethnicity, and W-2 earnings.
- Select a “workforce snapshot” period between October 1 and December 31, 2017.
- Review the new EEO-1s with counsel to identify any potential pay disparities correlating to gender and race or ethnicity, and gather documentation on any relevant pay determinations in case a charge is made.
If you have any questions while making your preparations – such as clarifying how employees are categorized or addressing any possible pay disparities – give us a call. We’re happy to help.