Pay equity drives new EEO-1 reporting requirement

Pay equity drives new EEO-1 reporting requirement

Bulletin Type: 
Benefit Bulletins

Starting in 2017, employers required to complete an EEO-1 form must also submit W-2 earnings and hours-worked data.

The EEO-1 form must be provided by private employers with 100 or more employees and certain federal contractors each year to the Equal Employment Opportunity Commission (EEOC). Today, employers submit data about employees’ ethnicity, race and gender by job category. The reporting deadline is September 30.

In the proposed rule, the EEOC explains W-2 data was selected as the preferred means to identify earnings because it “provides a more comprehensive report of earnings at the employee level.” The EEOC has proposed using pay bands to report W-2 data to limit employer burden. The “revised EEO-1 will collect aggregate W-2 data in 12 pay bands for the 10 EEO-1 job categories. Employers will simply count and report the number of employees in each pay band.” The EEOC states that this process will “allow the EEOC to compute within-job-category variation, across-job-category variation, and overall variation, which would support the EEOC’s ability to discern potential discrimination while preserving confidentiality.”

For hours worked, the EEOC “will collect the total number of hours worked by the employees included in each EEO-1 pay band cell.” The EEOC believes that this data will “allow analysis of pay differences while considering aggregate variation in hours.” The EEOC specifically stated that it is “not proposing to require an employer to begin collecting additional data on actual hours worked for salaried workers, to the extent that the employer does not currently maintain such information.” The EEOC is encouraging employer comment on this topic.

Employers who will be affected by this additional reporting requirement should consider how the earnings and hours-worked data will be collected. Additionally, a review of pay practices is advised prior to the 2017 reporting requirement to proactively identify potential areas of EEOC concern.