On Friday, January 29, 2016 the EEOC made an announcement proposing a revision to the EEO-1 Report that would require employers to report to the federal government the number of hours worked and summary pay (that will be grouped in “pay bands” established by the EEOC) broken down by gender, ethnicity and race. The additional data collected will be used to assist the EEOC in detecting potential pay discrimination and promote pay equality in the workplace. The OFCCP and EEOC would have joint access to the W-2 payroll information provided by employers and use this data to conduct statistical tests to identify pay disparities within a company. This information could be used for enforcement purposes.This announcement comes on the anniversary of the Lilly Ledbetter Fair Pay Act, the first Act signed by President Obama in back in 2009. During the past several years, under Obama’s guidance, the OFCCP and EEOC have separately pursued the development of compensation data collection tools that would require employers to annually submit employee pay data. The agency believes that the revised EEO-1 report will help employers “facilitate voluntary compliance” with regard to equal pay.
What Employers Need to Know:
While the EEOC’s intentions are to address pay discrimination and pay gap issues, the results of the aggregated data on the EEO-1 report will never reflect the true picture with regard to compensation disparities between individual employees. Additionally, there are issues that need to be addressed before the new EEO-1 report is implemented, including privacy concerns and the protection of data.The proposed collection of W-2 information is concerning, especially following the Office of Personnel Management’s massive data breach that compromised sensitive personal information of over 22 million people, including Social Security numbers. This type of data collection would be a massive undertaking for all employers in terms of the time it will take to gather the information and file it. The current EEO-1 Report contains a total of 180 fields, the new form would have over 1,000 fields. Employers need to consider preparing for these changes prior to the proposed revision going into effect.
- Employers that have 100 or more employees and federal contractors with 50 or more employees will be required to comply with the new reporting requirements
- The proposed rule will begin with the filing of the September 2017 EEO-1 Reports
- Companies need to ensure that they are assigning accurate EEO categories to each of their job titles in order to avoid being potentially targeted for a pay disparity investigation
- Ensure that your HRIS system is up to the task
- The EEOC will be using this added information to “focus agency investigations, assess discrimination complaints, and identify existing pay disparities that may warrant further examination,” (EEOC Press Release).
Employers can view the proposed changes to the EEO-1 Report in the Federal Register that was officially published on February 1, 2016. The Federal Register will be open for comment between February 1, 2016 and April 1, 2016 (60 days). If you have any questions or concerns about the proposed rule on data collection, contact Career Resources, Inc. at email@example.com. Career Resources, Inc.