Friday, October 7, 2016

EEOC to Collect Summary Pay Data through Revised EEO-1 Report

Last week, the Equal Employment Opportunity Commission (EEOC) announced the approval of the new EEO-1 report form by the White House Office of Management and Budget (OMB). Beginning in March 2018, the EEOC will use the revised EEO-1 report to collect summary employee pay data from certain employers. Specifically, private employers with 100 or more employees are required to fill out the revised EEO-1 report on an annual basis. Federal contractors and subcontractors with 50-99 employees will not have to submit summary pay data, but they will continue to report demographic data annually on the EEO-1 report as before. Federal contractors and subcontractors with 49 or fewer employees will not be required to complete the EEO-1 report.

While the new EEO-1 report containing summary pay data is not due until March 31, 2018, the report will cover 2017 data. The report must be based on a "workforce snapshot period" of October 1, 2017, to December 31, 2017. Covered employers may choose to use any pay period during this three-month "workforce snapshot period" to count its full and part-time employees and gather pay data for purpose of the EEO-1 report. With respect to the chosen pay period, a covered employer must report the following:
  • The employer must report its total number of full-time and part-time employees by demographic categories in 12 pay bands listed for each of the EEO-1 job categories;
  • The employer must report employee pay data based on W-2 wages. Employers do not have to report individual pay or salaries, only aggregate data.
  • The employer is required to tally and report the total number of hours worked in the year by all the employees in each pay band. For non-exempt employees, employers are to consult employer records already required under the FLSA to identify and report the number of hours worked. For exempt employees, employers have a choice to either: (i) report 20 hours per week for each part-time employee and 40 hours per week for each full-time employee; or (ii) report actual number of hours worked by exempt employees, full- or part-time, if they prefer to do so.
The revised EEO-1 Report has been described as controversial. The EEOC is applauding the new report form as a way to improve its investigations into possible pay discrimination. But, employers have voiced significant concerns over the burden of complying with the new pay reporting requirements and a lack of reliability in the data to be collected given the reporting of aggregate data for the pay bands and job groupings. Nevertheless, with the approval of the new EEO-1 Report, covered employers will need to begin to prepare to collect the new data and evaluate any changes in their tracking or other practices that may be needed to comply with the new rules.


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