Overview. As previously reported, in January 2016, the EEOC first announced proposed changes to the EEO-1 report that would require certain employers to report pay data and hours. Taking into account the public comments provided by employers on the EEOC's initially proposed changes, the EEOC has issued a revised proposal. Comments to the latest proposal must be submitted by August 15, 2016.
The new version of the regulations requires employers with at least 100 employees to submit to the EEOC all employees' W-2 earnings data and actual hours worked, with the first set of reports containing this additional information to be filed in March of 2018. This means there will be no reports filed during the September 2017 reporting cycle. The reporting period for 2015, would remain unchanged -- with reports being due by September 30, 2016.
Effective Date. If published in final, the regulations will require covered employers to use the new Report, and provide wage and hours-worked data by March 2018. The wage data provided will be as reflected on the employee's W-2 form the prior year (calendar year 2017). To the extent you are not already doing so, you should begin accurately tracking hours worked starting January 1, 2017.
Details.
Which Employers Would Be Covered? The EEOC considered comments urging that smaller employers be exempt from the pay reporting requirement but has continued to make the proposed rule applicable to all employers with at least 100 employees. However, this does exempt a contingent of Federal Contractors with more than 50 but less than 100 who are currently required to report.
When Will the Pay Disclosures Be Required? As revised, the proposal would change the EEO-1 filing deadline from September 30 of every year to March 31st of every year. It also proposes to change the pay period snapshot that is reported on from the current July to September range, to a pay period that falls between October 1st and December 31st prior to the reporting year.
What Additional Data Will Be Reported? Covered employers will now be required to report employees earnings and Hours Worked as follows:
Earnings:
The EEOC continues to propose to have employers report W-2 earnings as the "measure of pay" for the new pay data collection report. What is different with this second proposal is that the 12 month period proposed for reporting would be the prior calendar year, not 12 months back from the "snapshot" pay period an employer chooses to report on, as initially proposed. Employers will use Box 1 of the Form W-2 to complete their EEO-1 filings.
Hours Worked:
The EEOC also continues to proposes to have employers report "hours worked" as a component of the revised EEO-1 form, stating "collecting hours worked is of central importance" to assessing pay disparities. The EEOC proposes to adopt the Fair Labor Standards Act's definition of "hours worked" for non-exempt employees.
The commission provides two options for employers to report hours worked for exempt employees:
1. A proxy of 40 hours a week for full-time exempt employees or 20 hours for part-time exempt employees; or
2. Actual hours worked if the employer already maintains accurate records of this information.
As with earnings, the hours worked to be reported will be those for the entire calendar year ending the December 31 prior to the reporting deadline.
How Will the Pay Data Be Used? The revised proposal explains the collected pay data will be used in the following ways:
1. Early assessment of Charges of Discrimination.
2. EEOC Publication of Reports on Pay Disparities based on analysis of aggregation of collected pay data by:
- Race
- Sex
- Industry
- Occupational groupings
- Metropolitan Statistical Area (MSA)
3. EEOC Training on how pay data can "improve the agency's enforcement work".
Will the Confidentiality of Pay Data Be Protected? The revised proposal goes into detail about how the agency will protect the confidentiality of the pay data collected, including the process for protection under FOIA and Title VII confidentiality provisions, as well as outlining internal protocols for protection of the data. The publication also notes the Office of Federal Contract Compliance Programs (OFCCP) will obtain the EEO-1 reports for federal contractors through the Joint Reporting Committee and explains OFCCP's use of the FOIA process to notify contractors of requests for their EEO-1 pay data. The EEOC states, "OFCCP will protect the confidentiality of EEO-1 pay and hours-worked data to the maximum extent possible consistent of FOIA."
Produced in cooperation with Jackson Lewis, P.C.