No sooner did employers submit their 2016 EEO-1 filings, than a new EEO-1 form requiring more detailed information was approved by the EEOC.
Generally, federal contractors and private employers with 100 or more employees are required to complete the well-established EEO-1 report each year. Employers currently provide employment data that identifies by job category demographic information about race, gender and ethnicity. The revised EEO-1 form now requires that employers also provide the aggregate of employees’ pay, as reflected in Box 1 of W-2 forms, by job category and broken down by race, gender, and ethnicity.
The EEOC announced its original proposal on January 29, 2016. A public hearing was conducted on March 16, 2016, and public comment was available until April 1, 2016. Hundreds of public written comments were submitted expressing concerns with the revised form. Predominately, employers expressed concern with the burden imposed by the new reporting requirements, the potential for unwarranted inferences of discrimination based on newly compiled employment data, and the efficacy of the new data as it relates to protecting against discrimination. Ultimately, the EEOC was not persuaded and chose to move forward with the changes to the EEO-1 form. However, the timeline for filing future EEO-1 forms has now been extended until March 31, so employers can utilize prior year W-2s to provide the pay data.
The EEOC contends that this data will help to evaluate pay discrimination and potentially strengthen enforcement. Further, the aggregated data will help employers evaluate their own pay practices to determine potential differential treatment amongst protected classes. The EEOC aims to put all this data to work through new software and tools that will further aid enforcement.
Along with the new pay data by job category, other changes will be reflected in the revised EEO-1 form. First, the “workforce snapshot” will also change to any pay period between October 1 and December 31 of the reporting year. This means employers are free to choose any pay period during this time to calculate full and part-time employees for EEO-1 purposes. Additionally, hours worked must be collected so that the EEOC can account for part-time and partial year employment when they analyze EEO-1 pay data. Employers must now report the actual number of hours worked for non-exempt employees;, and for exempt employees, employers must report 20 hours per week for each part-time employee and 40 hours per week for each full time employee, or the actual number of hours worked by exempt employees.
The result is an EEO-1 form that morphed from two to eight pages in length and now contains 10 job categories and 12 pay bands for employers to navigate. Consequently, employers are forewarned that although 2016 filings were just completed, the time to prepare for next year is already upon you. Employers should (1) ensure they have the ability to adequately track these new categories of required data, (2) conduct a privileged review of the legal risks of their current pay practices to identify any potentially improper practices, (3) place existing employee positions within the 10 job categories and 12 pay bands as defined in revised EEO-1 form, and (4) determine how to report exempt workers’ hours.
This client alert is intended to inform clients and other interested parties about legal matters of current interest and is not intended as legal advice. If you have any questions regarding these issues, please contact your labor and employment counsel at Smith, Gambrell & Russell, LLP.