On February 1, 2016, the Equal Employment Opportunity Commission (“EEOC”) proposed to collect wage data on its EEO-1 Report from employers with 100 or more employees. Currently, federal contractors with at least 50 employees and employers with 100 or more employees are required annually to submit EEO-1 Reports, which collect data by job category about employees’ race, ethnicity, and sex.
The EEOC proposes to expand the EEO-1 reporting requirement to include data on employees’ W-2 earnings and hours worked. The stated purpose for this change is to use the data to study wage discrepancies for purposes of equal pay issues. The EEOC has stated that that data may be used in the future to “assess complaints of discrimination, focus investigations, and identify employers with existing pay disparities that might warrant further examination.” The EEOC contends that the additional data to be reported should not provide a substantial additional burden on employers, because it is information employers currently collect and maintain.
For 2016, all employers who file EEO-1 Reports would continue to provide only the data currently required. Beginning in 2017, employers with 100 or more employees would be required to provide wage and hour data in addition to data already required. Federal contractors with 50 to 99 employees would submit only the data currently required, with no wage and hour data.
EEO-1 Reports would continue to be due no later than September 30 of each year. However, beginning in 2017, all submissions would be required to be made electronically, although exemptions may be sought.
In seeking to have employers report W-2 earnings, the EEOC sought to identify a measurement of compensation that was as inclusive as possible of all remuneration paid to individuals. The EEOC noted that W-2 gross income includes “wages, salaries, fees, commissions, tips, taxable fringe benefits, and elective deferrals.” It also includes amounts withheld for taxes, as well as supplemental pay components, including “overtime pay, shift differentials, and nonproduction bonuses (e.g., year-end bonuses, hiring and referral bonuses, and profit-sharing cash bonuses).”
Employers would be required to collect appropriate W-2 data in twelve pay bands for ten EEO-1 job categories. This will enable the EEOC to track variations within job categories, variations across job categories, and overall variations. While the EEOC will be able to use this data to compare wages between protected groups, the information collected will not provide the EEOC with data that might explain any discrepancies, such as merit differentials or differences in experience levels.
The proposed revised EEO-1 Report would require reporting of total hours worked by employees in each pay band. The EEOC is seeking employer input as to how hours worked should be reported for salaried employees. The EEOC is not proposing to require employers to collect data not already collected for other employment law purposes.
The EEOC believes that the new requirements will have a minimal burden on employers. The EEOC is soliciting comments that will allow it to: (1) evaluate whether the new data is necessary for the EEOC’s functions and whether it will have a practical utility; (2) improve the accuracy of the EEOC’s estimate of the burden the collection will impose on employers; (3) enhance the quality, utility, and clarity of information collected; and (4) minimize the burden on employers required to submit information.
Comments may be made until April 1, 2016 at www.regulations.gov or in hard copy to Bernadette Wilson, Acting Executive Officer, Executive Secretariat, EEOC, 131 M Street, N.E., Washington, D.C. 20507. Comments of six pages or less may be faxed to (202) 663-4114.
If the proposal is approved, the EEOC will post a notice of approval on its website, and will notify current EEO-1 Report filers as well.
If you have any questions about this or any other employment or labor law issue, please contact Whitney Rahman at (717) 509-7237 or email@example.com.