The Equal Employment Opportunity Commission (EEOC), following its coordination with the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP), will publish in the Federal Register on February 1, 2016, a proposal to modify the EEO-1 employee information report, and add a component collecting data on W2 compensation and on hours worked. Currently, EEOC collects data on race, ethnicity, and sex, broken down by its designated job categories. This new proposal will impact private employers with at least 100 employees, and federal contractors with at least 50 employees. These changes, if finalized, would take effect in the 2017 EEO-1 reporting cycle. Employers will have 60 days (or until April 1, 2016) to submit comments on the proposal.
EEOC’s proposal will not require reporting of individuals’ pay rates or hours worked, but instead will collect pay and hours worked in aggregate form, and will maintain existing confidentiality protections. Pay data will be reported in 12 pay bands (e.g., pay band 5 is $39,000 - $49,919), and by race, ethnicity, sex, and job category (e.g., 13 black female professionals in pay band 5). EEOC does not exactly know yet how it’s going to collect all hours worked data, because it does not know what to do about salaried employees, so it is seeking employer input on that issue in particular. For hourly workers, it would collect total hours worked in the pay band for that job category, race, ethnicity, and sex. An example in EEOC’s small business fact sheet provides as follows: “[A]n employer would report that total hours worked for 10 African American men who are Craft Workers in the second pay band ($19,240-$24,439) is 10,000 hours.”
EEOC will collect W2 compensation data for 12 months prior to the reporting period—the same July to September time frame as operates under the existing EEO-1. EEOC recognizes that W2 data is typically gathered at the end of the year, and not during the July to September EEO-1 data-collection period, but it wants to capture W2 data because that includes the most different kinds of compensation, and EEOC’s prior research suggests that many employers use many types of incentive or other compensation (tips, bonuses, commissions) that would not be captured by collecting just hourly wage or salary data. According to EEOC, given the prevalence of data in HRIS systems, most employers should have ready access to this information, and if not, the cost of system modification to capture the data will not be onerous.
Among the “benefits” EEOC touts about the new reporting procedure will be the ability of employers to evaluate their pay practices across the areas EEOC and OFCCP enforce. If EEOC is asking employers to collect and report data, one question is whether it will expect employers to evaluate the data, and look unfavorably on those who do not when evaluating compliance during investigations. Setting aside the logistical challenges associated with collecting and reporting pay and hours worked data, the important point is that EEOC (and OFCCP) are joining the broad efforts by the federal government to increase the amount of pay information available to employees, to challenge employers’ practices of keeping that pay information confidential, and to focus enforcement efforts on pay discrepancies in the workplace. Given these efforts, employers should be taking a look at their pay practices sooner rather than later.
Click to view EEOC’s proposal in the Federal Register.