Category Archives: EEO-1 Reports

Update on the EEO-1 Pay Data Reporting

Contributed by Allison P. Sues, April 8, 2019

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On April 3, 2019, the EEOC informed a federal district court that the earliest it could complete its collection of pay data from covered employers as part of their EEO-1 data reporting obligations is September 30, 2019. The court still needs to rule on the EEOC’s proposed plan and, therefore, employers have not received a final deadline by which to file the required pay data. However, this filing brings employers one step closer to an answer for an issue that has caused them justified concern given the significant time and resources that will be needed to collect this pay data. 

Here is a quick refresher on the course of events that led up to the EEOC’s April 3 filing:

  • Since 1966, the EEOC has required covered employers to submit an Employer Information Report EEO-1 form, providing data on the number of individuals employed by job category, sex, race, and ethnicity (known as Component 1 of the EEO-1 report). More information on Component 1 reporting can be found in one of our previous blog posts.
  • In 2010, the EEOC commissioned a study to identify ways to improve prohibiting pay discrimination and found that there was potential value in collecting pay data in connection with the EEO-1 reports.
  • In order to collect this type of data, the EEOC needed approval from the Office of Management and Budget (OMB). In September 2016, the OMB approved the EEOC’s proposed collection of pay data (known as Component 2 of EEO-1 reports). Under this approval, employers would first be required to submit the required pay data by March 2018.
  • In August 2017, the OMB stayed the implementation of Component 2 of the EEO-1 reports, with instructions that employers still comply with Component 1 reporting requirements. 
  • In November 2017, two non-profit organizations that advocate for equal pay for women and Latino workers filed a lawsuit, National Women’s Law Center et al. v. OMB et al., challenging the stay in the U.S. District Court for the District of Columbia. 
  • In March 2019, the court vacated OMB’s stay of the Component 2 reporting requirement and provided that the OMB’s prior approval of the EEOC’s collection of pay data “shall be in effect.”
  • The court then asked the EEOC to propose how it would undertake and close the collection of pay data now that Component 2 requirements are back in effect. 

That brings us to the EEOC’s recent April 3 filing. The EEOC informed the court that its current data processes are not capable of collecting employers’ Component 2 data.  Instead, the EEOC will need to rely on an outside data and analytics contractor. The EEOC warned that an expedited collection of this pay data may produce poor quality data for the 2018 calendar year, and that quality concerns will be compounded if employers are also required to provide pay data for calendar year 2017. The court still needs to decide several unanswered questions, such as when employers need to submit their pay data, when the EEOC needs to complete its data collection, and whether employers need to submit pay data for 2017. Check back on this blog for updates.

In the meantime, all employers should ensure that they meet the May 31, 2019 deadline for providing Component 1 of the EEO-1 reports and begin the significant effort of preparing the pay data that will ultimately need to be submitted.   

Employers May Soon Be Required To Report Pay Information in Their EEO-1 Reports

Contributed by Debra Mastrian

Employers, including federal contractors, who are required to file annual Employer Information Reports (also known as EEO-1 reports) with the U.S. Equal Employment Opportunity Commission (EEOC) and the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP), may soon have additional reporting requirements. Currently, employers with more than 100 employees and certain federal contractors with 50-99 employees, have to report the number of full-time and part-time employees by sex, race, ethnicity and job category on their EEO-1 reports.

CashThe EEOC recently announced a revision to the EEO-1 report to add aggregate pay data on pay ranges and total hours worked for employers, including federal contractors, with 100 or more employees. Federal contractors with 50-99 employees would not report the aggregate pay data but would continue to report the other required information. The announcement was made on January 29, 2016 at the White House Equal Pay Event commemorating the anniversary of the Lilly Ledbetter Fair Pay Act. The Chair of that event noted that the EEOC has made equal pay a national priority.

The proposed revision was made after commissioning independent studies and gathering input from various sources. The EEOC and the OFCCP will use the information to detect pay discrimination and trends in occupations and industries. The federal agencies also believe the information will help employers assess their own pay practices.

The pay data would be based on employees’ W-2 earnings. For each of the defined EEO-1 job categories (Executive/Senior Level Officials and Managers, First/Mid-Level Officials and Managers, Professionals, Technicians, Service Workers, etc.), employers would have to include the number of employees by sex, race and ethnicity that fall in certain defined pay bands. In determining which pay band is appropriate, employers would use employees’ total W-2 earnings for a 12-month period looking backward from a pay period between July 1st and September 30th. The total number of hours worked by the employees in each pay band would also be reported.

The EEOC and OFCCP plan to develop statistical software to analyze the reported data. It is not yet clear what will be considered as a discriminatory pay practice. Perhaps most concerning to employers is that non-discriminatory factors (such as differences in experience or education) will not be reflected in any statistical analysis because, under the current proposed rule, there is no provision for collecting that information.

The proposed revision, which is available on the Federal Register website, was published on February 1 and is open for public comment through April 1. The EEOC will consider any public comments and hold a public hearing before publishing the final rule.  The final rule would take effect for the September 2017 EEO-1 reports.