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EEOC Published Revisions to the EEO-1 Pay Collection Tool

2016-07-21

On July 13, 2016, EEOC published revisions to its proposal to collect pay data through the EEO-1 report.  The EEOC solicited feedback from the public regarding the proposed rule (published on February 1, 2016) and received over 300 comments.  On March 16, 2016 EEOC held a public hearing regarding the EEO-1 pay report where numerous concerns were addressed.  The revised proposal does not address some of these concerns, such as the burdens on employers for collecting the data and the usefulness of the data in identifying meaningful discriminatory pay disparities.
The proposal expanded the EEO-1 to require any business with 100 or more workers to provide detailed information about its pay practices to the federal government through the annual EEO-1 Report. The proposal included an obligation to report W-2 income and hours worked by job category, in addition to the currently required employee information. The stated purpose for collecting the additional pay data is to assist the agencies in identifying possible pay discrimination and assist employers in promoting equal pay in their workplaces.

New proposed changes:

  • The reporting “workforce snapshot” period will be moved from July through September to October through December, with a reporting deadline of March 31st. The change is intended to reduce the burden on employers by making it possible to use existing 2017 W-2 pay reports.
  • Employers are to report income provided in “Box 1” of the W-2 form, which includes wages, tips, and other compensation, but does not include pre-tax retirement and benefit deductions.  Keep in mind that this information may be skewed based on the amount of 401(k) contributions which could lead to the appearance of pay disparities even though it has no relationship with pay practices.
  • To report on “hours worked” for exempt employees, the final proposed rule gives employers the option to use: 1) proxy hours of 40 hours per week for full-time exempt employees and 20 hours per week for part-time exempt employees; or 2) provide actual hours if the employer tracks hours worked for exempt employees. 
There will be no changes in the 2016 EEO-1 collection and reporting requirements.  If approved, changes will take place in 2017, with a reporting deadline of March 31st.  The EEO-1 data for the 2017 year will be due on March 31, 2018.
The revised proposal can be viewed here and comments will be accepted through August 15, 2016.

More information about the proposed revisions to the EEO-1 report, including a Fact Sheet for Small Business and a Question & Answer document are available on EEOC’s website at www.eeoc.gov.  Comments should be submitted to the Office of Management and Budget (OMB). 

For more detail about the proposed EEO-1 report, read our previous press release here.  View the sample proposed EEO-1 report here.

How can Workplace Dynamics assist you in preparing for these changes?

Now that we know what to expect of the proposed 2017 EEO-1 report, we can conduct preliminary analyses by EEO-1 category so that you are prepared and have the opportunity to make any changes before reporting to the government.  If you wait until 2017 then you don’t have time to ramp-up to affect change.  Our report will provide a glimpse of what the government will see when they receive your data and will identify red flags for further investigation.

According to the Small Business Fact Sheet, “the EEO-1 pay data collection will provide a vehicle to enforce the law more effectively. The data will help the EEOC and OFCCP in investigations and compliance reviews. The agencies will consider EEO-1 data along with all other information obtained before concluding that discrimination occurred.”  OFCCP has been trying for years to come up with a “big” compensation case but they have not been successful in doing so.  Having the compensation data handed to them through the submission of the EEO-1 report will arm them with the ability to create compensation metrics, identify the worst offenders and then initiate compliance audits focused on compensation.

Currently, Workplace Dynamics prepares EEO-1 and VETS 4212 reporting for our clients as an add-on service and offering compensation preliminary analyses is an extension to our services.  Contact us for more information.