On January 29, 2016, in conjunction with the seventh anniversary of the Lily Ledbetter Fair Pay Act, the U.S. Equal Employment Opportunity Commission (EEOC) proposed sweeping changes to the Employer Information Report (EEO-1) in an effort to target and enforce pay equity discrimination in the workforce. These changes will impact private sector employers and federal contractors that have 100 or more employees.
CURRENT EEO-1 REPORT
The current EEO-1 directs certain federal contractors with 50-99 employees and other private employers with 100 or more employees to report annually, by September 30th, the number of individuals they employ by job category and by race, ethnicity and sex. The data include seven race and ethnicity categories and ten job categories, by sex.
- The ten EEO-1 job categories are: Executive/Senior Level Officials and Managers; First/Mid Level Officials and Managers; Professionals; Technicians; Sales Workers; Administrative Support Workers; Craft Workers; Operatives; Laborers and Helpers; Service Workers.
- The seven race and ethnicity groups are: Hispanic or Latino, White (Not Hispanic or Latino); Black or African American (Not Hispanic or Latino); Native Hawaiian or Other Pacific Islander (Not Hispanic or Latino); Asian (Not Hispanic or Latino); American Indian or Alaska Native (Not Hispanic or Latino); and Two or More Races (Not Hispanic or Latino).
PROPOSED EEO-1 REPORT
Beginning in 2017, if the proposed EEO-1 Report is approved in its current form, employers with 100 or more employees would be required to submit detailed pay data, including employees' total W-2 earnings (which includes commissions, tips, taxable fringe benefits and bonuses) for a 12-month period looking back from a pay period between July 1st and September 30th, and their total hours worked based on newly-established “pay bands.” Specifically, for each of the EEO-1 job categories, the proposed EEO-1 would have 12 pay bands. Employers would tabulate and report the number of employees whose W-2 earnings for the prior 12 months fell within each pay band. The pay bands track the 12 pay bands used by the Bureau of Labor Statistics in the Occupation Employment Statistics survey:
(1) $19,239 and under; (2) $19,240 - $24,439; (3) $24,440 - $30,679; (4) $30,680 - $38,999; (5) $39,000 - $49,919; (6) $49,920 - $62,919; (7) $62,920 - $80,079; (8) $80,080 - $101,919; (9) $101,920 - $128,959; (10) $128,960 - $163,799; (11) $163,800 - $207,999; and (12) $208,000 and over.
For example, an employer would report on the EEO-1 that it employs 10 African American men who are Craft Workers in the second pay band ($19,240-$24,439), and that their total hours worked was 10,000 hours. The EEOC believes this new data will assist it in identifying possible pay discrimination and assist employers in promoting equal pay in their workplaces.
The proposed revisions to the EEO-1 report will published on February 1, 2016 and subject to comment until April 1, 2016. Without question, with Fair Labor Standards Act litigation at an all-time high, employers can expect a deluge of class litigation under the Equal Pay Act. Assuming no changes are made, employers should begin preparing for pay disparity self-audits prior to 2017 to avoid potential scrutiny from the EEOC, OFCCP or enterprising plaintiffs’ attorneys.
Contact our attorneys for information about conducting a privileged pay equity audit.