Labor & Employment Law Blog

On January 28, 2016, the Equal Employment Opportunity Council (“EEOC”) and the White House unveiled plans to require employers with 100 or more employees to report employee pay data in September 2017 EEO-1 Reports in an effort to uncover potential pay discrimination.

The EEOC enforces the federal Equal Pay Act of 1963 and Title VII of the 1964 Civil Rights Act, among other laws.  The Equal Pay Act prohibits sex-based wage discrimination between men and women if they work in the same establishment and perform jobs that require substantially equal skill, effort, and responsibility under similar working conditions.  Section 709(c) of Title VII requires employers to collect and keep records relevant to the determination of whether unlawful employment practices have been or are being committed and to produce reports to the EEOC as prescribed.

The EEO-1 Report – formally known as the “Employer Information Report” – is a form requiring employers to provide a count of their employees by job category and then by ethnicity, race, and gender. The EEO-1 Report must be filed by employers who employ 100 or more employees, and employers with federal government contracts of $50,000 or more and 50 or more employees.  The EEO-1 Report must be filed annually with the EEOC by September 30.

Under the new proposal, beginning in September 2017, employers with 100 or more employees would be required to also collect, and provide to the EEOC, data on employees’ W-2 earnings and hours worked.  Employees with 50 to 99 employees will not be subject to the new requirement, but must continue to collect and report ethnicity, race, and sex data.

The EEOC purportedly tailored the reporting requirements to address employers’ concerns about additional time burdens in compiling the data as well as concerns regarding the maintenance of data confidentiality.  To reduce such burdens on employers, the EEOC claims to have tailored the proposed program to identify data that employers already collect such that the only additional time burden on employers will be reporting, not collection.  With regard to confidentiality, the EEOC stated that it will only publish aggregate data in a manner that does not reveal any particular employer’s data and protect the confidential information to the maximum extent possible under the Freedom of Information Act.

The EEOC proposes to use total W–2 earnings as the measure of pay and will require collection of the total number of hours worked by employees. However, the EEOC is not proposing to require employers to collect additional data on hours worked by exempt employees, to the extent that employers do not currently maintain such records.

The public comment period on the proposed procedure runs to April 1, 2016. The EEOC intends to finalize the reporting requirements by September 2016.  Employers which will be subject to the new pay data reporting requirements must ensure that employee data and human resources information systems are capable of compiling and reporting the data that will be required to be reported by the EEOC starting in 2017.