Feb 09, 2016

Proposed Additional Requirements for the Annual EEO-1 Reports

On February 1, 2016, the EEOC published a proposed revision to the Employer Information Report (EEO-1) to require employers with 100 employees or more (both private businesses and federal contractors) to submit data on employees’ W-2 earnings and hours worked.

Currently, the EEO-1 directs certain covered employers with more than 50 employees (federal contractors) or 100 employees (private businesses) to report annually the number of individuals they employ by job category and by race, ethnicity, and sex.  A sample of the current EEO-1 form can be found here.  Under the proposed revision, the EEO-1 would also collect aggregate W-2 data in 12 pay bands for the 10 EEO-1 job categories from employers with 100 employees or more.  For example, a filer will report on the EEO-1 that it employs three African-American women as professionals in the highest pay band.  The stated justification for the use of pay bands is that it allows the EEOC to compute within-job-category variation, across-job-category variation, and overall variation.

The EEOC estimates that 60,886 employers would be required to submit data regarding W-2 earnings and hours worked.  The estimated cost of implementation in 2017 is less than $400 with annual costs dropping to less than $100 annually in 2018.  Employer representatives have already expressed concerns that the EEOC’s estimates grossly underestimate the cost of this additional reporting obligation on employers.  Also of concern are outstanding issues of data privacy and false positives created because the pay data does not account for seniority, level of responsibility, and education.

The EEOC is accepting public comment on the utility and burden of collecting pay and hours-worked data through the EEO-1 data collection process on the Federal Register through April 1, 2016.

If you have any questions regarding the issues raised in this client alert, please contact your labor and employment counsel at Smith, Gambrell & Russell, LLP.

This client alert is intended to inform clients and other interested parties about legal matters of current interest and is not intended as legal advice.

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