Updated EEO-1 goal is to improve EEOC investigations into pay discrimination
On September 29, 2016, the Equal Employment Opportunity Commission (EEOC) released an updated EEO-1 reporting form. The new version of the form now includes added fields that require employers with over 100 employees to provide employee pay data. The intent of the new additions to the form is to improve EEOC investigations into pay discrimination based on gender, race and ethnicity. Covered employers will need to begin reporting in March 2018.
Covered Employers
With some exceptions, private employers with 100 or more employees and federal contractors with 50 or more employees must complete an EEO-1 report each year.
Covered employers already provide demographic information on the form regarding the gender, race and ethnicity of employees by job category. The revised form now also asks for data about employees' pay as reflected in box 1 of their W-2 forms.
Deadlines
The changes to the form will not affect 2016 reports, which must be filed by September 30. The new information must be provided in the 2017 form, and to give employers time to collect that data, the deadline for 2017 will be extended by six months to March 31, 2018.
Burdensome Data Collection
Changes to the EEO-1 form are just another of several changes to federal reports and forms and a shift to electronic filing for employers. According to the EEOC, the new requirement is intended to help decrease pay disparities based on gender, race or ethnicity. The EEOC will use the collected data to help it investigate and identify unlawful pay discrimination. Employers can interpret that the EEOC is sending a strong signal that it intends to increase its enforcement efforts by collecting this additional pay data.
Of course any changes to compliance reporting usually create additional administrative burdens for employers. Even HR departments that have implemented employee records systems or an HRIS to house and retain demographic data about employees' race and gender may not necessarily communicate with payroll or time-keeping systems. It will be important for employers to ensure that they have systems in place to collect the required data. OnePoint’s seamless HCM solution and flexible reporting engine prepares the existing EEO-1 report and can be configured to bring pay data into the custom report for easier analysis and audit.
Prepare Now
Over the past 36 months there has been increased research and media attention on pay discrepancy, especially pertaining to gender and ethnicity. "Collecting pay data is a significant step forward in addressing discriminatory pay practices," said EEOC Chair Jenny Yang.
Employers should consider conducting self-audits for 2016 based on the “workforce snapshot period" July 1 to September 30. This will help determine whether there appears to be any pay disparities that the organization will need to address beyond those that cannot be explained by legitimate business factors.
Here are some other steps employers should take now to get ready for filing the new report and defending their pay decisions:
- Assess existing HRIS and payroll systems to ensure that they can generate the necessary reports.
- Meet with outside vendors to make sure they understand the new requirements.
- Identify or develop policies that explain how employees earn overtime, bonuses, commissions and other components of W-2 box 1 wages.
- Put systems in place to readily retrieve data regarding benefits choices employees make, because these choices can significantly affect W-2 income.
- Identify job titles in each of the 10 EE0-1 job categories and analyze job descriptions to ensure they are accurate and will support pay decisions that reflect different job responsibilities.
- Identify any existing pay bands that your company uses and map them to the new pay bands on the EEO-1 form.
- Determine how to report hours worked for exempt employees.
