On January 29, 2016, the Equal Employment Opportunity Commission (EEOC) announced plans to revise the annual EEO-1 report; which will include pay data by gender, race and ethnicity. This proposed revision to the Employer Information Report (EEO-1) will require employers will 100 or more employees, including federal contractors to collect and report pay data annually.
It is anticipated that employers will first be required to submit collected Pay Data for the 2017 reporting cycle, which must be reported by September 30, 2017. However, employers would be required to collect pay data in 2016, because the data would be required to be collected from a prior 12 month period that begins between July 1 and September 30.
The EEOC and the Office of Federal Contract Compliance Programs (OFCCP) at the DOL are working jointly to improve enforcement and compliance with federal pay discrimination laws. This EEOC proposal is an expansion and replacement of a prior proposal under Executive Order 11246 to collect similar pay data from federal contractors.
Current EEO-1 Report Requirements:
Today’s EEO-1 Report requires some employers to annually report, by September 30th, the number of individuals by the employment job category as well as by race, ethnicity and sex. The employers that must report currently are:
-Certain federal contractors with 50-99 employees
-Private employers with 100 or more employees
The data these employers are currently required to report, include seven race and ethnicity categories and ten job categories, by sex:
-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).
-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.
Proposed EEO-1 Report Requirements:
Under the revised EEO-1 Report, some employers would also have additional reporting requirements and would be required to collect and submit pay data in their annual report. Employers who would be required to submit pay data are:
-Employers with 100 or more employees would submit data about pay
-Federal contractors with 100 or more employees would submit data about pay
Employers that will not be required to submit pay data included:
-Federal contractors with 50-99 employees, but these employers would continue to report ethnicity, race, and sex by job category
-Non-contractor employers with 1-99 employees and federal contractors with 1-49 employees would not be required to file the EEO-1 report
The additional data these employers would be required to submit on the revised EEO-1 Report, would be collected from W-2 wage data. The W-2 wages would be reported in “pay band” and employers would not be required to report individual salaries or calculate salary averages:
-Employers would tally and report the number of employees whose W-2 pay for 12 months was in each pay band
-There would be 12 pay bands for each EEO-1 job category:
(1) $19,239 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
-The report would show the number of employees whose total W-2 pay for the 12 months prior to the employer’s EEO-1 pay period fell into each pay band:
-Employers would identify employees’ total W-2 earnings for a 12-month period looking back from any pay period between July 1st and September 30th of each reporting year. For example, an employer could use W-2 data for the 12 months looking back from the second pay period in July of the reporting year
-Then, an employer would report the number of workers in that pay band. For example, it would report that it has 15 African American women whose total W-2 earnings for the last 12 months are in pay band 4 ($30,680-$38,999) for the “Laborers and Helpers” job category
-To show part-time and partial-year employment, the EEO-1 also would tally the total number of hours worked by the employees counted in each pay band over the last 12 months. This accounts for part-time or partial-year employment. For example, an employer would report that total hours worked for 10 African American men who are Craft Workers in the second pay band ($19,240-$24,439) is 10,000 hours
Employers who would be required to report this new data, should become familiar will the revisions now; to view a sample of the proposed EEO-1 form at: http://www.eeoc.gov/employers/eeo1survey/2016_new_survey.cfm.
The EEOC has also prepared Q&A page to address common questions about the proposed revisions and are available for viewing at: http://www.eeoc.gov/employers/eeo1survey/2016_eeo-1_proposed_changes_qa.cfm.
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This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.