On September 29, the Equal Employment Opportunity Commission (EEOC) released the anticipated guidelines for the new 2017 Employer Information Report EEO-1 (also known as the EEO-1 Report). The changes expand the data employers are required to provide on the form. The new revision does not impact the 2016 EEO-1 Report, which is due on September 30, 2016.
Beginning in March 2018, private employers (including federal contractors and subcontractors) with 100 or more employees will be required to report calendar year 2017 information, and for the first time, summary pay data. In addition to the information that employers report today, the new forms request/require the number of hours employees work, W-2 wage data over a 12-month period, and require employers to classify employees in one of the 12 pay bands as an effort to easily identify pay disparities.
The new information is intended to improve investigations into gender, race, and ethnicity pay discrimination. As mentioned in the EEOC press release, U.S. Secretary of Labor Thomas E. Perez states “collecting data is a critical step in delivering on the promise of equal pay.” However, there are concerns of the accuracy of W-2 information reported, as wages may not always be an exact representation of equal pay. For example, if two employees holding the same position and equal pay are eligible for an annual bonus, but only one of the employee’s performance warrants the bonus, this will differentiate their W-2 pay data regardless of the fact that they are paid the same salary for the same role. Additionally, the new form imposes an additional administrative burden by reporting even more information.
Employers should start preparing now by assessing existing HRIS and payroll systems for reporting capabilities, revisit polices in place that define W-2 box 1 wages, and match positions to the EEO-1 job categories and pay bands.
The EEOC is offering free webinars for employers on October 20 and October 26, 2016.
For more information, please contact your Dean Dorton advisor or Jeff Ricketts at email@example.com.