On February 1, 2016, as employers wrapped up employee W-2s for the year, the U.S. Equal Employment Opportunity Commission (EEOC) published proposed additions to EEO-1 data reporting for employers. In a joint effort with the Department of Labor and Office of Federal Contract Compliance Program (OFCCP), the EEOC seeks to gather employee wage data to assist with prevention of pay discrimination and enforcement of anti-discrimination laws. According to the EEOC, the proposal is based on its work with the President’s National Equal Pay Task Force and recommendations from various studies, including a National Academy of Sciences report, an EEOC Pilot Study, and work groups.
Under federal law, the EEOC and OFCCP require data collection by many private employers and federal contractors, submitted annually through the EEO-1. Currently, certain employers are required to report employee data based on sex, seven race and ethnicity categories, and ten job categories. Among other things, the proposal seeks to require private employers, with 100 or more employees, to collect and report data on employee W-2 earnings and hours worked. Under the proposed rule, Employers would need to identify the number of employees by ethnicity, race and gender whose earnings fall within the twelve specific pay bands. This information would then be used for aggregated data for statistical analysis by the EEOC and OFCCP. The EEOC and OFCCP are hopeful that the data will aide in employer self-monitoring and voluntary compliance in addressing pay inequities.
The OFCCP previously sought to collect wage data from federal contractors under a 2014 proposal. Public comments on the 2014 proposal flagged a lack of agency coordination, the burden of compensation data reporting, as well as privacy and confidentiality concerns.
The EEOC and OFCCP claim that the proposed reporting would pose minimal burden on employers because the requested data is “pay data that employers maintain in the normal course of business,” referencing employees’ W-2s and hours worked. Employers, however, will likely view the proposed requirements in a different light. The EEOC claims that this new data collection should be relatively easy for employers to retrieve due to the availability of software, but that’s yet to be seen. And, employers typically do not keep track of hours worked for non-exempt employees. As such, it is not clear how such information would be reported. The proposal will also likely be viewed as excessively intrusive into private employers’ business information. Finally, employers may also have concerns about confidentiality.
Should the proposal result in a final enforceable rule, it would not go into effect until the 2017 EEO-1 reporting cycle. The proposal is available here for review and public comments until April 1, 2016.