The updated EEO-1 reporting will provide data for the EEOC—and private plaintiffs’ attorneys—to assess the equity of employer pay systems. Affected employers have until September 30, 2017 to file the first updated EE01-report.
What is the proposed rule? Under the proposed rule, reports must be filed with the EEOC on a revised EEO-1 form by almost all non-governmental employers with 100+ employees, broken down by sex and race-ethnicity, providing data on all employees’ pay and hours worked for each government recognized “category” of job.
When do we have to file the report? The comment period ends in April 2016, but the regulations are not set to take effect until September 30, 2017 (the “usual” EEO-1 filing deadline). However, as noted below, there are several recommended actions to take well in advance of the reporting deadline.
Enterprise-wide filing. Entities that have 100 or more employees or are affiliated via common ownership/management with such companies are required to file. Companies with many affiliates will be able to file an enterprise-wide EEO-1.
Pay bands. The pay bands start with what is essentially a minimum wage job (approximately $19,000.00 per year) and end with any job paying $208,000.00 or more per year.
Job categories. There are nine job categories on the proposed EEO-1, which are the same as the current EEO-1.
Problem in reporting “hours worked” for exempt employees. In addition to the administrative burdens created by the reporting requirement, the form itself contains questions about hours worked that will be very difficult for most employers to answer regarding their exempt workforce. Because the Department of Labor does not require exempt employees to record their actual hours worked, the EEO-1’s questions regarding “hours worked” for exempt employees is problematic for employers that don’t require exempt employees to report their hours worked. The EEOC has recognized that the hours reporting requirement for exempt employees is an area of concern and has asked for comments before the April 2016 comment deadline on how best to account for hours for exempt employees.
Recommendations for compliance. Employers should consider taking the following steps well in advance of the September 2017 deadline, so that if any issues are identified, they can be resolved before the required reporting is due on September 30, 2017:
(1) ensure that employees are classified in the correct job category so that the EEO-1 will reflect an appropriate pool for comparison;
(2) update job descriptions as needed to reflect that certain jobs within a category command a higher pay rate;
(3) self-audit (or hire counsel to audit if potential attorney-client privilege protection is desired) and perform statistical analysis of the audit results;
(4) review any disparities in pay between men/women and Caucasian/racial-ethnic minority employees to determine if they are based on objective and job-related factors; and
(5) make any prudent “catch-up” pay adjustments before the reporting deadline.
If you have any questions about the proposed rule or wish to discuss a pre-deadline review of your job categories/job descriptions or an internal audit, please contact your JW employment attorney or Paula Denney at 713.752.4332 or pdenney@jw.com.