The U.S. Equal Employment Opportunity Commission (EEOC) enforces federal laws against employment discrimination. The agency also works to prevent discrimination before it occurs through outreach, education, and technical assistance programs.
Many of the laws enforced by the EEOC cover employers with at least 15 employees. The Age Discrimination in Employment Act, however, applies to companies with at least 20 employees, and the Equal Pay Act covers virtually all employers. Most of the laws enforced by the EEOC apply to labor unions and employment agencies. Certain laws apply only to the federal sector.
Laws enforced by the EEOC apply to all aspects of employment, including but not limited to:
- Wages; and
State and/or local employment discrimination laws may also apply to your business.
Of recent interest to many employers is the EEO-1 Report, a survey mandated by federal regulations. The survey requires certain employers to report on the members of its workforce by race/ethnicity, gender, within 10 job categories, and beginning in 2017 most of these employers will also be required to report summary pay data.
On Sept. 29, 2016, the EEOC released a revised EEO-1 Report that includes the requirement to collect summary pay data. The changes have spurred numerous questions from affected businesses.
Who is required to file the EEO-1 Report?
Employers with 100 or more employees; or have 100 or more employees total when the company is owned by or corporately affiliated with another company; or
- Are categorized as federal government prime contractors or first-tier subcontractors with 50 or more employees and have a prime contract, or first-tier subcontract amounting to $50,000 or more.
*Federal contractors with fewer than 100 employees are not required to file summary pay data (component 2) of the EEO-1 Report.
How do I report summary pay data on the revised EEO-1 Report?
To collect summary pay data, employers will:
- Report the total number of full and part-time employees they had during the snapshot period in each of 12 pay bands listed for each EEO-1 job category.
- To identify the pay band in which to count an employee, employers will refer to the pay reported for income tax purposes in Box 1 of the Internal Revenue Service (IRS) W-2 form. They will not report individual pay or salaries.
- Tally and report the total number of hours worked that year by all the employees accounted for in each of 12 pay bands within each of the 10 job categories
The EEO-1 pay bands, or pay ranges, mirror the 12 pay bands used by the Bureau of Labor Statistics for the Occupation Employment Statistics survey. The pay bands range from $19,239 and under to $208,000 and over.
Hours worked for non-exempt employees should reflect the actual hours worked and recorded by the employer, as required under the Fair Labor Standards Act (FLSA). For employees who are exempt from the FLSA, employers have a choice. They can report:
- 20 hours per week for each part-time employee and 40 hours per week for each full-time employee; or
- The actual number of hours worked if tracked for other purposes.
What is the submission date for the revised EEO-1 Report?
To give employers more time to accommodate the collection of pay data and allow for alignment with the W-2 reporting cycle, the EEO-1 deadline for the 2017 report will be March 31, 2018.
How does the EEOC use the data collected from the EEO-1 Report?
The EEOC and the OFCCP report that they will use the survey data collected from private employers and government contractors to:
- Gain a picture of women and minorities in the workforce;
- Support civil rights enforcement; and
- Analyze employment and pay patterns of women and minorities in the workforce.
Federal regulations require that this data be kept confidential.
The EEOC offers a complete explanation of its information collection online.
What does the new EEO-1 Report mean for affected employers?
Employers that must file the annual EEO-1 may face a heavier administrative burden. The EEOC estimates the new reporting obligations will be:
- Eight hours per filer for firm-level functions for Component One, plus an additional one hour per report for establishment-level functions, including the time for reviewing instructions, searching existing data sources, gathering and maintaining necessary data, and completing and reviewing the information.
- About 15.2 hours per filer for firm-level functions, plus an additional 1.9 hours per report for establishment-level functions for both Components One and Two.
Employers should consider ensuring their internal payroll and HR systems or third party providers can track and report the appropriate data by January 1, 2017. The EEOC has posted complete information about the EEO-1 Report and its requirements, as well as a Q&A sheet about the revised EEO-1 and summary pay data on their website at eeoc.gov.