Why it matters

Together with the Office of Federal Contract Compliance Programs (OFCCP), the Equal Employment Opportunity Commission (EEOC) formally adopted the final rule modifying the Employer Information Report (EEO-1) to require covered employers to submit pay information for all employees. As of March 31, 2018, employers must report the total number of workers, by gender and race/ethnic group, that fall within 12 wage bands within each of ten job classifications, using the income in Box 1 of the employee’s W-2 form. In addition, the aggregate hours worked by each employee must be shared with the EEOC, which intends to use the data to “more effectively focus agency investigations, assess complaints of discrimination, and identify existing pay disparities that may warrant further examination.”

Detailed discussion

In January, the Equal Employment Opportunity Commission (EEOC) proposed a revision to the Employer Information Report (EEO-1) that would require employers to report information about the wages paid to their workers.

Private employers with at least 100 employees (and federal contractors with 50-99 workers) are currently required to file an EEO-1 report sharing the number of individuals they employ by job category and by race, ethnicity and sex. The report—delivered to the EEOC and the Department of Labor (DOL)—contains ten job categories, ranging from Executive/Senior-Level Officials to Service Workers and 12 pay bands within those categories, starting at $19,239 and under and working up to $208,000 and over.

The initial proposal added pay information to the reporting requirements, with employers providing to the EEOC the total number of full- and part-time employees within the pay bands and gender, race and ethnicity categories on the current EEO-1 form, using the income provided in Box 1 of the employee’s W-2 form. Employers must also tally and report the total hours worked by all the employees in each pay band.

So an employer would report that it employs ten African-American men who are Craft Workers in the second pay band ($19,240 to $24,439) who worked 20,800 hours last year, for example, or 23 non-Hispanic white women Sales Workers in pay band four ($30,680 to $38,999) who worked a total of 47,840 hours.

As initially proposed, employers were to add the pay information to the report as of September 30, 2017. However, after more than 300 comments were filed on the first draft, the EEOC tweaked the proposal to extend the start date until March 31, 2018. Pursuant to the final rule, each EEO-1 report will be due on March 31 of the following year to coordinate with employers’ end-of-year income reporting obligations.

“More than 50 years after pay discrimination became illegal it remains a persistent problem for too many Americans,” EEOC Chairwoman Jenny R. Yang said in a statement about the final rule. “Collecting pay data is a significant step forward in addressing discriminatory pay practices. This information will assist employers in evaluating their pay practices to prevent pay discrimination and strengthen enforcement of our federal antidiscrimination laws.”

To view the revised EEO-1 report, click here.