A federal judge reportedly ruled April 25 that all employers who are required to submit EEO-1 surveys on employee demographic data must report employee pay data by Sept. 30, 2019. This includes employers with at least 100 employees and federal contractors with at least 50 employees and a contract of $50,000 or more with the federal government.
The pay data reporting provisions were initiated by the Obama administration but were suspended in 2017 by the Trump administration and have been the subject of protracted litigation (National Women’s Law Center, et al. v. Office of Management and Budget, et al., Case No. 17-cv-2458).
The judge also ordered the EEOC to collect a second year of pay data. It gave the agency a choice between collecting employers’ 2017 data with the 2018 pay data or waiting to collect 2019 pay data next year. The EEOC has until May 3 to decide which second-year dataset to collect.
Advocates for the collection of pay data argue that it will help identify and potentially narrow systemic pay gaps based on race, sex and ethnicity. However, opponents have argued that W-2 wages will not adequately take into account the nondiscriminatory aspects of pay, including shift differentials, education, etc. Time will tell which side is correct.
Under the new reporting requirements, the employer must report earnings and hours data aggregated according to the EEO-1 job categories to which the employees are assigned for all full- and part-time employees employed during a payroll period between Oct. 1 and Dec. 31 (the employer can pick the period). For each EEO-1 job category, the employer must indicate the number of employees falling within each of the 12 pay bands by sex and race/ethnicity. Employers are required to use W-2 “Box 1” earnings to determine the pay band into which each employee falls. Additionally, for each EEO-1 job category, the employer must aggregate hours data for all employees in the pay band by sex and race/ethnicity. Hours worked for non-exempt employees will be calculated by using their FLSA recorded hours. For full-time exempt employees, hours will be calculated by multiplying 40 hours by the number of weeks they worked in the applicable year. For part-time exempt employees, hours will be calculated by multiplying 20 hours by the number of weeks they worked in the applicable year.
It is imperative for employers to start (or continue) gathering the relevant 2018 wage and hour data and preparing it for submission, as this process will take a fair amount of time. It is also important to note that traditional EEO-1 surveys still have to be filed by May 31, 2019.