In keeping with the Obama administration's focus on equal pay issues, the Equal Employment Opportunity Commission (EEOC) has announced a plan to collect information from employers about employee pay as part of the EEO-1 employer information report. Employers subject to EEO-1 requirements are required to disclose to the federal government information about their workforce profiles by job category, gender, ethnicity and race. The EEO-1 reporting requirements have never required disclosure of information about workers' pay. The proposed changes to the EEO-1 report, which were announced on the seventh anniversary of the Fair Pay Act of 2009, will do just that.
Under the EEOC's proposed changes, employers subject to EEO-1 reporting requirements with more than 100 employees will need to provide aggregate data on pay ranges and hours worked. As set out in the EEOC's proposal:
"[T]he revised EEO-1 will collect aggregate W-2 data in 12 pay bands for the 10 EEO-1 job categories. Employers will simply count and report the number of employees in each pay band. For example, a filer will report on the EEO-1 that it employs three African American women as professionals in the highest pay band."
The first EEO-1 to require the new data under this proposal would be the September 2017 report.
According to EEOC Chair Jenny R Yang, the proposed changes to the EEO-1 are intended to help to identify and eradicate pay discrimination. "More than 50 years after pay discrimination became illegal it remains a persistent problem for too many Americans", she stated in the EEOC's press release announcing the proposal. She continued: "Collecting pay data is a significant step forward in addressing discriminatory pay practices."
Yang further stated that "[t]his information will assist employers in evaluating their pay practices to prevent pay discrimination". She noted that it will also aid enforcement efforts, acknowledging that the new requirements will "strengthen enforcement of our federal anti-discrimination laws".
Secretary of Labour Thomas E Perez elaborated on the intended aim of the proposal, stating: "We can't know what we don't know. We can't deliver on the promise of equal pay unless we have the best, most comprehensive information about what people earn." Perez further explained:
"We expect that reporting this data will help employers to evaluate their own pay practices to prevent pay discrimination in their workplaces. The data collection also gives the Labor Department a more powerful tool to do its enforcement work, to ensure that federal contractors comply with fair pay laws and to root out discrimination where it does exist."
The proposed change was published in the Federal Register on February 1 2016. Members of the public have 60 days from that date – until April 1 2016 – to submit comments.
The EEOC's proposed change to the EEO-1 report underscores the Obama administration's continuing focus on equal pay issues. Given the importance that the administration has placed on equal pay – including through the Fair Pay Act, which was President Obama's first piece of legislation while in the White House – it is anticipated that the EEOC and other federal agencies will continue to give heightened scrutiny to companies' pay practices and any perceived disparities in pay. Companies therefore may wish to consider proactively examining their pay policies and practices. Companies that will be affected by the new EEO-1 reporting requirements may also consider submitting comments on the EEOC's proposal.
For further information on this topic please contact Brian J Gold or Sarah M Konsky at Sidley Austin LLP's Washington office by telephone (+1 312 853 7000) or email (email@example.com or firstname.lastname@example.org). Alternatively contact Jennifer B Zargarof at Sidley Austin's Los Angeles office by telephone (+1 213 896 6000) or email (email@example.com). The Sidley Austin website can be accessed at www.sidley.com.
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