On July 14, 2016, the Equal Employment Opportunity Commission (EEOC) issued a revised proposed rule about collecting equal-pay data. The biggest difference between the initial proposed rule and the revised proposed rule is the date for filing the required form.
The EEOC and the Office of Federal Contract Compliance Programs (OFCCP) are jointly responsible for enforcing provisions of the Civil Rights of 1964 that prohibit discrimination based on race, color, religion, national origin, and sex. These two agencies also enforce the provisions of the Equal Pay Act of 1963 that prohibit pay discrimination based on sex. The EEOC’s enforcement efforts focus on all private-sector employers while the OFCCP’s enforcement efforts focus on Federal contractors.
Both agencies use the same form to collect data: the EEO-1 Form (created by the EEOC). But there is a difference in reporting requirements. If a private-sector employer has more than 99 employees, it must file an EEO-1; but the size requirement is smaller for government contractors, who must file if they have more than 49 employees. But even a contractor with more than 49 employees may be exempt as provided by 41 C.F.R. § 60-1.5.
Put another way, Federal contractors with fewer than 50 employees don’t file an EEO-1. Other private-sector employers with fewer than 100 employees don’t file an EEO-1.
How things currently work
Currently, the EEO-1 only collects data about sex, race, and ethnicity of employees. Currently, the deadline for submitting this information is September 30 of each year.
This data has been collected for over 50 years.
Changes proposed in February 2016
On February 1, 2016, the EEOC issued a proposed new rule that would not only require reporting information about the sex, race, and ethnicity of employees, but also pay and hours worked. This reporting requirement would apply to all employers with more than 99 employees. But Federal contractors with 50 to 100 employees would only report data about sex, race, and ethnicity. The rule would remain unchanged about Federal contractors with fewer than 50 employees and other private-sector employers with fewer than 100 employees. (They would continue to be exempt from having to file an EEO-1.)
The deadline for filing the report remained the same: September 30 of each year.
Modifications proposed in July
After reviewing the comments it received from the public and after a public hearing, the EEOC issued a revised notice of proposed rule. Essentially, nothing was changed about the EEOC’s plans to collect data except that the report deadline was moved from September 30 of each year to March 31 of the year following the reporting period.
But this adjustment to the filing deadline appears to be a beneficial change to employers who will now have to report the amount of pay and hours worked under the new rule. Under the earlier proposed rule, an employer would have had to calculate pay twice: once for tax purposes (the W-2 forms) and a second time for the EEO-1 form. Under the adjusted approach, the amount of pay can match the amount reported by employers on W-2 forms from the previous year, rather than having to recalculate pay for a 12-month period that straddled two years so that it could be reported on the EEO-1.
Under the provisions of the July notice, the deadline for filing the EEO-1 for 2016 will remain the same: September 30, 2016. But the deadline for filing the EEO-1 for 2017 will be March 31, 2018.
Assurances to government contractors about FOIA requests
A number of the comments from Federal contractors concerned the ability of competitors to request their pay and hours-worked data under the Freedom of Information Act (FOIA). The July 14 notice indicates that the OFCCP will protect pay and hours-worked from FOIA requests to the fullest extent allowed under the law. The notice indicates that exceptions 3 and 4 of the FOIA recognize the value of the pay and hour-worked data in conjunction with the Trade Secrets Act and suggest that it can be appropriately protected from public disclosure.
What do employers need to do?
Although a final rule hasn’t been issued yet, the EEOC-proposed changes appear to be poised to become final. Employers need to be thinking about how to collect and aggregate the data needed for reporting. Fortunately, they have a bit longer time to think through that process than they previously had under the first proposed rule.
“Stay tuned” to the Third Shift Employment Blog. We’ll be sure to announce when the new reporting requirements go into effect.
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