16
May
2019

EEOC Will Require Employers to Include Pay Information on EEO-1 Reports

Employment Law Insider & Alert

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PUBLISHED ON: May 16, 2019

Present Obligation

At present, the Equal Employment Opportunity Commission (“EEOC”) requires employers to submit data on the ethnicity, race and sex of their workers across ten job categories on the EEO-1 Report.  This is referred to by EEOC as “Component 1” data.

This EEO-1 reporting obligation presently applies to large, private sector employers which have (i) 100 or more employees or (ii) federal contracts or sub-contracts amounting to $50,000 or more, and have 50 or more employees.

New EEO-1 Pay Data Requirement

In 2016, the Obama administration sought to expand employers’ EEO-1 reporting requirements to also include wage and salary information.  According to then-Labor Secretary Thomas E. Perez, collecting the wage data was viewed as a critical step in achieving equal pay. “Better data will not only help enforcement agencies do their work, but it helps employers to evaluate their own pay practices to prevent pay discrimination in their workplaces” said Perez.

At that time, the EEOC revised the EEOC-1 report to require employers to submit aggregate W-2 earnings and hours across 12 pay bands for each of the 10 job categories.  The EEOC refers to this salary information as “Component 2” data.

Various employer and other advocacy groups quickly opposed the EEOC’s actions and sought relief in federal court to prevent the implementation of the salary data requirement.

On March 4, 2019, the United States District Court for the District of Columbia granted summary judgment ruling that the litigation to block the EEOC’s efforts to collect pay data “totally lacked a reasoned explanation.”  Accordingly, the EEOC’s efforts to collect pay data by race, ethnicity and gender from large companies were reinstated.

The Court ordered that such “Component 2” of the EEO-1 Report dealing with wage and salary data by job category along race, sex, and ethnicity lines for calendar year 2018 must be submitted by September 30, 2019.

The EEOC is in the process of amending its EEO-1 form to include salary data.  It will begin collecting such Component 2 data for calendar year 2018 in July, 2019.

A copy of a sample of the new EEO-1 Report requiring the submission and breakdown of salary data for each job category is attached.

Special Note

Employers should be aware that the deadline for submitting the traditional EEO-1 “Component 1” data for job categories by sex, race and ethnicity remains May 31, 2019.  That has not changed.

It should also be noted that there is a very substantial possibility that the District Court’s March 4, 2019 decision will be appealed, and will seek a delay of the revised EEO-1 Report’s requirement to include salary data pending the appeal.  Additionally, the EEOC may also delay the filing deadline to provide employers with additional time to comply with the wage and salary data requirements filing.

We will continue to monitor developments. Stay tuned.