EEOC Provides Second Bite of the Apple on EEO-1 Report Proposal

The EEOC has provided a second chance to comment on its proposed revisions to the EEO-1 form.  The revised proposal does not change the EEOC’s insistence on collecting pay and hours worked data and does not fully respond to employers’ concerns regarding the burden and usefulness of collecting the data.  Rather, the EEOC revised the report to change the due dates to coordinate reporting of demographic and additional data beginning in March 2018.  The comment period for the revised proposal closes August 15, 2016.

The EEOC’s efforts arise from the government’s larger efforts to enforce pay equity through a series of reporting, enforcement and voluntary initiatives.  This reporting initiative follows a now-abandoned effort by the Office of Federal Contract Compliance Programs (OFCCP) to obtain pay data in an equal pay report.  EEOC has joined with OFCCP to collect and share pay data to bolster its reporting and enforcement efforts.

On January 29, 2016, the EEOC asked the Office of Management and Budget to approve a change to the EEO-1 form.  As discussed in more detail here, EEOC proposed that beginning in September 2017, EEO-1 filers with 100 or more employees would be required to submit EEO-1 data to include aggregated W-2 pay and hours worked data.  The Agency scheduled hearings and invited various stakeholders including Orrick’s Gary Siniscalco to testify regarding the proposal.  Orrick’s testimony can be found here.

Based on the comments and the testimony, EEOC has issued its 30 day notice revising the previous notice.  The significant change is in the due date of the new EEO-1 report from September 30, 2017 to March 31, 2018. Subsequent reports would be due on March 31. EEOC made this change based on the comments that reporting W-2 wages in September placed a large burden on filers as W-2 wages are captured on a calendar year basis.

Also, the EEOC attempted to clarify the “hours worked” component of the report to indicate that the employer could interpret the term using the definition in the Fair Labor Standards Act. The FLSA defines hours worked as “all time an employee must be on duty, or at any other prescribed place of work, from the beginning of the principle activity of the workday to the end of the last principle activity of the workday.”  Reporting employers may report 40 hours per full time exempt employee and 20 hours per part-time exempt employee.  The EEOC further explained the term in reference to the pending “hours worked” reporting obligations for covered federal contractors under pay transparency provisions of the Fair Pay and Safe Workplaces Executive Order.

Further, the EEOC revised its burden estimate.  Rather than the 6.6 hours estimated in the initial notice, EEOC now estimates that the enhanced report would take employers 15.2 hours to complete.  This estimate remains significantly below the estimates most employer commenters noted.

The revised proposal also makes clear that EEOC plans to make the data available to its enforcement staff for investigative purposes as it looks at employers’ pay practices.  Despite significant concern that EEO-1 job group analysis will yield little usable data, EEOC, relying on a nine-year old pilot study, rejected commenters’ claims and maintains that the analysis would be an effective tool in charge investigations.

Overall, the revised EEO-1 proposal signals that the EEOC along with other government bodies are hurdling down the road of placing burdens on employers in their quest to address pay equity.  State law changes, such as those in California and Maryland, along with shareholder proposals continue to pose threats to employers and their pay practices.  Employers should consider proactive steps, such as pay audits, to determine whether their pay practices pose a risk.