Monday, February 1, 2016

EEOC Proposes Revision to EEO-1 Reports - Compensation Data

On Friday, January 29, President Obama announced EEOC’s proposal to amend the annual EEO-1 report by adding pay and related information. The proposal would require employers with 100 or more employees to submit their annual EEO-1 report to include pay data from employee W-2 earnings as well as hours worked. The first submission under the proposal is due September 30, 2017.

EEOC’s decision to utilize W-2 earnings will provide the agency with a more comprehensive picture of employee pay as it accounts for factors such as commissions, tips, taxable fringe benefits, overtime, shift differentials, and bonuses. While utilizing the existing EEO-1 job categories, the proposed EEO-1 report will also include 12 pay bands for compensation data submission (click here to view their sample). The EEO-1 will also require collection of the total number of hours worked by the employees included in each EEO-1 pay band cell and by race, ethnicity and sex.  EEOC maintains pay bands will generate more reliable aggregated data to support more meaningful analysis in determining pay discrimination.

Kairos suggests employers begin evaluating their pay practices to ensure compensation disparities do not exist based on race, sex or ethnicity. Where differences exist, Kairos recommends gathering appropriate documentation to explain the disparity in the event of an OFCCP or EEOC audit.

Anyone who wants to comment on this EEOC proposal has 60 days after publication to do so, or until April 1, 2016. Comments may be submitted on-line, by mailing a hard copy (submitted to Bernadette Wilson, Acting Executive Officer, Executive Secretariat, Equal Employment Opportunity Commission, 131 M Street NE., Washington, DC 20507), or by facsimile transmission (202-663-4114).

In the coming weeks and months Kairos will provide additional guidance for our clients based on this proposal and offer strategies for preparing your 2017 submission. If you have any questions in the interim please do not hesitate to contact our office at 972-369-0015.