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Legal Updates

Proposed Changes to EEO-1 Reports Will Increase Burdens on Employers

02.02.2016

Yesterday, the EEOC proposed significant changes to the familiar EEO-1 reports. Under the EEOC’s proposal, employers with more than 100 employees ("large employers") will be required to report employee compensation and hours worked, in addition to the information already required on the EEO-1 report. The proposed rule, which would take effect beginning with the EEO-1 reports due in September 2017, is likely to significantly increase the reporting burden on large employers.

Large employers and federal contractors with 50 or more employees currently must submit an annual EEO-1 report identifying by race, ethnicity, and sex the number of individuals employed in certain job categories. The proposed rule would require large employers to also include employees' W-2 earnings using 12 specified pay bands for each EEO-1 job category:

(1) $19,239 and under;
(2) $19,240 - $24,439;
(3) $24,440 - $30,679;
(4) $30,680 - $38,999;
(5) $39,000 - $49,919;
(6) $49,920 - $62,919;
(7) $62,920 - $80,079;
(8) $80,080 - $101,919;
(9) $101,920 - $128,959;
(10) $128,960 - $163,799;
(11) $163,800 - $207,999; and
(12) $208,000 and over.

The EEOC selected total W-2 earnings as the appropriate measure of compensation, which include not only wages and salaries, but also other compensation such as commissions, tips, taxable fringe benefits, and bonuses. The proposed rule states that the EEO-1 report would aggregate pay for a 12-month period looking back from any pay period between July 1 and September 30 of the reporting year. Large employers must then report the number of employees whose W-2 earnings for the past 12 months fall into each pay band, by race, ethnicity, sex, and job category.

The proposed rule would also require large employers to report the total number of hours worked by the employees included in each pay band. For salaried employees, the EEOC suggests that employers assume a 40-hour work week, but the EEOC is currently seeking employer input on the issue of exactly how to report hours worked for salaried employees. The proposed EEO-1 form can be found here .

The compensation data reported on the EEO-1 report will be used by OFCCP for federal contractors with 100 or more employees. As a result, OFCCP is abandoning implementation of the compensation data survey it originally proposed in 2014.

Federal contractors with 50-99 employees would not be required to submit pay data, but must continue to report ethnicity, race, and sex by job category. Non-contractor employers with less than 100 employees, and federal contractors with less than 50 employees, are not required to file an EEO-1 report.

The EEOC is accepting comments on the proposed rule through April 1, 2016.

If you have a question about the EEOC’s proposed rule regarding EEO-1 reports or would like additional information, please contact Justin Furrow, Nathan Bosshardt, or a member of Chambliss’ Labor and Employment Section.