EEO-1 Reporting Complications Creates ACA Reporting Efficiencies
At first glance, it’s a nice reprieve that EEO-1 reports for the 2017 tax year have been postponed. Reports were slated for a September 30, 2017 due date for all employment data from July, August, and September pay periods. The new deadline to file EEO-1 reports is March 31, 2018, albeit with more complexities. Gone are the days of simplified pay period info; welcome to more extensive information consolidated into annual periods. It’s a switch that may appear more cumbersome for employers, but a testament to recent government demands for more information to ensure compliance in a number of employment arenas: from anti-discrimination to the Affordable Care Act. So what do the new changes entail?
In 2016, the Equal Employment Opportunity Commission (EEOC) announced that there would be changes to the EEO-1 reports. In the simplest terms per the EEOC website, an EEO-1 report etches out the following: The EEO-1 Report is a compliance survey mandated by federal statute and regulations. The survey requires company employment data to be categorized by race/ethnicity, gender and job category.
Previous EEO-1 reports were not as intricate as what is now being proposed. They tracked employment data by race, gender, ethnicity and job category. However, advancements in technology are spurring new demands for more data, which has changed the direction of the report. The EEOC recognized that the past format did not provide the information it needed to do effectively enforce federal prohibitions on pay discrimination, including Title VII, the Equal Pay Act, and Executive Order 11246. The revised EEO-1 report will require employer-and establishment-specific data needed to assess potential pay discrimination.
The EEOC is requiring that these EEO-1 be filed electronically. That may be signaling an effort by the EEOC to streamline its audit efforts to capture more apparent violations on a mass scale.
The new reports will delve deeper into data for total hours and total compensation of employees based on designated job classifications and designated salary bands. The move is consistent with other agencies, like the IRS, requiring more information to gather more accurate data, and is a reaction to various lawsuits from workers demanding proper classification status as employees.
Too often, pay discrimination goes undetected because of a lack of information about what employees are paid. The EEOC and the Office of Federal Contracts Compliance Program (OFCCP) are charged with the responsibility of enforcing federal prohibitions on pay discrimination including Title VII, the Equal Pay Act, and Executive Order 11246, but, until now, they lacked the employer-and establishment-specific data needed to assess potential pay discrimination. The revised EEO-1 report will help. The EEOC said it carefully considered what kind of data would be most important and considered its benefit to achieve its objectives of improved regulatory compliance relative to the potential burden on employers. It’s beyond ensuring proper checks and balances, however. Here are a few points to keep in mind when compiling your data for EEO-1 reporting:
There’s much to confirm before even venturing into the new EEO-1 form, like maybe you don’t even need the form. The revised form is for companies with 100 or more employees. Keep in mind that the EEOC will consider this 100 employee threshold to be satisfied by combining multi-establishment companies under certain employer aggregation rules. Federal contractors whose staff is between 50 and 99 employees can use the old reporting guidelines. Federal contractors and subcontractors with 49 or fewer employees, and companies without federal contracts with 99 or fewer employees, will not be required to complete the form. Businesses will count their employees during a “workforce snapshot period.” Starting with reporting of 2017 data, this period will be from October 1 to December 31, 2017. Each employer may choose any pay period during this three-month timeframe to count their full and part-time employees for completion of the new EEO-1 report.
Make sure your records indicate that every employee falls under the correct EEO-1 designated job category. Job categories may need to be changed for some jobs if the scope of employees’ jobs have changed. Take a proper audit of your workers using a guide provided by the EEOC classifying hundreds of jobs into the 10 EEO-1 job categories. Further, have jobs organized by the correct EEO-1 designated pay bands. They are:
$19,239 and under
$19,240 – $24,439
$24,440 – $30,679
$30,680 – $38,999
$39,000 – $49,919
$49,920 – $62,919
$62,920 – $80,079
$80,080 – $101,919
$101,920 – $128,959
$128,960 – $163,799
$163,800 – $207,999
$208,000 and over
In addition, have your information on total hours ready. This includes full-time employee hours and part-time employee hours. Hours worked data should be reported on the EEO-1 form by adding the total number of hours worked by all the employees counted in each pay band, for the W-2 reporting year.
Your data may be pulled from numerous places, but it all needs to be provided in the EEO-1 form. Gather your data in advance and have it all organized neatly in one place. Have your employee hours and compensation organized with the other required info, such as race, gender, and ethnicity. If this information is stored in multiple databases, now may be the time to start consolidating it.
Differences in pay scales among employees must be justified by adequate means. This includes length of employment, seniority, and explanatory reasons for changes in pay. If your records indicate pay changes that do not fall within the guidelines, make those corrections now or prepare for violations later.
Just like the emphasis has been placed upon compliance with Affordable Care Act (ACA) mandates, so shall there be compliance with EEO-1 reporting mandates. Have your information correct, clean, and ready to report to the EEOC on the designated date of March 31, 2018. There is ample time, and should you notice holes in the efficacy of your current process, now is the time to develop a better strategy. Preparation is key.
Create Efficiencies with ACA Reporting.
Employers that are required to file EE01 reports are likely to be required to file ACA reporting, i.e., the 1094-C and 1095-C schedules. There is significant overlap in the data that you will need to prepare the EEO-1 forms and the 1094-C and 1095-C schedules. Coordinating the data collection for both will save you time.
For a sample copy of the EEO-1 report, click here.
To learn more about achieving pay equity, click here.