Regulatory Compliance

EEO-1 Compliance Is Changing

Employers need to demonstrate fairness in pay

The Equal Employment Opportunity Commission (EEOC) requires submission of the EEO-1 form as part of its efforts to enforce equal opportunity laws, as well as track and research pay discrimination against protected groups of employees. The EEOC recently was ordered to add pay data reporting as part of the EEO-1 reporting requirements, starting with the 2019 report. Employers are now required to provide pay data for calendar years 2017 and 2018.

 

The addition of pay data information will mean that employers will have two EEO-1 filing deadlines for this year:

  • Component 1 information, which includes information on employee race, gender, EEO-1 job category, and physical location category based on a payroll period in October, November, or December 2018 must be submitted by May 31, 2019.

 

  • The new Component 2 information for pay data requires employers to submit hours of service and W-2 data on their employees for calendar years 2017 and 2018 by September 30, 2019.

 

Contact us to review your options today.

Know Before You Show

Experts from various HR, payroll, human capital, and legal organizations strongly recommend that employers subject to the expanded EEO-1 requirements consider undertaking a pay equity audit prior to submitting pay data by the deadline of September 30, 2019. The addition of new pay data requirements will give the EEOC an unprecedented view into your organization’s pay practices and may expose it to EEOC investigations and/or charges of unequal pay. Another reason to consider a pay equity audit is that your organization’s pay data is vulnerable to disclosure to third parties under several federal statutes. In either scenario, it’s better that you understand the risks posed by pay inequity in your data—and begin taking actions to mitigate them.

Beware of Third-Party Access to
Your EEO-1 Pay Data

Employees, former employees, and other third parties may gain access to your organization’s EEO-1 report(s), including pay data, if they have initiated a “proceeding” under Title VII of the Civil Rights Act of 1964 or the Americans with Disabilities Act.

For federal contractors, EEO-1 reports may also be obtained by the general public under Freedom of Information Act (FOIA) requests to the Office of Federal Contract Compliance Programs (OFCCP). According to the OFCCP, “the EEO‐1 data received by OFCCP are subject to the provisions of FOIA, meaning that members of the public may file a FOIA request asking OFCCP to disclose information in its possession.”

Now is the time to consider being proactive in identifying any pay disparities with an organization's pay structure to develop a plan to address them.

Here's what we suggest as best practice:

  • Work with inside or outside counsel that understand the protection of attorney-client privilege.
  • Analyze any pay disparities ahead of time to determine if organizations should address any pay gaps prior to filing an EEO-1 report.
  • Perform a proactive pay equity audit to determine if any pay gaps exist that might catch the attention of the EEOC and other regulators.

 

The EEO-1 Report applies to two categories of employers:

  • Private employers with 100 or more employees.
  • Federal government contractors and subcontractors with 50 or more employees and with $50,000 or more in government contracts.

Why It Matters

  • Failure to file may result in EEOC enforcement, and filings with false statements may result in fines or imprisonment.
  • Inaccurate reporting may increase the appearance of pay discrimination, attracting agency scrutiny.
  • Inaccurate reporting may result in EEOC investigation, and/or employee lawsuits for pay discrimination.
  • Inaccurate reporting may negatively impact employee morale as well as company brand and reputation.

Accurate and complete EEO-1 reporting is designed to:

  • Avoid needless EEOC investigations and/or enforcement actions.
  • Avoid OFCCP audits for federal contractors.
  • Provide an opportunity to employers to conduct a self-assessment and proactive remediation.

 

Click below to download and view the current EEO-1 form for Component 1 data and the new form for Component 2 data.

Current EEO-1 Report

Proposed EEO-1 Report

For more information on EEO-1 reporting, subscribe to our blog, the PayParitySM Post, by clicking here.