Authored by Karen E. Milner
Feb 03, 2016
On Jan. 29, 2016, the seventh anniversary of the Lilly Ledbetter Fair Pay Act, President Obama announced that the Equal Employment Opportunity Commission (EEOC) is proposing a pay equity report that will be added to the currently required EEO-1 report. The pay data is intended to help the EEOC and the Office of Federal Contract Compliance Programs improve enforcement of federal pay discrimination laws and support employers’ voluntary compliance with those laws. An EEOC press release noted that the two agencies “would use this pay data to assess complaints of discrimination, focus agency investigations, and identify existing pay disparities that may warrant further examination.”
What this new pay equity report means for employers
Beginning with the Sept. 30, 2017 EEO-1 reporting deadline, the proposed revision would require all employers with 100 or more employees to submit an annual report on pay data including employees’ total W-2 earnings for a 12-month period looking back from a pay period of their choice between July 1st and September 30th. W-2 earnings were chosen because they include not only wages and salaries, but also other compensation such as commissions, tips, taxable fringe benefits, and bonuses. The current reporting by race, ethnicity, and gender is not proposed to change.
For each of the EEO-1 job categories, the proposed report will utilize the same 12 pay bands as the Bureau of Labor Statistics in the Occupation Employment Statistics survey. Employers will report the number of employees whose W-2 earnings for the prior 12 months fell within each pay band. For example, an employer could report on the EEO-1 that it employs 3 African American women who are Professionals in the sixth pay band ($49,920 – $62,919).
The proposal will also account for part-time workers, those who worked fewer than a full 12 months, and workers with W-2s from multiple employers by collecting the number of hours worked by the employees counted in the pay bands. For example, an employer would report on the EEO-1 that total hours worked for 11 Hispanic men who are Craft Workers in the second pay band ($19,240-$24,439) is 10,000 hours.