President Obama Radically Expands EEO-1 Reporting Requirements
On January 29, 2016, President Obama announced a series of actions intended to close the gender pay equity gap, including proposed revisions to the EEO-1 form that would require the submission of detailed pay information.
As President Obama stated in his press conference, and as set forth in a White House Fact Sheet, “New Steps to Advance Equal Pay on the Seventh Anniversary of the Lilly Ledbetter Fair Pay Act,” the Equal Employment Opportunity Commission today issued a proposed rule to expand the information collected on the EEO-1 form. The EEO-1 form must be submitted annually in September by (1) employers with more than 100 employees and (2) government contractors with more than 50 employees and more than $50,000 in federal contracts or subcontracts. It requires employers to provide information regarding the race, ethnicity, sex, and job category of their workforce. The proposed revision would add the requirement to provide aggregated data on pay and hours worked, broken down into pay bands by the same race, ethnicity, and sex categories. According to the EEOC’s press release on the EEO-1 revisions, the EEOC and the OFCCP will use the submitted data to analyze pay disparities across industries and occupations, and facilitate federal antidiscrimination actions. In addition, EEOC will publish aggregated data that employers can use in their own voluntary compliance efforts.
This revision builds upon a Presidential Memorandum signed by President Obama in April 2014, which imposed this new requirement on government contractors and subcontractors. The Department of Labor’s Office of Federal Contract Compliance Programs issued a proposed rule to implement this directive in September 2014, but the rule has not yet been finalized. The proposed rule met with strong opposition from the government contracting community, which expressed a wide range of concerns. These ranged from the burden of compiling the information, to the confidentiality of the information, to the security of the web portal through which the pay information would be submitted. In addition, the contractor community questioned the utility of the information, which does not account for pay differentials based on geography, size, or other significant factors.
The EEOC, in its proposed rule, contends that it has addressed those concerns. Under EEOC’s proposed rule, each employer would be required to submit the EEO-1 form electronically, which the EEOC states will be “less burdensome” for employers. In addition to the race, ethnicity, gender and job category information already provided, employers will also need to provide the total W-2 wages (which the EEOC believes can be generated at times other than the usual end of the year, given automated payroll systems), aggregated by 12 pay bands in each of the existing 10 EEO-1 job categories. Employers will also report the total number of hours worked by the employees in those pay bands. A proposed form is available here. Notably, the rule does not address contractors’ expressed concerns about the security of the electronic data submission system.
Interested parties may submit comments, including electronically, on the proposed rules from February 1 through April 1, 2016. The rule will not take effect until it has been revised and finalized by the EEOC, but employers are supposed to comply with the new filing requirements for the September 2017 EEO-1 submission. The EEOC has also issued a Small Business Fact Sheet and Questions and Answers on its proposed rule.
Interestingly, this action appears to resurrect the Equal Opportunity Survey, which was used by the OFCCP from 2000-2005 to collect personnel data, including compensation information, from federal contractors. The EO Survey was abandoned in 2006, after an independent consulting group found that it was ineffective in identifying systemic discrimination. We anticipate that, like the contractor community in response to the Presidential Memorandum, the broader employer community will strongly object to the increased burden of this expanded form. We also expect an outcry of Presidential overreaching by Republican lawmakers.
Along with the expanded EEO-1 form, President Obama also called on Congress to pass the Paycheck Fairness Act. In addition, he announced the issuance of a White House Report on “The Gender Pay Gap on the Anniversary of the Lilly Ledbetter Fair Pay Act,” exploring the gender wage gap and the Administration’s policies intended to address it. He also stated that the White House will host a summit on “The United State of Women” on May 23.