New Federal Pay Equity Reporting Imposed by EEOC -- Bond Webinar to Unpack the Requirements and Obligations

July 24, 2019

By: Thomas G. Eron

On July 15, 2019, the EEOC issued the final protocols for enhanced EEO-1 reporting. Most private sector employers with 100 or more employees are now required to report, on or before September 30, 2019, pay and hours data on all employees for 2017 and 2018 by job category, gender, race, and ethnicity. Initially launched as part of the Obama administration’s initiative to address pay equity, the EEO-1 Component 2 requirements will impose short term burdens and potential long term risks for many employers.

There is a tortured history behind this development. Employers are likely familiar with the EEO-1 annual reporting of workers by job category based on sex, race, and ethnicity. In 2016, the EEOC proposed adding a new component to the EEO-1 report to allow for the collection of pay data and the analysis of pay disparities based on sex, race, and ethnicity. The new reporting requirements were to take effect in 2018, but the Office of Management and Budget “paused” the implementation. Advocacy groups sued to re-start the initiative and, in March 2019, a federal court directed the EEOC to proceed with the data collection. The EEOC chose to require data from both 2017 and 2018. The court mandated the September 30, 2019 compliance date.

In the July 15 release, the EEOC advised that each employer with 100 or more employees should receive correspondence by U.S. mail from NORC, the private subcontractor retained by EEOC to collect the data, with instructions and an individualized access code to upload the data through the EEOC web portal.

The new format includes the traditional ten EEO-1 job categories, now sub-divided into 12 pay bands with the instruction to report (i) the number of employees and (ii) the number of hours worked, in each job category and pay band by sex, and six racial/ethnic categories.

The new EEO-1 reporting raises many practical and technical issues for employers that are now required to compile data, in many cases from various databases and locations, under a very quick timetable. The long term implications from these reports are potentially more problematic. While ostensibly described as a database to evaluate pay equity, the EEO-1 pay bands segment the information into overbroad groupings, and the database ignores critical factors affecting pay, including years of service/seniority, educational credentials, experience, and specialization.

Join us for a complimentary webinar on Monday, July 29, 2019 at 12 noon EDT to explore the significant aspects of this federal foray into the complex issues surrounding pay equity.