EEOC Will Collect Summary Pay Data in 2018

October 5, 2016

pic-moneyOn Sept. 29, the U.S. Equal Employment Opportunity Commission (EEOC) announced that beginning in March 2018, it will collect summary employee pay data from certain employers. According to the EEOC, the new data is intended to help improve investigations of possible pay discrimination, which remains a contributing factor to persistent wage gaps.

The summary pay data will be added to the annual Employer Information Report or EEO-1 report—on which employers report on workforce demographics—that is coordinated by the EEOC and the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP). OFCCP collects data from federal contractors and subcontractors.

Essentially, the EEOC updated its EEO-1 form to require private employers including federal contractors and subcontractors with 100 or more employees to provide pay data to the agency by race, ethnicity and gender. Federal contractors and subcontractors with 50–99 employees will not report summary pay data, but they will continue to report employees by job category as well as by sex, ethnicity, and race as they do now. Employers with 99 or fewer employees and Federal contractors and subcontractors with 49 or fewer employees will not be required to complete the EEO-1 report as is current practice.

In response to public comments, the first deadline for the new 2017 EEO-1 report will be March 31, 2018, which gives employers 18 months to prepare. This revision does not impact the 2016 EEO-1 report, which were due on Sept. 30, 2016 and remained unchanged.

The White House said the revision will affect about 60,000 employers and 63 million employees. Earlier this year, the EEOC estimated that the revision would increase the annual cost to all businesses of completing an EEO-1 by $25 million, and would also impose a one-time compliance cost of $27 million.

The EEOC will be offering free webinars for interested employers and stakeholders on Oct. 20 and Oct. 26, 2016. Technical assistance also will be available through the EEOC’s hotline and email. For more information, please click here.

During the comment period, NSBA submitted comments emphasizing our fear that adding these pay data provisions would place massive and unnecessary burdens on smaller employers and waste federal resources on fruitless “fishing expeditions” based on incomplete and misleading information. In the comment letter, NSBA cited that our members feared the rule will force them to spend an extraordinary amount of time gathering and inputting the information requested by the EEOC. And, without the opportunity to explain their decision-making process, employers also may be more likely to face baseless pay discrimination lawsuits. Small businesses that are already following the law simply do not have the resources to defend against misguided and burdensome bureaucratic inquiries into their legitimate pay practices, let alone expend thousands of dollars to defend against meritless lawsuits regarding the same. Systems are already in place for employees to complain if they believe they are being discriminated against; NSBA believes that we should allow those systems to work rather than sifting through exponentially large amounts of data from employers, the vast majority of whom are already following the law, when the data will not even identify the “bad apples.”

More information about the revised EEO-1 report, including the new form, a Fact Sheet for Small Business, and a question and answer document are available on EEOC’s website at www.eeoc.gov.

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