On February 1, 2016 the U.S. Equal Employment Opportunity Commission (EEOC) published proposed changes to the Employer Information Report, a mandatory compliance survey completed annually by companies with more than 100 employees and many federal contractors. This announcement coincided with the anniversary of the Lilly Ledbetter Fair Pay Act, which extended the time period for the filing of complaints of employment discrimination in compensation and was the first bill signed into law by President Barack Obama. It originated as part of the President’
s National Equal Pay Task Force, a larger governmental initiative analyzing compliance with federal laws prohibiting pay discrimination.
Under the current scheme, employers subject to the reporting requirements of the Employer Information Report, known as the EEO-1, disclose the number of individuals they employed by job category and by race, ethnicity, and sex.
As currently drafted, the proposed changes require employers to submit data regarding each employee’s pay and number of hours worked, in conjunction with the currently reported demographic information. The changes will allow the federal government to compare pay level and work hour data among those demographic groups. Doing so, according to the EEOC’s announcement, “will assist the agency in identifying possible pay discrimination and assist employers in promoting equal pay in their workplaces.”
The proposals also signal that employers should increase awareness and analysis of their own pay practices. While the primary effect on employers is an increased reporting burden, the proposed changes may ultimately expose those employers to greater risk of investigation. With access to the additional demographic and pay information, many expect the EEOC to step up its enforcement efforts in this area. While changes will likely not go into effect until September 2017, employers may prepare for the new rules by auditing their current pay practices, working with counsel to ensure that any internal assessments are properly protected and kept confidential.
In its fact sheet, the White House noted that the proposal would cover roughly 63 million employees and serve to “focus public enforcement of our equal pay laws and provide better insight into discriminatory pay practices across industries and occupations.”
The proposed changes were published in the Federal Register on February 1, 2016. The published notice outlines the specific data sought from employers, which employers would be required to report their pay data, an effective date for the changes to reporting, when the annual EEO-1 reports will be due, and how employers will submit such information. All employer-supplied data will be confidential with the EEOC. Employer names will not be, published alongside their employee data. Instead, aggregated data is analyzed by the EEOC and made available to the public.
These proposed changes to EEO-1 are open for comment, and members of the public are invited to share their thoughts. Comments are due to the EEOC by April 1, 2016. Contact me or any of colleagues of the Employment Group at Burns White for further information.