EEOC Announces Approval of Revised EEO-1

On
September 29, 2016, the U.S. Equal Employment Opportunity Commission (EEOC)
announced approval of its revised Employer
Information or EEO-1 report
, which employers must file with the EEOC annually to
report demographic information about their workforces. On March 31, 2018, private
employers, including federal contractors, with 100 or more employees must
include summary compensation and hours-worked data in their annual EEO-1 report.
Specifically, covered employers will be required to
report

employees’W-2 earnings and hours-worked data, broken
down by gender, race, ethnicity, and by 12 pay bands
in each of the 10 EEO job categories. 

The
new reporting requirements do not affect employers’ 2016 EEO-1 report due on
September 30, 2016.  However, beginning
in 2017, the annual filing deadline will be pushed back from September 30 of
the reporting year, to March 31 of the following year.  Accordingly, the first time employers’ must
file the EEO-1 reports containing the new data is by March 31, 2018. 

To
accommodate the EEO-1’s new filing schedule, employers’ annual EEO-1 “workforce
snapshot” period (the time period during which employers survey their
employees) will shift from the third quarter to the final quarter of the
calendar year, beginning with the EEO-1 report due on March 31, 2018.

Since
last February when the EEOC published its initial proposal to collect this
additional data, the employer community has repeatedly voiced strong objections
and concerns regarding the use of W-2 data; the ability to accurately track
employees’ hours-worked; the utility of the information being collected; the
increased burden and costs that were not accurately considered in the EEOC’s
proposal; and insufficient safeguards to protect the privacy of the data.  Unfortunately, these genuine concerns largely have
gone unheeded.  Aside from changing the
EEO-1 reporting schedule so that employers will not have to issue an additional
W-2, in the final EEO-1 the EEOC made no other substantive changes from the
agency’s initial proposal.

Although
the EEOC has posted an assurance on its website that the agency “maintains
robust cybersecurity and privacy programs,” and will require employers to
choose a new password to access their next report, these warning will do little
to allay employer concerns regarding the security of their data.

For
federal contractors, it is important to note that EEOC shares EEO-1 data with
the Department of Labor’s Office of Federal Contract Compliance Programs
(OFCCP). The EEOC is prohibited by Title VII from releasing any individual
EEO-1 data, with EEOC employees subject to criminal penalties if they are
involved in such a release. However, the EEO-1 Report data shared with OFCCP has
more limited protections under the exemptions to the Freedom of Information Act.

Next
Steps

The
EEOC will be offering webinars on October 20 and 26 and providing technical
assistance through email and the agency’s hotline to help businesses comply
with the new requirements.

Additionally,
employers should consider the following steps in 2017 as they prepare for the
new EEO-1 reporting requirements:

  • Assemble a team with
    the necessary subject matter expertise that typically includes legal, HR,
    compensation, timekeeping, payroll, and other affected areas. The assessment team should evaluate the
    company’s current capabilities promptly, so that there is sufficient time to
    undertake necessary updates and changes to systems and reporting
    capabilities.
  • Review the
    payroll and HRIS systems to determine where the earnings and hours-worked data are
    maintained, and whether the new, expanded data requirements can be met from the
    current systems. Typically,
    modifications may be required in order to be able to collect hours worked data.
  • If the company
    uses a separate system for payroll, then consult with the company’s IT representatives
    to complete any necessary updates of their HRIS systems to accommodate and
    integrate the additional data.
  • Employers who rely
    upon outside vendors to generate W-2 forms, and do not maintain the information
    internally (specifically the individual employee earnings reported in Box 1)
    will need to review their contracts and confer with their vendor to determine
    the most efficient way to import the W-2 data to the system(s) that are used
    for preparing the new EEO-1 report.
  • Determine
    whether the company will use the permitted default entries of 40 hours (full
    time) and 20 hours (part-time) for exempt employees or will provide exempt
    employees’ actual hours, either by tracking hours worked or determining whether
    the employees’ work hours are available from other records, e.g., log-ins, federal contracting
    billing reports, etc..
  • Employers should
    ensure that all reasonable steps are taken to protect the confidentiality of
    their data once it is in the agencies hands.

Please
contact either the FortneyScott attorney with whom you work or Leslie
Silverman, Esquire from FortneyScott for additional information or advice on
complying with the new EEO-1 reporting obligations.