Calfee, Halter & Griswold LLPEEOC Proposes Changes to EEO-1 Reports to Collect Pay Data from Large Employers and Federal Contractors

February 5, 2016

In response to recommendations from the Obama Administration and the President’s National Equal Pay Task Force, on February 1, 2016, the U.S. Equal Employment Opportunity Commission (EEOC), which enforces federal laws prohibiting employment discrimination, including on the basis of pay, published proposed revisions to the existing Employer Information (EEO-1) Report to include collecting pay data from federal contractors and other employers with more than 100 employees.

Currently, the EEOC requires “large employers” with at least 100 employees, and federal contractors with at least 50 employees, annually to complete and file EEO-1 reports, which provide the federal government with workforce profiles broken down by race, ethnicity and gender in various job categories. The EEOC’s new proposal would require any employer with 100 or more employees to also submit aggregate data on pay ranges and hours worked in each EEO-1 job category, again, sorted by race, ethnicity, and gender. Federal contractors with 50-99 employees would not report pay data but would continue to report race, ethnicity, and sex by job category.  (The proposed EEO-1 report is available here.)

According to EEOC Chair Jenny Yang, identifying pay inequality is one of the Commission’s top enforcement priorities. Yang said, “The pay data will provide EEOC and OFCCP (Office of Federal Contract Compliance Programs) with insight into pay discrepancies across industries and occupations. Our agencies will use this data to more effectively focus investigations, assess complaints of discrimination, and identify existing pay disparities that may warrant further examination.”

The proposal will be open for public comment until April 1, 2016. During the comment period, employers are likely to raise concerns about the potential exposure to increased risk of agency investigations and enforcement actions for purported improper pay practices based solely on pay data that the government would be getting without any context, as numerous other factors may affect employee pay besides just the number of hours worked, including factors such as performance, differences in job duties, level of education, and seniority. In addition, this new pay data reporting mandate could also present confidentiality issues over how employers’ wage information will be used and whether such information, which could become competitively valuable if rival companies were to acquire it, would be available to the public. While Title VII forbids the EEOC from publishing individual EEO-1 reports, such information may become public record if a Title VII proceeding were to be instituted in court that would involve that information.

Moreover, although the EEOC may lawfully refuse to disclose individual EEO-1 data in response to a Freedom of Information Act (FOIA) request from members of the public, as things currently stand, that same data could be available from the OFCCP pursuant to a FOIA request. Once the comment period ends, the EEOC will review and consider the comments before finalizing any revisions to the new reporting requirements. If ultimately approved, the new compensation information would be collected beginning with the 2017 EEO-1 report, which must be submitted by the September 30, 2017, EEO-1 filing deadline. In the meantime, employers should use this opportunity between now and September 2017 to conduct a privileged audit of their pay practices to determine whether and/or where any pay discrepancies among workers lie, as well as the methods used for determining pay, and either address or be prepared to explain any potential disparities before these reporting obligations become effective. For more information about this topic, please contact any of the Labor, Employment lawyers at Calfee, or your regular Calfee contact.  

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For additional information and discussion on this topic, please contact:   John R. Cernelich 216.622.8251 jcernelich@calfee.com   Todd F. Palmer 216.622.8354 tpalmer@calfee.com   P. Jason Dejelo 216.622.8645 jdejelo@calfee.com    

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