The Equal Employment Opportunity Commission (EEOC) and Office of Management and Budget (OMB) have until April 3rd to advise whether employers will have to report pay information along with the standard demographic information in the annual EEO-1 report.
Businesses with 100 or more employees and federal contractors with 50 or more employees are required to submit the EEO-1 report annually disclosing the number of employees in their workforce by job category, race, sex, and ethnicity.
In 2016, the EEOC announced changes to the EEO-1 reporting requirements. Under the changes, covered employers would be required to include pay data and the number of hours worked in the annual EEO-1 report. The controversial changes were suspended by the Trump Administration in 2017 as the changes were unnecessarily burdensome and lacked practical utility.
Since that time, several advocacy groups have taken the Trump Administration to court to get the changes reinstated. In early March, a federal judge determined that the Trump Administration did not have good cause to suspend the changes from going into effect—thereby reinstating the expanded EEO-1 reporting requirements.
While the ruling effectively put the requirement to report pay data back on the table for 2018 reporting, the EEOC did not include any request for pay data when it opened reporting on March 18th. This caused a lot of confusion among employers. On March 19th, the federal judge who reinstated the expanded EEO-1 reporting requirements informed the EEOC that it had until April 3rd to notify employers about the pay data reporting requirement (i.e. how it would be collected, when it would need to be submitted, etc.).
What should employers do now? It is highly likely that the decision will be appealed, thereby delaying the implementation pending the appeal, but there is no guarantee that will happen. Employers should be prepared for the ruling to take effect immediately—requiring them to report data on pay and hours worked by the May 31st deadline.
Employers should be proactive—looking at their pay system for any disparities that might subject them to greater scrutiny if required to report immediately. Perhaps these disparities have legitimate and non-discriminatory explanations. Perhaps corrections need to be made to address any disparities that are problematic. Doing a self-audit is going to put the business in a much better position should this information be turned over to the EEOC sooner rather than later.
Nevada Association of Employers (NAE) will continue to monitor the latest developments related to EEO-1 reporting to ensure you stay informed and in compliance. Not on our mailing list? Join today!
