Employers: Start Planning How to Pull Pay Data for EEO-1 Reports

Businesses should prepare a strategy for submitting employee pay data on their EEO-1 reports while they wait for the Equal Employment Opportunity Commission (EEOC) and the Office of Management and Budget (OMB) to respond to a court order to start collecting such information.

Covered employers have until May 31 to file their 2018 EEO-1 reports, but whether they will need to submit the pay data for this filing period isn't clear.

"While I do not recommend pulling pay data at this time, employers should be proactive in assessing their existing HRIS [human resource information system] and payroll capabilities in the event the EEOC announces that it will collect pay data during the current filing cycle," said Kiosha Dickey, an attorney with Ogletree Deakins in Columbia, S.C. Employers should continue to move ahead on the 2018 EEO-1 filings without pay data for the May 31 deadline, she said.

"Employers should start thinking about how they would comply," said Annette Tyman, an attorney with Seyfarth Shaw in Chicago. "For some employers, this is going to be a monumental task."

She said employers should gather their internal resources and think about what databases would need to be tapped and which employees could most efficiently pull the data into the right format.

Background

Businesses with at least 100 employees and federal contractors with at least 50 employees and a contract of $50,000 or more with the federal government must file the EEO-1 form, which identifies by job category, race, sex and ethnicity the number of employees who work for the business.

The EEOC uses information about the number of women and minorities companies employ to support civil rights enforcement and analyze employment patterns, according to the agency.

The EEO-1 form was revised during President Barack Obama's administration to require employers to report pay information from workers' W-2 forms by race, ethnicity and sex. However, the pay-data provisions were suspended in 2017 by President Donald Trump's administration.

Employers who oppose the expanded data collection said the W-2 income data that would be collected doesn't provide adequate information about pay disparities.

Several worker-advocacy groups challenged the Trump administration's hold on the pay-data collection provisions, and on March 4, a federal judge lifted the stay—meaning the federal government needs to start collecting the information.

On March 18, the EEOC opened the portal for employers to submit EEO-1 reports but did not include the pay-data questions. The judge subsequently gave the EEOC and the OMB until April 3 to tell employers if they will have to report pay data this year.

Required Pay Data

"Employers should revisit the efforts they had likely initiated before the pay-data requirement was put on hold," said Cheryl Behymer, an attorney with Fisher Phillips in Columbia, S.C.

The revised EEO-1 form will require employers to report wage information from box 1 of the W-2 form and total hours worked for all employees by race, ethnicity and sex within 12 proposed pay bands.

The reported hours worked should show actual hours worked by nonexempt employees, and an estimated 20 hours per week for part-time exempt employees and 40 hours per week for full-time exempt employees.

[SHRM members-only HR Q&A: What are the filing requirements for the EEO-1 form?]

Behymer noted, however, that the EEOC could modify the logistical information it previously provided now that the agency has a data officer who may have different suggestions about how to best implement the new requirements.

Employers should consider how they will integrate the demographic data with the pay and hours-worked data, particularly if the information is maintained in different databases and perhaps by different vendors, she added. "Employers should also consider enlisting the aid of their vendors, who may have addressed this issue themselves."

Possible Extension

The EEOC already extended the EEO-1 reporting deadline from March 31 to May 31 because a partial lapse in appropriations during the government shutdown delayed the portal's opening date. Attorneys said the agency may further extend the deadline.

"I would be surprised if the pay data and hours-worked data could be appropriately collected by the agency by May 31," Behymer said. "At the very least, I would expect an additional extension by the EEOC."

Dickey also said it would be difficult for the EEOC to quickly convert its current filing system, which requires only demographic information, to a new filing system that requires pay data. "In the off chance that the EEOC requires employers to submit pay data for the current filing cycle, I believe the agency would have to extend the May 31 deadline," she added.

"The way things look right now, the EEOC is going to provide some sort of timeline by April 3, and then employers will have a better understanding," Tyman said.