The Administration has released a revised notice on a proposal by the Equal Employment Opportunity Commission (EEOC) to enhance the amount of data certain employers would be required to report. The EEOC's proposal on compensation data collection is intended to address gender pay equity issues and, in part, utilizes employer's tax reporting on Forms W-2.

The EEOC's proposal is part of the Administration's focus to narrow the gap between compensation paid to men and women in comparable positions and to provide women with additional tools to challenge pay discrimination. The initiative is designed to provide the EEOC and the Department of Labor (DOL) with pay data to better target compensation issues and address compensation disparities.

Background

Under the Civil Rights Act of 1964, employers must keep records relevant to determining whether unlawful employment practices have been committed. The EEOC and the DOL Office of Federal Contract Compliance Programs (OFCCP) require covered employers to file the form EEO-1 to the Joint Reporting Committee that is housed at the EEOC.

Currently, the EEO-1 directs covered employers to annually report the number of individuals they employ by job category and by race, ethnicity and gender. There are 10 job categories: Executive/Senior Level Officials and Managers; First/Mid-Level Officials and Managers; Professionals; Technicians; Sales Workers; Administrative Support Workers; Craft Workers; Operatives; Laborers and Helpers; and Service Workers.

On February 15, 2016, the Administration released a proposal requiring "covered employers" to substantially increase the data that must be collected and reported to the EEOC. (See Tax Alert 2016-277 {} for our analysis of this guidance.) For this purpose, a covered employer generally is any employer with more than 100 employees, or more than 50 employees for employers that are federal contractors. The proposal requires the increased data to be reported on the revised Employer Information Report (EEO-1). The new EEO-1 would be modified to require covered employers to report Form W-2 earnings and hours worked for all employees by job category, and by race, ethnicity and gender. For each of the job categories, the proposal would require the compensation data to be categorized by 12 pay bands that are set forth by the Bureau of Labor Statistics. For example, an employer would report 10 black or African American men in the Technician job category in the third pay band ($24,240 - $30,679), or 10 white women in the Professional job category in the seventh pay band ($62,920 - $80,079).

The EEOC intends to publish the aggregate EEO-1 data in a manner that does not reveal any particular employer information. Furthermore, the EEOC is not permitted to release the EEO-1 data under a Freedom of Information Act request.

Revised notice

The revised noticed extends the due date for the new EEO-1 to March 31, 2018.

In an attempt to address some of the administrative concerns expressed by employers and others in response to the original notice, the revised notice modifies the "snapshot" period during which an employer must count employees to be reported on the EEO-1 from the third quarter to the fourth quarter. The revised notice also proposes that employers would use Box-1 of Form W-2 as the measure of pay for reporting on the EEO-1.

Implications

The EEOC's revised notice addresses some of employer's concerns about the administrative burden of collecting this data. However, the guidance continues to leave employers with questions as well as possible challenges in meeting these reporting requirements.

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