By Carrie S. Bryant
On January 29, 2016, the EEOC announced its proposed addition of employee pay data and hours worked to EEO-1 reports. If the proposal is adopted, the EEOC, in a joint effort with the OFCCP, will collect aggregate data on employees’ W-2 earnings and hours worked, starting with the September 2017 EEO-1 report. The requirement will apply to employers with 100 or more employees, including federal contractors.
Pursuant to the proposal, employers will report the total number of employees by job category, who fall within 12 pay bands. According to the EEOC, the pay data will provide the EEOC and the OFCCP with information regarding pay disparities across industries and various occupations. The information will be used to assess complaints of discrimination, more directly target investigations, and identify differences in pay that the agencies feel may warrant further examination. Data regarding hours worked will allow for the analysis of pay differences while accounting for aggregate variations in hours. The EEOC also intends to publish aggregate data.
What does this mean for employers?
If the proposal is approved, there will potentially be challenges for employers.
Pay data confidentiality may be an issue. The EEOC and OFCCP jointly collect data on the EEO-1 report via their Joint Reporting Committee. The EEOC is required to keep EEO-1 data confidential under Title VII. The OFCCP keeps data confidential to the maximum extent permitted by law, pursuant to the Trade Secrets Act and Exemption 4 of the Freedom of Information Act. Nonetheless, even with these parameters, and with pay data being reported in the aggregate, individual pay data may be revealed. It is quite conceivable that, in categories where there are very few employees, reporting “aggregate” pay data will essentially amount to reporting pay data of a small group of individuals, making it very easy to discover the individuals’ pay. In other words, individual privacy may be at risk.
Employers will need to account for the additional expense and resources required to include pay data and hours worked. Arguably, pay data is already collected and maintained by employers. Further, to the extent that an employer uses HRIS software, that technology should help facilitate the EEO-1 reporting process. Yet, there will still be an expense involved in integrating the newly-required information into the EEO-1 report, and reporting the data.
Employers who do not currently collect information on actual hours worked for salaried employees may be burdened by this new requirement, or may find it difficult to comply at all. The EEOC is proposing that an employer report only data that it already maintains regarding hours worked for salaried employees, and is not proposing that employers begin collecting any additional information. So, how will an employer provide data that it does not have? The EEOC, too, appears to be asking this very question. To this end, the EEOC is seeking input regarding how to report hours worked for salaried employees.
What happens next?
Proposed changes are available for inspection on the Federal Register website and officially published in the Federal Register. Members of the public have until April 1, 2016 to submit comments. Once the Office of Management and Budget approves the revised EEO-1 report, the EEOC will post a notice of its approval on its website. In addition, the EEOC will inform EEO-1 respondents of the new data collection requirements.
This article was written by Carrie S. Bryant who is a member of Detroit SHRM’s Legal Affairs Committee and an attorney of the law firm of Dykema Gossett PLLC, located in its Bloomfield Hills, MI office. She can be reached at (248) 203-0728 or email@example.com.
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