Skip to main content

EEOC Proposes Collecting Pay Data to Combat 'Pay Discrimination'

On Feb. 1, the U.S. Equal Employment Opportunity Commission (EEOC) announced plans to require certain large employers to include "data on employees' W-2 earnings and hours worked" as part of their annual Employer Information Report (better known as an EEO-1). While the proposals are open for public comment until April 1 and may be modified before implementation, it is a safe bet that large employers (specifically, those with 100 or more employees) will face these additional reporting requirements as early as September 2017. Employers are thus advised to begin preparing now.

"Component 2" of the EEO-1 report would collect data on wages and hours worked.

Under authority granted by Title VII of the Civil Rights Act of 1964, the EEOC has, since 1966, required certain employers (namely, government contractors with more than 50 employees and private sector employers with more than 100 employees) to file an EEO-1 Report each year. For decades, these EEO-1 Reports have gathered demographic data of the reporting employer's workforce, covering seven race and ethnicity categories and ten job classifications, sorted by gender. The EEOC's proposed rule would, as of the September 2017 reporting cycle, require these employers to include data on their employees' wages and hours worked.

The proposal stems from the multi-agency National Equal Pay Task Force that President Obama established in 2010 "to identify ways to improve enforcement of federal laws prohibiting pay discrimination." As part of that Task Force, the EEOC commissioned a 2012 report from the National Academy of Sciences, as well as a subsequent "independent Pilot Study" that was completed in September 2015. The EEOC also convened a March 2012 forum of business representatives, statisticians, human resources professionals and information technology experts to "engage in brainstorming" about ways to collect pay data. And, in April 2014, the President directed the Secretary of Labor "to develop a compensation data collection proposal."

This history should come as no surprise. "Pay equality" has long been a focus of the Obama Administration, and it is plain from this history that the Administration and the EEOC are "invested" in this proposal. In short, while there may be modest "tweaks" following the public comment period, it is highly likely that the new reporting rules will be adopted substantially as proposed.

Continue Reading (subscription required).