New EEO-1 Update Requires Employers to Provide Detailed Pay Data

Posted on August 19, 2019 by Rick Rossignol

Female Safety Engineer

The U.S. women’s national soccer team (USWNT) has been making worldwide headlines but not just for their historic FIFA Women’s World Cup win. Earlier this year, all 28 players filed a class-action lawsuit, claiming that they had been subject to gender pay discrimination.


Although it remains to be seen what will come of the team’s fight for equal pay, there’s a lesson to be learned here. Even though the majority of us work in average industries that don’t see the limelight, business owners must always be vigilant about how they’re compensating their employees for equal work.


Under the Equal Pay Act, men and women are required to be paid equal work for equal pay. The U.S. Equal Employment Opportunity Commission (EEOC) also stipulates that “The jobs need not be identical, but they must be substantially equal. Job content (not job titles) determines whether jobs are substantially equal … If there is an inequality in wages between men and women, employers may not reduce the wages of either sex to equalize their pay.”


To ensure fair compensation, employers are now being required to provide pay data on each of their employees, as per the recently revised EEO-1 regulations.


EEO-1 History and Summary


Additionally, the EEOC has since 1966 made it mandatory for businesses with more than 100 hires and federal contractors with 50 or more employees (and a contract or subcontract of $50,000 or more) to submit employment demographic data providing details regarding their sex, race/ethnicity, and job categories. These reports are typically due at the end of May each year, according to the EEOC.


During the Obama administration, however, the EEOC made it mandatory that covered employers disclose employees’ compensation data. Before this, the EEO-1 survey had companies submit employment data having to do with employees’ race/ethnicity, gender, and job category. But the new requirement asked employers to also include employees’ wage and hour data with the EEO-1 report.


In a turn of events, this requirement was reversed shortly after President Trump’s election, and the regulation regarding compensation reports was suspended, a move that was quickly contested by the National Women’s Law Center.


To thwart potential compensation discrimination, the EEOC, with the help of the federal courts, officially reinstated the compensation reporting requirement earlier this year. Companies with 100 or more employees will be required to submit 2017 and 2018 data about employee’s wages in addition to information regarding workers’ sex and ethnicity by September 30 of this year.


Who Has to File?


The following are a few of the required groups outlined by the EEOC who must file EEO-1 reports:


  • Private companies with 100 or more employees (excluding state and local governments, higher education institutions, primary and secondary public schools, and tax-exempt private membership clubs)
  • Companies with less than 100 employees (if the company is owned or affiliated with another company, or there is centralized ownership, control or management)
  • Federal contractors with 50 or more employees that are prime contractors or first-tier subcontractors and have a contract, subcontract, or purchase order amounting to $50,000 or more
  • Financial institutions that are paying or issuing agents for the U.S. Savings Bonds and or savings notes.


How to File an EEO-1 Report


Employers can complete their EEO-1 reports by using the EEOC website. If employers are filing these reports for the first time, the EEOC offers a simple registration process and also answers commonly asked questions about completing the EEO-1 report.


Effect on Employers


The new ruling will likely mean a very involved paperwork process for employers as they scramble to find past years’ data and file their EEO-1 reports by the September deadline. A report by the National Law Review suggests that a survey revealed that 75 percent of covered employers are doubtful of their ability to file the required report by the end of next month.


Delicate or not, employers have one of two choices: cross their fingers and hope that the EEOC abandons the new ruling altogether or risk being out of compliance with the law in failing to file the EEO-1 report.


RTR Consulting has more than 20 years devoted to developing effective and efficient human resources policies, procedures, and best practices for small, start-ups, and medium-sized businesses. Contact us today if you need help keeping your business running smoothly.

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