On Friday January 29, 2016, the Equal Employment Opportunity Commission (EEOC) announced proposed changes to its annual EEO-1 report that will significantly impact many employers if the changes are enacted. The EEOC proposes that employers should be required to submit pay data as part of their EEO-1 reports. The revised EEO-1 report was proposed as part of the White House's commemoration of the seventh anniversary of the Lily Ledbetter Fair Pay Act which was President Obama's first piece of legislation.
Currently, employers with 100 or more employees and federal contractors with 50-99 employees must submit the EEO-1 report annually. The EEO-1 report provides the EEOC with information from private sector employers on the race, ethnicity, sex, and job category of its workforce. The proposal would add aggregate pay data on pay ranges and hours worked to the information collected - starting in September of 2017. Only employers with 100 or more employees would be effected by the changes as federal contractors with 50-99 employees will be excused from reporting pay data.
The EEOC states that collecting pay data will allow it to "assess complaints of discrimination, focus agency investigations, and identify existing pay disparities that may warrant further examination." The agency also intends to publish aggregated data so that employers can self-conduct audits of their own pay practices to help "facilitate voluntary compliance."
Employers should take note of this proposed rule. Not only does it impose additional reporting burdens for many employers who will now have to gather this information, it may also place some employers at a greater risk of being investigated over their pay practices. EEO-1 reports may also be discoverable by private litigants in certain civil claims. Thus, employers may want to prepare for the new rule by conducting an audit of their current pay practices, taking steps to ensure such an audit is covered by the attorney-client privilege to prevent discovery.
Public comments on this proposed rule are due by April 1, 2016. The EEOC also intends to hold a public hearing on the proposed changes. Nemeth Law will continue to monitor and report on any changes to the proposed rule.