New EEO-1 Reporting Requirements: Large Employers Now Required to Submit Employee Wage Data to the Federal Government

The United States Department of Labor and the United States Equal Employment Opportunity Commission ("EEOC") finalized regulations requiring private employers and federal contractors with 100 or more employees to report employee wage data on the annual Employer Information Form ("EEO-1") submitted to the EEOC. This additional information will first be due starting March 31, 2018. It will subsequently be due every year on March 31. The deadline to file the 2016 EEO-1 remains September 30, 2016, giving employers 18 months to prepare for this change.

Federal contractors or subcontractors and private employers with fewer than 100 employers are unaffected by this new rule and will continue their current practice. Federal contractors or subcontractors with 50-99 employees will not report wage data but will continue to count employees by job category and then by sex and ethnicity or race. Federal contractors and subcontractors with fewer than 50 employees and private employers with less than 100 employee do not file EEO-1 reports at all.

Federal or private employers with 100 more employers, however, will have a new process to follow for recording this data to the EEOC. First, they need to count and categorize employees by EEO-1 job category. These ten job categories remain unchanged from prior EEO-1 forms. The employer then must categorize the employees by sex and ethnicity or race. The sex and ethnicity or race categories also remain unchanged. Employers count their employees during a "workforce snapshot period," which is any pay period the employer choses between October 1 and December 31. Next, the employer must count its employees in one of twelve pay bands that are listed on the new EEO-1. To determine which band an employee falls into, employers must look to the employees' W-2 earnings, which are reported in Box 1 on the W-2 form. For the 2017 EEO-1, employers will use the employees' income for the year January 1 through December 31, 2017. The employer then counts the number of employees in each pay band by sex and ethnicity or race. Finally, the employer reports the total number of hours worked that year by employees in each pay band. For employees who are exempt under the Fair Labor Standards Act, employers are given a choice on how to count their hours"”they can use either 40 hours per week for full-time employees and 20 hours per week for part-time employees, or they can report the number of hours the employees actually worked.

The wage data the EEOC collects will be protected by strict confidentiality requirements. This wage data will be used to help initially assess the allegations made in a discrimination charge filed with the EEOC. The EEOC will also periodically publish the data and industry reports that may be useful as comparative data.