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4477
Phone: 281.880.6525

Expanded EEO-1 Form Means New

Responsibilities for Employers

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The Equal Employment Opportunity Commission (EEOC) has finalized its

plans to incorporate pay data into the annual EEO-1 form. This is the
demographics-based employee census report that employers have been filing
since 1966. In a process that has been in the works since 2010, the EEOC
agreed to change the originally proposed reporting cycle so that it will
coincide with the calendar year, simplifying the data collection process.

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"The new data will improve investigations of possible pay discrimination which
remains a contributing factor to persistent pay gaps," the EEOC stated upon
announcing the final rules. Technically the EEOC has been authorized to use
the new form for only two years; extension of its use will require approval
from the federal Office of Management and Budget.
Employers have a fair amount of time to pull their reports together in the first
reporting cycle. Specifically, reports covering their 2017 employee data won't
be due until March 31, 2018 (however, 2016 EEO-1 reports were still due on
September 30 of this year). Federal contractors with 50-99 employees will
continue to be required to provide employee census data, but won't have to
supply the pay data. Larger ones, like the rest of the private sector, will.

The flexible three-month "snapshot period" during 2017, when data must be
collected, can be any pay cycle between October 31 and December 31, 2017.

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Job Categories
The job category divisions for employees on the new EEO-1 form remain
the same:

1. Executive/senior level officials and managers,

2. First/mid-level officials and managers,

3. Professionals,
4. Technicians,
5. Sales workers,

6.

Administrative support workers,

7. Craft workers,
8. Operatives,

9. Laborers and helpers, and

10. Service workers.

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Using the new EEO-1 form, the numbers of employees within each of the
current demographic categories will be reported within 12 "pay bands." That
is, individual salaries and wages won't be disclosed. Incomes for determining
pay brackets are to be taken from Box 1 of the W-2 form. (This is expected to
simplify the integration of payroll and human resource data systems for
purposes of generating these reports.)

The demographic groups, divided by gender, are Caucasian, African American,

native Hawaiian or Pacific Islander, Asian, Native American, and "two-or-more
races."

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Pay Bands
Here are the 12 pay bands, the same brackets used by the federal Bureau of
Labor Statistics for its Occupational Employment Statistics survey:

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.

$19,239 and under;

$19,240 - $24,439;
$24,440 - $30,679;
$30,680 - $38,999;
$39,000 - $49,919;
$49,920 - $62,919;
$62,920 - $80,079;
$80,080 - $101,919;
$101,920 - $128,959;
$128,960 - $163,799;
$163,800 - $207,999; and
$208,000 and over.
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The resulting picture will give the EEOC a window into how employees of
varying ethnic groups and genders are paid within each job category. For
example, if Asian male technicians as a group appear to be paid more than
female African Americans, that could set off alarm bells at the EEOC.

Similarly, with aggregate hours-worked data (covering the entire year, not just
the "workforce snapshot" period) segmented by gender, ethnic group and pay
band, the EEOC will be able to make certain inferences. As examples, the data
might appear to indicate one group is given more opportunities to work
overtime than others, or that part-time work might be more prevalent in one
group. More broadly, the data can show whether employees of one gender
are, on average, paid more than members of the opposite sex.
Previously, in searching for evidence of illegal discrimination, the EEOC had to
make inferences from the kinds of jobs each demographic group tended to be
grouped into.

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Useful for Employers?

The EEOC believes this additional data will be useful to employers as well,
helping them to recognize any pay and work patterns that might suggest a
possible discriminatory pattern. If data indicate a possible problem, employers
might have an opportunity to address it preemptively.

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However, what's really going on within any workplace can be more

complicated than these numbers might suggest. For example, because pay
data is based only on Box 1 of the W-2, that could present a misleading
picture.

Suppose stock options are awarded to senior employees in perfect proportion

to the company's gender and ethnic make-up. (No income is recognized and
reflected on the W-2 until the options are exercised.) Suppose further that a
handful of men exercise those options in a year when none of the female
option holders with the same job classification do. That could result in an EEO1 report that improperly suggests that men are paid more than women in the
same job category.
Also, the EEO-1 form data doesn't reveal other relevant factors that could
skew compensation in one direction or another, such as education level,
seniority and performance ratings.

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Still, an EEO-1 report with demographically associated statistical aberrations

wouldn't by itself prove employment discrimination, but only whet the EEOC's
appetite for an investigation.
A sample of the new EEO-1 form is available on the EEOC's website. It's
advisable to check it out now and make plans for the data collection process
that will be required to complete the form. You may be able to gauge whether
the data you will ultimately input would put you in the EEOC's crosshairs.

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