With the postponement of Component 2 of the EEO-1 report at the end of August, our compliance team provides an overview of what employers should expect going forward.  

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EEO-1 Pay and Hours Reporting Requirements Postponed – What Next?

Wed Sep 6, 2017

After 50 years of filing EEO-1 Reports, employers were bracing for big changes in the report this year – including the addition of a new pay and hours data section of the report (also known as “Component 2” of the report), first proposed back in January 2016 by the Obama administration. It’s been widely debated as to whether the Trump Administration would roll back the new requirements of the report. 

On August 29, 2017, after months of speculation, the Office of Information and Regulatory Affairs (OIRA),  which is part of the Office of Management and Budget (OMB), initiated an immediate and indefinite postponement of Component 2 of the report).  The new EEO-1 report was originally approved on September 29, 2016, and Component 2 of the report was the result of the Obama administration’s efforts to make pay and hours data available to government investigators to help identify pay inequity in the workplace. 

The EEO-1 report (as approved on September 29, 2016) required employers (generally, private employers with 100 or more employees and certain federal contractors) to report employee data in two components based on a defined workforce snapshot period between October 1 and December 31:

  • Component 1: Gender and Race/Ethnicity Data
    • Race, ethnicity and gender data by occupational category (employers have always submitted this information).
  • Component 2: Pay and Hours Data
    • Summary pay data about the total number of full and part-time employees during the reporting year in each of 12 pay bands listed for each EEO-1 Job Category. Employers were required to use earnings reported in Box 1 of the W-2 Form.
    • Aggregate hours worked data about the number of hours worked that year by all the employees accounted for in each pay band.

Following the OIRA’s postponement of the Component 2 portion of the new EEO-1 report, the Equal Employment Opportunity Commission (EEOC) issued a statement telling employers they should “plan to comply with the earlier approved EEO-1 (Component 1)” by the March 2018 deadline.  The EEOC is expected to release more formal guidance soon.

The postponement of Component 2 of the report comes after many business groups condemned the pay and hours worked requirements as too burdensome on employers. At the same time, advocates of the revised EEO-1 report argued that it would help create transparency about pay inequality based on race, gender and ethnicity.

The OMB and EEOC will be investigating how to proceed, including looking at the burden the data collection placed on employers and balancing that against the goal of combatting pay inequality.  Following its review, the EEOC could take one of many steps, including getting rid of the pay and hours collection requirement completely, or only requiring the collection of a smaller amount of data.

Interested in hearing more about changing regulations and workforce trends? Join us at INSIGHTS 2017 to continue the discussion, and download Ceridian's guide, The Seven Compliance Trends Every Employer Should Know.

Disclaimer: The information provided in this post is provided for informational purposes only and should not be relied upon or construed as legal advice and does not create an attorney-client relationship. You should review with your legal advisors how the laws identified in this post may apply to your specific situation.