The Equal Employment Opportunity Commission (EEOC) has finalized its anticipated rule regarding the addition of pay data to its annual Employer Information Report (EEO-1). Beginning on March 31, 2018, private employers with more than 100 employees and federal contractors with more than 50 employees must provide summary employee pay data, based on W-2 earnings, as well as hours worked, in EEO-1 reports. The pay and hours data changes are a coordinated regulatory update between the EEOC and the Department of Labor's Office of Federal Contract Compliance Programs (OFCCP).

The final rule requires covered employers to submit summary pay data broken out over 10 defined job categories, in addition to the head count demographic information already required by existing EEO-1 report. The new rule does not require employers to report individual pay, salaries, or any personally identifiable information.

The finalized rule does not affect the 2016 EEO-1 report, which was due on September 30, 2016.

The EEOC will use the reports to compile and publish aggregated data and to assess complaints of discrimination, focus agency investigations, and identify existing pay disparities that may warrant further examination. The EEOC also says that these reporting requirements will help employers conduct their own analysis of their pay practices to facilitate voluntary compliance.

Employers should prepare for the new EEO-1 reporting requirements well in advance of the March 2018 reporting requirement. To illustrate one potential program, many employers are expecting that the data required is stored in different and non-compatible payroll and human resources information systems, making the collection of the information a challenge. In addition, in anticipation of regulatory inquiries and/or enforcement actions by the EEOC and OFCCP, many employers are undertaking self-audits to identify potential issues before reporting pay data in March 2018. Ballard Spahr's Labor and Employment Group has developed pay data analysis processes to help covered employers identify and address possible issues related to the new EEO-1 reporting requirement.

Ballard Spahr's Labor and Employment Group advises employers on all aspects of labor-management relations, including providing advice about EEO-1 reporting.

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