Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
In the cycle of seasons, July is when an employer’s thoughts turn to the filing of its annual EEO-1 reports. Since 1966,1 employers with 100 or more employees that are subject to Title VII have been required to annually file this report, providing the Equal Employment Opportunity Commission (the “EEOC”) with data on the number of individuals employed, their distribution by legal entity and location, and their demographic characteristics. In addition, federal contractors with 50 or more employees are also required to file an annual EEO-1 report. For decades, employers have been required to file the EEO-1 report each year by September 30 with data based on a “snapshot” of their workforce taken sometime between July and September. But not this year.
No EEO-1 filing is required, or even possible, this fall.
As part of the Obama administration’s interest in addressing the persistent gap in pay between women and men and minorities and non-minorities, the EEOC and the Office of Federal Contract Compliance Programs (“OFCCP”) considered several options over a period of years for requiring employers to report on employee compensation. However, creating a reporting tool that would not be unreasonably burdensome, would provide the agencies with meaningful data, and would protect the confidentiality of employer data and workers’ privacy, proved difficult. The solution that was finally adopted by the EEOC and OFCCP – over strenuously asserted employer concerns – involved additions to the EEO-1 Report and changes in the EEO-1 reporting cycle.
The revised EEO-1 report now requires employers to provide information on employee compensation and hours worked in addition to demographic information.
No report is required in the fall of 2017. The next required report will have to be filed by March 31, 2018, based on a workforce “snapshot” taken between October and December of 2017. The new report will require employers to provide information on the compensation paid to the employees included in the snapshot and their hours worked. Compensation is to be reported based on the pay reported by the employer in Box 1 of the employees’ 2017 W-2 forms.
Controversy and Confusion
Employer reaction to the new EEO-1 report has been almost uniformly negative. The report will be difficult to complete and, particularly for larger employers, will require substantial investments in personnel and software in order to be able to efficiently address the requirements. At the same time, there is substantial uncertainty as to whether the collected data can be productively and effectively used by the EEOC or OFCCP. The broad nature of the data that employers must now provide and the absence of other data that might legitimately explain pay differences make any analysis of the new EEO-1 questionable. In other words, the new report imposes substantial burdens on employers without clearly advancing the goal of pay equity.
The many concerns raised with regard to the new reporting requirements were reflected in the EEOC’s narrow approval of the new form by a 3-2 vote along party lines. In addition, Republicans in Congress have also expressed concerns regarding the new requirements. Therefore, given the results of the November election, there was substantial speculation that the new requirements would be overturned. That speculation appeared to be well grounded when, in February 2017, acting EEOC Chair, Victoria Lipnic, publically expressed interest in reconsidering the new requirements.
Thus faced with substantial compliance costs and a reasonable possibility that the new reporting requirements might be abandoned, many employers have held off on preparations to satisfy the new reporting requirements.
Unfortunately, since February 2017, uncertainty regarding EEO-1 reporting requirements has only increased. While the Republican EEOC Commissioners will likely remain interested in addressing the problems associated with the new EEO-1 report, there is also interest in the White House and within the EEOC in continuing to address issues of importance to women. Accordingly, it appears that a simple reversion to the old EEO-1 report is less likely to occur except as part of some new initiative to address pay inequities. As there are significant challenges to designing such initiatives, particularly in the limited time remaining before the new EEO-1 report must be prepared, it is far from clear what will happen.
Although it should be noted that there have also been several proposals raised in Congress to deny the EEOC and OFCCP funds to use in conducting a 2018 EEO-1 survey, the likelihood of such a proposal becoming law appears, at least for now, to be a long shot.
The Bottom Line
First, although it may be some time before employers know whether and what they will be required to file in 2018, it is clear that no EEO-1 reporting is required in September of 2017. Employers should not be pulling data to prepare such a report and should not attempt to file a fall 2017 EEO-1 report.
In the face of continuing uncertainty regarding the revised report, conservative employers, at this point, may want to begin preparations to comply with the new requirements. Employers that are more tolerant of risk, on the other hand, may want to continue to take a wait-and-see approach, understanding, however, that they may then have difficulty filing a complete and timely report in the event the new requirements remain in place.
Second, federal contractors that are subject to the Vietnam Era Veterans Readjustment Assistance Act are required to also file a VETS 4212 report in addition to an EEO-1 report. The VETS 4212 report provides data on the number of veterans in the employer’s workforce. The requirements relating to the VETS 4212 report are unchanged. Therefore, contractors that are required to file VETS 4212 reports should be preparing those reports and filing them by September 30, 2017.
1 See EEOC, Early Enforcement Efforts, https://www.eeoc.gov/eeoc/history/35th/1965-71/early_enforcement.html.