Editor's Note: This is the third of five articles this week by the labor and employment team at the law firm of Wright Lindsey Jennings of Little Rock examining key trends for employers and the workplace in 2017. Here's a quick look at important employment issues that could arise next year.
Changes are coming to the EEO-1 form certain employers must file with the U.S. Equal Employment Opportunity Commission (EEOC).
Beginning with the 2017 EEO-1, private employers and federal contractors with 100 or more employees will have to supply additional information. The form will require summary pay data, which will set out the pay ranges of certain categories of employees. Individual employee pay information will not be required. But summary pay data for private employees will go to the EEOC and data for certain federal contractors — those subject to Executive Order 11246 — will go to the U.S. Department of Labor.
For years, employers have reported information on the EEO-1 form by job category, and then by sex and ethnicity or race. The summary pay data requirement is new for 2017, and must first be reported on the new EEO-1 that will be due on March 31, 2018. The EEO-1 form for subsequent years will be due on each March 31 thereafter.
The 2016 EEO-1 deadline was Sept. 30, 2016, so employers will have 18 months to prepare for the change. Employers subject to the EEO-1 filing requirement should receive a notice from the EEOC describing the new filing and deadline.
For employers who must file the revised EEO-1, the first step will be to count and categorize employees by EEO-1 job category. They will then calculate the number of employees in each of 12 pay bands on the new EEO-1, categorizing the employees in each band by sex and ethnicity or race. Finally, the new form requires the employer to report the total number of hours worked that year by the employees in each pay band.
According to the EEOC, the newly required information will assist the agency in evaluating Title VII charges of employment discrimination, especially as they relate to pay discrimination, since the agency does a statistical analysis of EEO-1 data early in its investigations.
More Scrutiny
What does this mean for employers? Basically, more scrutiny of your pay practices, so be ready to explain why two employees who have the same job, the same experience and the same performance make different amounts of money.
Employers might even decide to hire counsel to conduct attorney-client privileged pay audits.
(Troy Price is a partner at Wright Lindsey Jennings in Little Rock and an experienced appellate lawyer. In addition to focusing on ERISA and other employee benefits litigation, he is also recognized as an authority in First Amendment law.)