On April 25, 2019 a federal judge announced a ruling that will require employers to collect 2018 employee pay data and hours worked by race, ethnicity and gender and submit it to the Equal Employment Opportunity Commission (EEOC) by September 30, 2019. On May 1, 2019, the EEOC decided that they will collect 2017 pay data in addition to the 2018 pay data that was previously announced.
The EEOC is expected to open the portal for employers to submit 2017 and 2018 pay data beginning on July 15, 2019.
Note: Employers are still required to submit component 1 of the EEO-1 form by May 31, 2019.
What are the new EEO-1 reporting requirements?
The current EEO-1 form requires company employment data to be categorized by race, ethnicity, gender and job category. The new rule requires employers to accurately track and report the number of hours employees work, identify their employees’ earnings over a 12-month period and classify employees in one of 12 pay bands. According to the EEOC, the new regulations will provide a much-needed tool to identify discriminatory pay practices where they exist.
Which employers will be affected?
Private employers, including federal contractors with 100 or more employees, will be required to report aggregate W-2 income and hours worked by gender, race, ethnicity and job category. Federal contractors with 50-99 employees would not report pay data but continue to file component 1 of the EEO-1 form.
What does this mean for your organization?
The amount of additional data employers will be required to provide is very significant. If employers are unable to generate compensation, hours worked and pay bands into one report, it will create additional administrative work and could result in costly reporting errors.
With these challenging new requirements, employers need one database for HR, payroll and time tracking to efficiently and accurately generate the necessary data to file the new report.
When are organizations required to comply?
- Employers are required to file Component 1 of the EEO-1 form without including pay data information by May 31, 2019. To complete Component 1, employers must provide the number of employees who work for the business by job, race, ethnicity and gender.
- Employers are required to file Component 2 (pay data) by September 30, 2019. Component 2 data now requires employers to include the hours employees work and pay information from their W-2 forms by race, ethnicity and gender.
What are the penalties for non compliance with EEOC regulations?
If an employer is found to have engaged in pay discrimination, it could face litigation from the EEOC and liability for back wages and other damages.
How Paycor can help
Paycor's HCM platform offers a unified experience, with HR, time and payroll data easily accessible in one location. Contact us and learn how we can help your organization prepare for the new regulations.
To eliminate stress and help your organization prepare, we’ve created an expert EEO-1 checklist and guide so you don’t have to worry about missing critical information when filing. Click here to download the checklist and here to access the guide.
This information is not intended as legal advice. Please consult your advisor or attorney with specific questions.
Take Compliance Quiz
How effectively is your organization managing compliance risk? Find out and get a customized plan.Take Quiz
Stay Up to Date
Sign up to receive our latest research and expert advice.
Check your inbox for an email confirming your subscription. Enjoy!