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The U.S. Equal Employment Opportunity Commission (EEOC) this week issued its final rule changing the way larger businesses report information regarding their employees on the employer information report, or EEO-1.  Having received thousands of comments on its previous proposed changes to the EEO-1 reporting, the EEOC has now formally issued its final rule on the mater, essentially adopting the proposed changes to the EEO-1 reporting process.  

In short, those changes will require EEO-1 covered employers, who are federal contractors and subcontractor and employers with 100 or more employees to report pay data, including hours worked, by employee gender, race and ethnicity.  The final rules additionally will alter covered employers’ reporting deadlines, moving it from September 30 to March 31.  As a result of this change employer will not need to report by September 30, 2017 for 2017.  The move to March will allow employers to use W-2 information when completing the EEO-1 to comply with these pay reporting requirements.  This new rule is estimated to impact approximately 60,000 employers employing 63 million employees in the U.S.  

The upshot of the EEO-1 is that it will provide valuable information to the federal government regarding companies’ pay practices, which, we can assume, will probably end up in an increase agency enforcement activities and lawsuits against employers who have disparate pay practices.  Companies would be wise to conduct detailed analysis of current pay practices to determine whether there are systemic and pay practices across the workforce that disparately impact employees based on their gender, racial and ethnicity. 

Thompson Coe and myHRgenius Tip of the Week is not intended as a solicitation, does not constitute legal advice, and does not establish an attorney-client relationship.


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Kevin M. Mosher

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