California’s Department of Fair Employment and Housing (DFEH) has issued new guidance in the form of frequently asked questions on the state’s pay data collection and reporting requirements. To help employers get ready to comply, on February 1, 2021, DFEH released a template pay data report form and guide for submitting reports through the portal. DFEH’s pay data submission portal will be available by February 16, 2021. Once the portal is live, employers must use the online portal to submit their pay data reports.
On March 4, 2019, the U.S. District Court for the District of Columbia issued an order lifting the stay on the EEO-1 pay data reporting requirements, leaving employers uncertain about their obligations.
As we previously discussed, for the last 50 years, large employers with 100 or more employees, and federal contractors with 50 or more employees, must submit annual Employer Information Reports (EEO-1) to the Equal Employment Opportunity Commission (EEOC), which identifies the number of employees working for the company by job category based on race, sex and ethnicity.
Last year, the U.S. Equal Employment Opportunity Commission (EEOC) unveiled its proposed revisions to the Employer Information Report EEO-1 (EEO-1). Previously, the EEO-1 directed federal contractors and employers with 100 or more employees to report annually the number of individuals that they employ by job category, race, ethnicity and gender in 10 different job groupings. As part of the Obama administration’s enhanced focus on equal pay, the EEOC’s proposed EEO-1 revisions aimed to expand the information collected to include pay data and working hours to help the EEOC discover potential discrimination in employment and pay equity.
The EEOC finalized its new EEO-1 in September 2016, and the additional information was to be provided by employers by the next reporting deadline in March 2018. That was the plan until the Office of Management and Budget (OMB) stepped in.
For approximately fifty years, the Equal Employment Opportunity Commission (“EEOC”) has collected workforce data about race, gender, ethnicity and job category from all businesses with 100 or more employees, using the EEO-1 report. In an effort to combat pay discrimination, last year the EEOC announced that it finalized regulations expanding the information collected in the annual EEO-1 report to include pay data.
The revised EEO-1 form requires employers to collect aggregate W-2 earnings and report the number of employees in each of the twelve pay bands (spanning from $19,239 and under to $208,000 and over) for the ten EEO-1 job categories (Executive/Senior Level Officials and Managers; First/Mid Level Officials and Managers; Professionals; Technicians; Sales Workers; Administrative Support Workers; Craft Workers; Operatives; Laborers and Helpers; Service Workers) and classified by race, sex and ethnicity. The revised EEO-1 form has been largely criticized by employers claiming that the collection of W-2 earnings, without any context to explain legitimate non-discriminatory reasons for pay disparities (e.g., education, training, experience, tenure, merit, etc.) will unnecessarily open the door to increased scrutiny and investigations. To make matters worse, the EEOC has not been very forthcoming about how the information would be analyzed and used, other than as a “screening tool” to identify pay discrimination.