In a few weeks, the 2nd quarter of calendar year 2017 will roll in. With the fate of the new EEO-1 Report still uncertain, most contractors are, understandably, getting anxious. Will the EEOC implement the changes or will it table the implementation until further review? Should contractors prepare for the September 30, 2017 filing or will they have more time to prepare for the first deadline of March 31, 2018?
Two weeks after being named as the acting chair of the EEOC, Victoria Lipnic, in her first public comment in February, addressed the requirements for filing the EEO-1 reports under the new regulations. She expressed that there is a need to re-evaluate the costs and benefits of the revised EEO-1 reporting – something that falls directly under the mandate of the Trump administration for all agencies to “rethink the regulations they have on the books.” Although Ms. Lipnic was vocal about her dissenting vote on the modifications, she was also quick to point out that the commission operates by vote, and, therefore, the agency’s current position cannot be altered by only one commissioner.
In addition to filing gender and race data, the new EEO-1 Form requires all employers (private and federal) with 100 or more employees to report summary pay data by gender/race. Employers will be required to indicate the total number of full/part time employees and total hours worked within 12 pay categories for each of the 10 EEO job classifications. Data collected through the EEO-1 report is accessed by the OFCCP for the purposes of establishing their audit list, however, summary pay data for federal contractors and subcontractors will be routed directly to the OFCCP. The EEOC and the OFCCP, in their respective capacities and responsibilities, see the inclusion of pay in the EEO-1 report as an integral tool for more effective and efficient investigations of pay discrimination. The federal contracting community-at-large applauds the efforts but questions the usefulness of 12×10 aggregated pay data for investigation of pay discrimination.
‘Retool and prepare now or wait and see?’, that is the question. Many federal contractors are holding out hope that the Trump administration will eliminate pay data requirements and revert back to the previous EEO-1 reporting requirements. Many contractors aren’t waiting and, in anticipation of the change, have developed a game plan and/or methodology for structuring their data for submittal. For those who are still holding out hope, it is recommended that you be proactive and at least consider creating a test file to assess your gaps in data.
Steps to creating a test file:
- Export from your payroll software or connect with your payroll service provider, payroll or compensation department to retain a list of employees (with employee ID’s), their associated W-2 (Box 1) pay and hours worked for the 2016 calendar year.
- Export from your HRIS the requisite demographic data for all employees (as required).
- Create a single data file by merging payroll with HRIS employee data files.
- Sort pay in ascending order, create a new column and then create and label each employee in accordance with their corresponding EEO-1 report compensation band.
- Verify that your data aligns with the EEO-1 report format through Pivot Tables.
Additional factors to consider when compiling total number of hours worked:
- How is the organization capturing the actual hours worked for exempt employees
- How the reported total hours will affect compensation analysis (i.e., hours worked of part time employees and exempt employees).
Independent of the changes to the EEO-1 form and requirement of submitting summary pay data, best practices, laws and regulations dictate that contractors should review their compensation system and analyze their data to ensure equal pay and eliminate disparities.
Article co-authored by John Piatt, Director of EEO/AA Client Support & CERT, Biddle Consulting Group, Inc.