EEO-1 Report Pay Reporting Revision Now in Federal Register!
Today, July 14, the EEOC published an update of the EEO-1 pay data reporting proposal in the Federal Register, announcing a second public comment period. The second round of public comments are due on August 15, 2016.
Unfortunately, many of the criticisms and concerns raised by the employer community where largely ignored by EEOC. In a nutshell, EEOC is still proposing that employers submit W-2 compensation data instead of base pay and will be required to submit hours worked for both exempt and non-exempt employees.
Although the EEOC rejected most of the concerns expressed by commenters, the revised proposal does contain one major change and one clarification.
The Major Change: March 31 Deadline
The major change involves the reporting period. One of the major criticisms of the initial proposal was that employers would have to prepare W-2 data twice: once during the normal tax period and again during the EEO-1 reporting period.
In the revised proposal, the filing deadline has been changed to March 31, so that employers can use the W-2 information compiled for tax purposes. Under the revised proposal, the employer would report the annual W-2 earnings only for those employees employed by the company from October 1 through December 31. The first report would be filed during the 1st quarter of 2018 with a due date of March 31, 2018.
Employers would also provide the total number of hours worked during the year for each employee.
The Clarification: W-2
The initial proposal did not define the term, “W-2 Earnings.”
The revised proposal clarified that employers will provide earnings from Box-1 of the W-2. The amount reported in Box 1 (Wages, Tips and Other Compensation) is an employee’s “taxable compensation”, not gross wages. Taxable compensation is gross wages (the total amount of earnings on your earnings statement) less those items the IRS considers “non-taxable.”
Things That Remain Unchanged
- All employers with 100 employees or more would be required to submit an EEO-1 report with Component 2 (compensation data).
- Reporting by pay bands as proposed in the original proposal remains the same.
- EEOC continues to propose that “hours worked” be reported on the form.
- As DCI has indicated previously, this would be required of both exempt and non-exempt employees.
- EEOC remains committed to periodically publishing results pay disparities by race, sex, industry, occupational groupings, and Metropolitan Statistical Area (MSA).
You can find DCI’s quick analysis of the original proposal here.
Please stay tuned as DCI continues to inform our clients and other stakeholders on the proposals. Should you want to have your voice heard in the next public comment period, please reach out to your DCI representative.
By Joanna Colosimo, Senior Consultant; Mike Aamodt, Principal Consultant; and David Cohen, President at DCI Consulting Group