As we previously reported, on July 2, EEOC updated the its newly created website with long-awaited materials regarding the obligation of employers with 100 or more employees to submit pay data and hours worked data as part of the annual EEO-1 reporting obligations.
We anticipated EEOC would not change much relative to the materials the Agency published in 2016. For the most part that’s true but below is a summary of important changes, omissions and additions.
- Sample Forms: Thankfully, the only substantive change is EEOC corrected the pay data heading to “Salary Compensation Band” from “Annual Salary in Thousands” to clarify that the 12 salary bands are based on annual W-2, Box 1 income data, not annual salary.
- Instructions: EEOC has included some important clarifications but also, curiously, omitted text.
- Filers may use either a Type 8 or Type 6 form to report pay for locations with fewer than 50 employees. As with the EEO-1 Component 1 reports, filers using a Type 6 list, “must enter all employment data into the Consolidated report (Type 2). For Type 8 reports, the system “will automatically transfer to populate the overall Consolidated Report.” As usual, the Consolidated Report numbers much match the total of the other reports.
- The confidentiality provision in the new Instructions is more limited. EEOC has omitted the following statement that appeared in the 2016 Instructions: “The confidentiality requirements allow the EEOC to publish only aggregated data, and only in a manner that does not reveal any particular filer’s or any individual employee’s personal information.” This is a surprising omission given the regulations regarding confidentiality have not been changed. We expect (hope) EEOC will follow this statement, despite its omission.
- EEOC has also expanded the bases on which the Agency may reject a Freedom of Information Act (FOIA) request for pay data. “When the EEOC receives a FOIA request for EEO-1 data from the public, and when suit has not been filed on the investigated charge, it relies on FOIA Exemption 3 to withhold the EEO-1 data. Additionally, Exemption 4 of FOIA may potentially be applicable. Exemption 4 protects privileged and confidential trade secrets and commercial or financial information.” As reflected in the discussion of FAQs, below, this change is due to the recent Supreme Court decision in Argus Leader.
- Filers may use a proxy for exempt employee hours of 40 hours per week for fulltime employees, and 20 hours per week for part-timers, multiplied by the number of weeks in the year each employee was “employed.” This may result in inaccurate reporting – inconsistent with a filers actual hour standards. For example, fulltime employees may work only 37 hours per week. To allay concerns, the 2016 Instructions included the statement: “To the extent that the use of the proxy numbers cause some deviation from an exempt employee’s actual hours worked, the certification of the report as accurate would be considered appropriate.” Again, it is not clear why EEOC omitted this guidance. However, without providing substitute guidance it is less than clear whether EEOC has taken a different position.
- Frequently-Asked Questions (FAQs): EEOC has provided extensive answers to FAQs, notably:
- Filers are not required to use the same workforce snapshot date they used to file Component 1 reports for 2017 and 2018. Filers may choose a different snapshot date/period for Component 2 reporting.
- Regarding the reporting of hours worked for exempt employees, the FAQs seem to suggest that filers cannot deviate from the 40/20 hours per week proxy numbers, unless it reports actual hours worked
If exempt employees…work a standard 35 hours per week, can the employer report those hours instead of the 40-or 20-hour proxy? Yes. The employer has the choice to report actual hours or the designated proxy hours.
In other words, if 35 hours doesn’t necessarily represent actual hours worked for some or all exempt, fulltime employees, a filer cannot use a proxy of 35 hours. Filers would need, as an alternative, to report actual hours worked. However, filers need not report proxy hours for all exempt employees: it may report actual hours for some and proxy hours for others.
- Regarding FOIA requests, the FAQs specifically address the recent Supreme Court case. “Pursuant to the Supreme Court’s recent decision, Food Marketing Institute v. Argus Leader Media, — S. Ct. —, 2019 WL 2570624 (June 24, 2019), Exemption 4 protects information that is customarily and actually treated as private by its owner and provided to the government under an assurance of privacy.”
EEOC has held true to its word to provide additional information in advance of the start of the reporting obligation, not all of which we address above. Nor is the website complete. EEOC will continue to add information in the coming days.
Additionally, continue to check back with us as we approach the July 15 date on which the filing portal for Component 2 is schedule to open.