Complying with the EEO-1 reporting
This article provides information on legally required demographic reporting in the United States. It gives an overview of which employers need to take action, what the deliverables are, how to get started, and how to use the PayAnalytics software to help meet the local requirements.
In the US, there is no national requirement for employers to report or analyze their pay gaps per se. However, the Equal Employment Opportunity Commission (EEOC) does require many companies to report key demographic and pay data. This data helps the EEOC and other agencies better understand and address the pay gap in the US. It also informs discrimination investigations. The required report is known as the EEO-1.
Reporting organizations should choose a snapshot period, which is a single pay period from the last quarter of the year. The reporting should include all full-time and part-time employees that were employed during that period.
Reporting is done annually but the dates are not fixed. The due date for reports is typically announced in January and falls several months later. In 2023, the data collection is tentatively scheduled to open mid July.
In this article we will break down the EEO-1 reporting requirements and help you to answer four questions:
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Please keep in mind that the articles in the PayAnalytics Help Center do not offer legal advice.
Who does it apply to?
The EEO-1 report is mandatory for all private employers with 100 or more employees and financial institutions and government depositories with 50 or more employees. It is also required for federal contractors or first-tier subcontractors with 50 or more employees and contract(s)/subcontract(s) amounting to $50,000 or more.
The following organizations do not have to submit an EEO-1:
Institutions of higher education,
American or Alaska Native tribes,
Tax-exempt private membership clubs (other than labor organizations).
What is the requirement?
An EEO-1 report involves categorizing data by race/ethnicity, gender and job category. The report also shows how different demographic groups fall into different compensation brackets.
There are a few different variations (or “types”) of EEO-1 reports, though they all follow the same basic template. For organizations with a single establishment, a Type 1 report is all that is needed.
However, organizations with multiple establishments need to submit several EEO-1 report types, such as:
A consolidated report (Type 2) for all employees at the organization,
A specific report for the organization's headquarters (Type 3), independent of the number of employees at the headquarters,
A specific report for each establishment with 50 or more employees (Type 4),
A specific report for each establishment with fewer than 50 employees (Type 8).
How does PayAnalytics help you to meet the requirement?
Preparing your dataset
Note that a dataset containing at least the following data needs to be imported prior to generating the report:
Unique employee ID (mandatory for all datasets),
Compensation,
Gender and race/ethnicity (based on self identification if possible),
Job Family or Category (Note that the EEOC requires the use of 10 specific job categories. If the existing data uses a different classification, these can be mapped in the system.).
Generating the report:
You can create a EEO-1 report with just a few clicks:
From your navigation head to Reports and select your relevant dataset (if not already automatically selected).
Click Create new report and find the EEO-1 (US) report under Government mandated reports, as illustrated the following picture:
Creating new EEO-1 report
When selecting the report, you will be prompted to configure following fields in your dataset:
Compensation (defined as wages in IRS W-2 form), as presented in the following picture:
Compensation and hours section
Job family (which can be mapped to the appropriate 10 EEOC categories), as illustrated in the following picture:
Job category section
Demographic variable (gender and ethnicity, which can be mapped to the EEOC categories), as presented in the following illustration:
Race/Ethnicity section
Click Generate report to view the required report sections and results.
This report is automatically exported and downloaded as an excel file.
The EEO-1 report itself has a following structured:
The job categories and pay ranges as rows,
The demographic groups (both gender and ethnicity) as columns,
Volume (or number) of employees that fall into the various categories as data.
Now that you have the report, what should you do? Other than reporting, there are no further requirements in terms of target numbers or corrective action. However, it's important to submit the report annually.
Which steps should we take next?
Once the report is generated, it should be uploaded to the EEOC’s submission platform.
Although reporting is mandatory, there are no fines associated with non-reporting. However, there may be other practical consequences. Audits are conducted for federal contractors and during discrimination investigations. A negative audit outcome can have adverse consequences for the organization. It could also bring about more consequences such as additional audits or a discrimination case.
Conclusion and next steps
While the US requires EEO-1 reporting, it does not require organizations to disclose their pay data. However, like elsewhere in the world, there is a growing focus on pay transparency and workforce diversity. Voluntary disclosure of pay gap information can therefore be advantageous. It allows an organization to lead the conversation on pay equity and facilitate a faster change to more equitable workplaces in the US
Finally, it is important to note that many US states and even cities have passed their own laws about pay transparency and pay equity reporting. Even small organizations that fall below the EEO-1 reporting threshold may still need to comply with other local regulations. Check out our specific government mandated reports and Help Center section to find more information.
If you would like further support around EEO-1 or other reporting, please don't hesitate to reach out for assistance through the Help Center support channel or reach out to our pay equity consultants at clientservicespe@beqom.com.