EEOC Proposes to Revise EEO-1 to Include Data on Annual Pay and Hours Worked

On Friday, the EEOC announced that it planned to revise the EEO-1 form to include burdensome requirements to annually collect and report pay and hours worked by all employees.  Its proposal was published in today’s Federal Register.  Currently, the EEO-1 must be filed before September 30 every year by employers with over 100 employees and contractors/subcontractors with 50 or more employees (and contracts over $50,000).   The forms identify how many employees (by gender and ethnicity) are employed in certain job classifications.  The new requirements would take effect in September 2017 and would require the employer to complete two pages (instead of just one).  One page would identify the number of employees (again by job classification, gender and ethnicity), but would also break them out by twelve identical pay bands in each job classification.   The second page is identical, except that instead of indicating the number of employees, the employer would need to research and insert the number of hours collectively worked by all of the employees in that pay band by job classification, gender and ethnicity.  The EEOC believes that it needs the number of hours to account for part-time and temporary employees.  The form is not requesting information about time in job, seniority, prior experience or education, etc. (which all obviously impact the amount paid).

The EEOC is not proposing to expand the EEO-1 reporting obligations beyond those employers currently required to file them.  The forms will also remain confidential (although by creating such a document, they will become discoverable in all agency investigations and civil litigation).

There are twelve identical pay bands for each job classification (of between $19,239 and $208,000+).  The information is to reflect annual “salaries” based on total W-2 wages earned during the prior twelve months from any work week between July 1 and September 30.  The pay bands are compressed at the low end (i.e., approximately $5,000) and wider at the top end (of over approximately $40,000).  Even though the forms explicitly specify “salary” to be reported, the EEOC actually wants total W-2 compensation and all earned income, including “wages, salaries, fees, commissions, tips, taxable fringe benefits, and elective deferrals” as well as “supplemental pay components such as overtime pay, shift differentials, and nonproduction bonuses (e.g., year-end bonuses, hiring and referral bonuses, and profit-sharing cash bonuses).”  It also wants this information when it wants it and not when employers would typically be generating this information for W-4 forms in January.  However, the EEOC does not expect this to be burdensome and encourages employers to use quarterly payroll reports.

The EEOC is also seeking feedback from employers about how to account for exempt employees for whom employers are not required to track working hours.  It is not proposing that employers be required to track those hours.  It is considering simply requiring employers to estimate 40 hours/week (or 2080/year) for exempt employees.

The EEOC reports that all but three employers nationwide already submit their EEO-1 reports electronically, and therefore, is making electronic submission of the new information mandatory for the new form in 2017 (unless the employer requests an exemption).

The EEOC hopes to analyze this data and to focus its investigations on those employers with statistically anomalous compensation practices:

Analysis of W-2 Pay Data

Statistical tests will be used as an initial check of the W-2 data to be collected on the EEO-1, specifically, statistical significance tests that do not rely on an assumption of a normal distribution. The Pilot Study recommended several statistical techniques to test within-job categories and then suggested further examining companies and establishments with low probabilities that the differences between examined groups, such as men and women, occurred by chance. The Pilot Study also noted that the issue of calibrating error rates (power vs. significance level) needed to be addressed to detect discrimination without suffering too many false positives. This process would include recognition of how sample sizes may influence results and also of judicial precedents regarding definitions of statistical probabilities.

 The EEOC and OFCCP plan to develop a software tool that will allow their investigators to conduct an initial analysis by looking at W-2 pay distribution within a single firm or establishment, and by comparing the firm's or establishment's data to aggregate industry or metropolitan-area data. This application would highlight statistics of interest.

Finally, the EEOC is seeking public comments from the private sector about these planned changes to the EEO-1 form:

1. Evaluate whether the proposed collection of information is necessary for the proper performance of the Commission's functions, including whether the information will have practical utility;

2. Improve the accuracy of the Commission's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;

3. Enhance the quality, utility, and clarity of the information to be collected; and

4. Minimize the burden of the collection of information on those who are required to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses.

 

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

President Obama Issues Executive Order Barring Large Federal Contractors from Using Certain Pre-Dispute Arbitration Agreements and Requiring Reporting of Employment and Labor Violations

This morning, President Obama signed a new Executive Order which applies only to federal contractors with contracts in excess of $500,000.   Where the value of the goods or services being procured are expected to exceed $500,000, the contractor will be required to disclose any arbitration, court or agency awards, judgments or determinations concerning violations of, for instance, the FMLA, E.O. 11246 (aka affirmative actions requirements for women and minorities), the NLRA, the FLSA, OSHA, the FMLA, the Rehabilitation Act, Title VII, the ADA, the ADEA, Vietnam Era Veterans Readjustment Act and equivalent state laws.  These contractors will be required to update this information every six months and require their subcontractors to do likewise.  The DOL has been tasked with developing regulations about defining and creating consequences for repeated and serious violations.  

In addition, where the value of goods or services being procured exceeds $1M, the contractor is prohibited from using pre-dispute arbitration agreements with employees or contractors to govern disputes arising under Title VII or concerning or “any tort related to or arising out of sexual assault or harassment.” This requirement will not apply to collective bargaining agreements, pre-existing agreements, or where the employer provides commercially available off-the-shelf items.

Finally, the Executive Order requires the provision of pay stub information to the contractors with contracts in excess of $500,000:

Paycheck Transparency.  (a)  Agencies shall ensure that, for contracts subject to section 2 of this order, provisions in solicitations and clauses in contracts shall provide that, in each pay period, contractors provide all individuals performing work under the contract for whom they are required to maintain wage records under the Fair Labor Standards Act; 40 U.S.C. chapter 31, subchapter IV (also known as the Davis-Bacon Act); 41 U.S.C. chapter 67 (also known as the Service Contract Act); or equivalent State laws, with a document with information concerning that individual's hours worked, overtime hours, pay, and any additions made to or deductions made from pay.  Agencies shall also require that contractors incorporate this same requirement into subcontracts covered by section 2 of this order.  The document provided to individuals exempt from the overtime compensation requirements of the Fair Labor Standards Act need not include a record of hours worked if the contractor informs the individuals of their overtime exempt status.  These requirements shall be deemed to be fulfilled if the contractor is complying with State or local requirements that the Secretary of Labor has determined are substantially similar to those required by this subsection.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Trucking Company Pitt-Ohio Agrees To Pay $2.43M To Settle EEOC Sex Discrimination Class Action Lawsuit

On Thursday, the EEOC’s Cleveland office announced that the interstate trucking firm, Pitt-Ohio Express, Inc., “has agreed to pay $2.43 million and provide other remedial relief to a class of women to settle” a sex discrimination class action lawsuit brought by the EEOC. The EEOC had alleged in this lawsuit “that Pitt Ohio Express Inc. denied a class of qualified female applicants employment as truck drivers or dockworkers since 1997, while men were placed in these positions during the same period. The comprehensive relief obtained by the EEOC includes $2.43 million for the class of women denied employment. Non-monetary relief includes offers of employment to women who should have been previously hired as drivers and dock workers and equal employment opportunity training to all supervisors and managers, as well as reporting and monitoring provisions.”

According to the EEOC, “[t]he consent decree settling the suit was approved by the court following a fairness hearing held [Thursday] morning. . . . Pitt-Ohio Express Inc. is a regional carrier specializing in short-haul transporting, providing direct service to over seven states in the northeastern United States. The company is headquartered in Pittsburgh and has terminals in Cleveland, Columbus, Cincinnati and Toledo.”

According to the terms of the consent decree, “neither this Decree nor the fact of a settlement are an admission or concession by Pitt Ohio of any violation of Title VII or of any liability or wrongdoing whatsoever.” Nonetheless, the consent decree contains the following terms:
• Pitt Ohio, its officers, agents, employees and all others in active concert with them are enjoined from discriminating in hiring based on sex in violation of Title VII against female applicants for driver and dockworker positions in its Ohio terminals, and from failing to create and maintain records as required by Title VII or regulations issued pursuant to Title VII.
• Pitt Ohio, it officers, agents, employees and all others in active concert with them shall not retaliate against any female applicants for driver and dockworker positions at its Ohio terminals for participating in this proceeding or otherwise asserting any rights under Title VII in this proceeding.
• The payments to Claimants are for compensatory damages. Based on the lack of any prior employment relationship between Pitt Ohio and the Claimants, the absence of any adjudication of issues raised in the Complaint and Pitt Ohio's payment to the Claim Fund according to the procedures herein as a step in resolving all claims and issues, each Claimant, to whom a payment was made will be provided by the Claim Fund, an IRS Form 1099-MISC for the year in which payment is made, as required by law, directed to the same address to which the check was sent.
• Within 60 days after the entry of this Decree, EEOC shall provide Pitt Ohio the name of each Offer Eligible Claimant who has expressed interest in employment with Pitt Ohio and whom it contends should receive "priority hiring consideration" as defined in paragraph 23, and at the same time it will provide Pitt Ohio the current qualifications information received from each such Offer Eligible Claimant. As used herein, "priority hiring consideration" refers to Pitt Ohio's obligation to make employment offers for driver and dockworker positions to Offer Eligible Claimants who meet the hiring criteria in effect for such positions at the time the offer for such position would be made. . . . Absent disagreement or once any disagreement about whether an Offer Eligible Claimant should receive "priority hiring consideration" has been resolved, such Offer Eligible Claimant entitled to "priority hiring consideration" shall be placed on a "Job Offer List" according to her stated Ohio terminal preference for employment. When a job vacancy for a driver or dockworker position becomes available at an Ohio terminal, Pitt Ohio will consult the Job Offer List for that terminal, invite as many Offer Eligible Claimants to interview as it deems appropriate and make offers of employment to Offer Eligible Claimants on the Job Offer List before considering the application of any other person. . . . Pursuant to these "priority hiring consideration" provisions, Pitt Ohio shall extend at least 40 offers of employment, 26 for driver positions and 14 for dockworker positions. If at least 30 hires do not result from the initial offers, EEOC will provide Pitt Ohio the names of additional Offer Eligible Claimants and Pitt Ohio shall in good faith make additional offers until 30 hires are achieved or until the termination of this Decree, whichever is earlier. Each Offer Eligible Claimant hired pursuant to the "priority hiring consideration" provisions will receive "rightful place instatement." "Rightful place instatement" shall mean that, when an Offer Eligible Claimant is hired into a driver or dockworker position, she shall be hired into the vacant position at the then existing hiring rate for the position with seniority rights and accompanying benefits, based on the position and her earlier date of application. Rightful place instatement shall not extend to bumping Pitt Ohio employees who occupy jobs, displacement of drivers from current route and shift assignments, or vacation preference rights.
• Pitt Ohio will appoint from its human resources department an ombudsperson to resolve informally issues arising from or which result from women entering driver and/or dockworker positions pursuant to the terms of this Decree. To the extent necessary, Pitt Ohio will issue procedures for submission and handling of issues by the ombudsperson. The ombudsperson will not be the person in the human resources department responsible for responding to EEO charges or other EEO compliance.
• Within 30 days after the date of this Decree, Pitt Ohio shall provide a training proposal to EEOC for approval. The proposal shall include: format of the training; name(s) and qualifications of the instructor(s); content and topics to be covered; length of the program; and estimated training dates and locations. The training shall include at least the following topics: Title VII recordkeeping requirements (retention requirements, prohibition against destruction of records, etc.); hiring practices and procedures which comply with Title VII; the interview process and types of questions to be asked of applicants; and personnel policies and procedures which comply with Title VII. Pitt Ohio shall conduct EEO training to be attended by its executives, managers, supervisors, human resources staff and recruiters from its corporate headquarters and Ohio terminals, and any other employees at corporate headquarters and the Ohio terminals coming in direct contact with prospective applicants or involved in the recruitment, selection and hiring process. This training shall be completed within 90 days of the date of this Decree. Pitt Ohio shall train all newly-hired and newly-promoted management or supervisory staff, and other staff involved in the application and hiring process at its corporate headquarters or Ohio terminals on equal employment opportunity law, including the topics listed in paragraphs 34, within 90 days after their hire, promotion or transfer for the duration of this Agreement. To satisfy this requirement, Pitt Ohio may substitute viewing of a video presentation of the original training session, provided a qualified trainer attends to answer questions.
• In addition to the steps of training and appointment of an ombudsperson, identified elsewhere in this Decree, Pitt Ohio will help assure management and supervisory accountability in effecting the terms of this Decree in its Ohio facilities by: (a) directing managers and supervisors to carry out their supervisory responsibilities so as to achieve compliance with Pitt Ohio's policy or policies prohibiting unlawful employment discrimination and/or retaliation; (b) taking corrective action, which may include discipline up to and including discharge of any supervisor or manager who violates Pitt Ohio's policy or policies prohibiting unlawful employment discrimination or retaliation; (c) directing managers and supervisors to report incidents of unlawful discrimination and/or retaliation to Pitt Ohio's human resources group.
• Pitt Ohio will incorporate into the performance evaluations of its supervisors and managers an equal opportunity component.
• Within 14 days after the date of this Decree, Pitt Ohio shall post the Notice attached as Exhibit C at its Ohio terminals and corporate headquarters, and keep it upon those premises in places where bulletins and notices to employees and applicants for employment customarily are posted. Such Notice shall remain for the five-year duration of this Decree. If such Notice becomes defaced, marred or otherwise unreadable, Pitt Ohio will ensure that new readable copies are posted in the same manner as heretofore specified.
• With the first reporting period starting on the first day of the month immediately after the date of this Decree, Pitt Ohio shall submit to the EEOC's Cleveland Field Office a written report for each preceding six-month period for three years and then for each preceding one-year period for the remaining term of the Agreement, regarding recruitment and hiring of women in driver and dockworker positions in Ohio, which shall include: (a) for each Ohio terminal for the reporting period, a list of driver and dockworker hires, including name, sex, date of hire, job title, rate of pay, and status as full-time or part-time employee; (b) for each Ohio terminal for the reporting period, a list of the names of driver and dockworker applicants, their sex, and for each their address, social security number (if available), job applied for, date of application and an indication of the status of the applicant (i.e., hired or disposition code information); and (c) for each Ohio terminal, copies of the applicant logs for the preceding reporting period.

Insomniacs may read the full EEOC press release at http://www.eeoc.gov/press/1-22-09.html and the full terms of the consent decree at