Resource: Local reporting requirements in the US
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. It 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 Indian or Alaska Native tribes
- Tax-exempt private membership clubs (other than labor organizations)
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.
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. These are:
- 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)
PayAnalytics makes it simple for users to generate their EEO-1 reports, including every report type they need. The reporting feature offers easy-to-use filters that make sure the right data gets into each report.
To start, users need to provide a few pieces of data, including:
- Gender and race/ethnicity (based on self identification if possible)
- Jobs (Note that the EEOC requires the use of 10 specific job categories. If the existing data uses a different classification, PayAnalytics makes it simple to map the data to the appropriate EEOC category before exporting.)
What happens 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 poor audit outcome can reflect negatively on the organization. It could also bring about more consequences such as additional audits or a discrimination case.
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.
Further support in PayAnalytics
PayAnalytics not only helps with the EEO-1 report, but it provides a holistic solution for improving pay equity and workplace equity.
- Federal contractors face special requirements from the Office of Federal Contract Compliance Programs (OFCCP). PayAnalytics helps with many of these requirements. For instance, it can generate reports on the demographic distribution of pay analysis groupings. It can also compare datasets to understand the development in hiring, promotion and termination.
- Workplace equity: This feature gives an overview of the diversity of an organization’s workforce composition and how it is changing. This tool helps organizations ensure that their diversity efforts are moving in the right direction.
- Pay equity: Drill-down capabilities let users examine specific groups of employees to understand the pay structure. Pay equity analyses both measure the adjusted pay gaps and provide suggestions for closing them. Compensation suggestions help make sure that hiring or promotion decisions do not have a negative impact on pay equity.
- Pay transparency: Users can create pay bands based on current employees or define their own. The platform allows for easy identification of employees that fall outside their pay band and can suggest raises for those that fall below the expected minimum.
For more information about how PayAnalytics can help your organization meet the reporting requirements in the US, please contact us and/or request a demo.
Please note that while this local resource information has been compiled by PayAnalytics’ legal and pay equity experts, it does not constitute legal advice.