Money2Well, by now everyone is aware of the injunction on the December 1, 2016 FLSA overtime Final Rule. Many employers had decided (a/k/a were forced) to increase an exempt employee’s salary to $47,476 to meet the DOL’s new (and now on hold) $47,476 threshold. So, now what? Can an employer just revert the employee’s salary, or not increase it as planned? Let’s put employee morale aside too…because certainly any reversion of a salary is not going to sit well with the employee who now may feel undervalued (and/or question whether he or she is properly classified anyway).

The Fair Labor Standards Act (FLSA) doesn’t address “promised” wages; accordingly, there is no federal requirement that an employee be paid a promised wage following an intervening event. Similarly, the Minnesota Fair Labor Standards Act (MnFLSA) does not impose any requirements on “promised wages”. But, Minnesota law does provide employees some protections in certain circumstances.

In Minnesota, “wages” is defined as: “Compensation due to an employee by reason of employment”.  Minn. Stat 177.23, Subd. 4.  Further, an employer cannot “directly or indirectly and with the intent to defraud…(2) directly or indirectly demand or receive from any employee any rebate or refund from the wages owed the employee under contract of employment with the employer…” or the employer can be liable for twice the amount in dispute.  Minn. Stat. 181.03. Why do I bring up this statute? Well, a salaried employee who is told she is getting a raise may try to argue she has a contract that she is “owed” those wages for the work she performs during the time frame she was told she’d get the raise. Is this a stretch? Probably, but then again, I’ve heard more far-fetching arguments than that. Also, notice the bold – “intent to defraud” – I think it’s safe to say, no employer was attempting a bait-and-switch here; it was all regulation driven and employers had the full intent (at the time) to increase a salary just to meet the new threshold.

In any event, for the cautious employer, you may want to provide the employee notice of the decrease prior to the period in which the employee would earn that money. So, for example, if the employee was told on November 25 that she would be getting a raise to $47,476 effective December 1, and the next payroll cycle is for the workweeks of November 21 to December 4 and paid on December 9, you may want to consider reverting back during the next payroll cycle that is for the workweek of December 5 to December 18 (so long as the employee is notified prior to December 5). That being said, this approach is being cautious – certainly in this instance there would be no “intent to defraud”, however, with this delayed decrease, there is no arguable “contract” with the salaried employee for the following payroll cycle (they may argue there is a contract for the payroll cycle encompassing December 1-5).

Yes, I’m fully aware that I did not address hourly employees here. Given they are hourly, and “earn” wages on an hourly basis, I would not expect the same argument to ever even remotely pop up. Finally, don’t forget to document the payroll change, preferably with the employee signing that he or she understands the change and applicable start date of the change.

On November 14, 2016, the USCIS (U.S. Citizenship and Immigration Services) published a revised form I-9 (Employment Eligibility Verification) that must be used by all employers by January 22, 2017. The form, dated “11/14/2016” must be used after January 22, 2017. The previous form, dated 03/08/2013 must be replaced by that date.

What’s new? Instead of asking for “other names used” it asks for “other last names used”. It is easier to complete electronically with drop-down lists and on-screen instructions and an option to clear the form and start over.  It also adds prompts to ensure information is properly entered, employers may enter multiple preparers and translators, it has an area to add additional information, and has a supplemental page for the preparer/translator.

The revised form and more information can be found at USCIS’ website here.

clickAs a result of President Obama’s White House Summit on Worker Voice, on October 28, 2016, the U.S. Department of Labor’s Wage and Hour Blog announced its new beta website – This website is, according to the DOL, designed to provide “easy-to-access” solutions for employees who need answers “fast”. The DOL admits that “Even the best government websites can be difficult to navigate” – true, true. That being said, it makes it only about 4 clicks for a worker to file a claim electronically.

In short, the website, which is in beta and therefore undergoing constant changes, is designed to provide employees with an easy way to determine whether their rights are being violated, then provides them with a simple click to file a claim against an employer. Partnering with the NLRB, EEOC, and DOJ, the DOL wants the website to provide “critical information” to employees about their rights, who may not know whether they have a “FLSA” or “FMLA” problem, but an “unfairness-on-the job problem”. Employees answer a “few simple questions” and voila! The website will supposedly provide the relevant information, expanding in the weeks and months to come, and “learning” from the workers that use it about what kind of information is being sought – and the site will supposedly begin to feature that information prominently for similar workers.

The beta site provides a drop down, under which five job titles are currently available – day laborer; office worker; nail salon worker; restaurant worker; and construction worker. From there, it takes to you a “Tell Us what happened. We can help.” screen with several options such as – “You have the right to be treated equally.”, “You have the right to engage with others to improve wages and working conditions”, “You have the right to a safe and healthy work environment”, and “You have the right to be paid.”  From there, the employee can chose what happened (i.e. suggestions – all are in the negative – such as “I was not paid for work I performed”) , and then be taken to a “File a Claim” screen.

What does this mean for employers? I have to believe we will see an increase in filed complaints, as that is the whole purpose of the website – to make it easy for employees to complain about unfair work treatment – and provide a simple click to do so.

Sleep breakSeems simple enough, right? Not so fast! In Minnesota, “hours worked” is generally defined as “training time, call time, cleaning time, waiting time, or any other time when the employee must either be on the premises of the employer or involved in the performance of duties in connection with his or her employment or must remain on the premises until work is prepared or available.”  Minn. Rule 5200.0120. As always, this definition is not entirely helpful. For example, does “training time” include seminars that the employee wants to go to outside of normal work hours, or a free seminar during work hours? What about non-mandatory training opportunities? As is frequently the case – it depends, and often depends on the facts. However, a few general rules of thumb follows:

Rest & Meal Breaks 

Employees who work 4  consecutive hours must be provided time to use the nearest restroom. Rest breaks of less than 20 minutes are counted as “hours worked”. Employees who work at least 8 consecutive hours must be provided a meal break (sufficient time to eat a meal). Meal breaks are not counted as hours worked – but should “generally” be 30 minutes or more (so says the State), so the employee is “completely relieved from duty” to eat. Minor interruptions in meal time is okay, but frequent interruptions would convert this to paid work time. Thus, it is a good idea to require employees to step away from their workstation during meal times. Fun fact – there is no mandatory “smoke break” – employees have no right to a smoke break, but certainly they may chose to use their meal break or other provided rest break for such a purpose.

On-Call Time

Under Minnesota law, employees who must remain on premises or so close that they cannot use time “effectively” for personal purposes, must be paid for on-call time. Employees on-call away from work are not working, unless called to work. There is, of course, much more to this (for example, paramedics who may work 24 hour shifts are not always “working” during the 24 hours shift), but for purposes of this quick overview, that’s the general rule – whether the employee is “engaged to wait” (paid) or “waiting to be engaged” (unpaid).

Sleep Time

If an employee is scheduled for less than 24 hours per day, sleep time (with some exceptions – see below) is work time, even if you allow them to sleep. Minn. Rule 5200.0121. Employees scheduled 24 hours or more do not need to be paid for meals and a sleeping period (less than 8 hours), so long as there are adequate sleeping facilities and the employee can usually get at least 5 hours of uninterrupted sleep. However, it is critical that there is an understanding/agreement (doesn’t have to be in writing – but very good practice). Work performed during the sleep time must be compensated and if the sleep time is interrupted so the employee cannot get at least 5 hours of sleep, the entire period is work time.

On-Site Employees

Here is one of the exceptions to the above sleep time rule. Caretakers, managers and other on-site employees of residential buildings, whose principal place of residence is the residential building, and who receive the residence as full or partial compensation for duties performed, must be paid for time spent on duties, but no other time. Minn. Stat. 177.23, Subd. 10.

Companionship Service

Another exception to the above sleep time – employees who provide companionship services (29 CFR 552.6 and 552.106) to individuals unable to care for their own needs, who are employed to stay overnight in the home with the individual(s), and who are paid at least minimum wage for 4 hours for the overnight stay. For those, the term “hours” worked does not include nighttime hours of 10 pm to 9 am – for a total of 8 hours per night, during which the employee is able to perform duties, but is not in fact performing such duties and can sleep or do other things in the home.  Minn. Stat. 177.23, Sub. 11.

As always, the law is not super clear, and there is certainly case law and other guidance to support any one situation. The exceptions to the rule almost always overshadow the rule in wage and hour law. For example, there is a plethora of guidance about paramedics, EMT’s and other first responders, and of course, on-call time is particularly contentious. When in doubt, as I always say, dig deeper!

woman wage dataIn only 18 months, federal contractors and subcontractors with 100 or more employees will be forced to report wage data to the EEOC via the new EEO-1 report, in order to show that there is no discrimination in pay. While this seems a long way away, employers whose data may not be so kind to them could benefit greatly from reviewing (and fixing) the pay disparities now. The “workforce snapshot period” is between October 1 and December 31, 2017. Thus, employers needing to review their pay practices (this is code for – employers whose data would show that females or minorities are paid less than their counterparts) would be wise to do so before the relevant period (one of the payrolls in that window) in order to make adjustments prior to reporting.

Further, if an employer were to be very on the ball, any such adjustments would best be made at the next annual merit increases, or performance reviews prior to the reporting period (preferably before December 1, 2016 – read more on that below). Thus, a little pre-planning could go a long way in not drawing any red flags to those who might otherwise receive a random raise without job justification. Further, if an employer has a bucket of money come raise time, it should use that opportunity to allocate more to those positions that are underpaid and less to those overpaid to control overhead costs. Additionally, employers should familiarize themselves with the relevant pay bands. It may not take much to raise a female employee from one pay band to another, or similarly, keep an male employee at a pay band when on the bubble (I recognize this sounds horrible, but it is reality – the EEOC is looking at pay bands, not actual salary so paying a woman 1 cent more to bump her up a pay band and a male 1 cent less to keep him in a pay band will fall in the employer’s favor all things being equal).

Also, keep in mind that employers would greatly benefit from reviewing the various pay bands at the same time you are reviewing the overtime revisions and make all the changes in one fell swoop come December 1, 2016. As I’ve said before, the December 1, 2016 deadline is really the best excuse employers have to change pay practices without much mystery as to why. There is hardly an employee that doesn’t know about the amendments and is waiting for the change.

Finally, in addition to reporting pay data in 10 EEO-1 job categories, employers will need to report the hours worked that year by each pay band. Employers can find more information on the EEOC’s website here. In the end, employers may be surprised to find after an internal audit that their pay rates are misaligned (not necessarily because of anything intentional) – and so now is the best opportunity to get that corrected and on the right path.

Band Aid ClockA year after President Obama’s executive order establishing paid sick leave for federal contractors, the DOL has finally published its final rule, Establishing Paid Sick Leave for Federal Contractors, at 29 CFR Part 13. For those of you not wanting to read all 466 pages of the Final Rule, I’ll try to summarize the good stuff below. Keep in mind that this rule is applicable to covered federal contract work (more on that below). Importantly, many of the provisions are very similar to requirements in the Minneapolis and St. Paul Sick and Safe Leave ordinances, so if you are a federal contractor doing business in those cities and this new rule applies to your business, it would be wise to craft a policy that covers all the requirements.

The rule applies to new contracts after January 1, 2017 covered by the Davis-Bacon Act, Service Contract Act, and other concessions contracts and service contracts related to federal property or lands. All contracts that fall under the executive order Establishing a Minimum Wage for Contracts are also covered. The rule does not apply to work under collective bargaining agreements that provide at least 56 hours of PTO that can be used for health-related reasons until January 2, 2020 (or the date the CBA ends if sooner). Employers may use multiemployer plans to provide leave under this Final Rule. Also the rule does not apply to contracts for the manufacturing or furnishing of materials, supplies, articles, or equipment, including those subject to the Walsh-Healey Public Contracts Act. It also does not apply to employees “performing in connection with covered contracts for less than 20 percent of their work hours in a given workweek.”

  • PTO Accrual or Up Front Bucket – Employees must be able to accrue 1 hour of paid sick leave for every 30 hours worked on or in connection with a covered contract, up to 56 hours (7 days) per year (MSP and St. Paul cap at 3 days). Employees who do not need to record their time can be assumed to work 40 hours under the contract each week, or can use an estimate of hours worked (so long as reasonable and based on verifiable information). In lieu of accrual, employers may chose to provide 56 hours of PTO at the beginning of each accrual year.
  • Use of PTO – Employees must be able to use it while working on or in connection with a covered federal contract for own health needs or those of a family member, or due to being a victim of domestic violations, sexual assault or stalking (or to assist a family member who is a victim). Note, there is no waiting period.  Requests for PTO may be verbally or in writing (you can’t force them to put the request in writing, but after it is approved, you could ask that they follow the normal procedures to record that request such as through an online system). Denial of PTO for this purposes must be in writing with a reason why it is denied. Failure to find replacement worker is not a reason to deny.
  • Carryover of PTO – Employees must be able to carryover up to 56 hours from year to year while working for the same contractor on covered contracts – and get unused PTO back if return to work within a  year of leaving a job on a covered contract.
  • Recordkeeping – Employers must provide the employee with their PTO availability each pay period.
  • Payout of PTO – not required, but if an employer pays out PTO upon termination, and the employee later returns to the job, the employer does not need to restore unused leave.
  • Proof – Employers may require a doctor’s note or other documentation supporting the need for leave of 3 days or more (be sure to follow the process provided).

In any event, given the direction of city ordinances and the spread of such sick and safe leave laws, contractors should consider revising their PTO policy (hopefully you still don’t have a separate sick leave and vacation policy) to incorporate the most employee generous of all the applicable leaves to your business, so that your PTO policy will be compliant with all the laws and ordinances your business needs to function with little further administrative burden. As always, employers should be sure not to retaliate for requesting or taking such leave, or otherwise discriminate or interfere these rights. Finally, if you can’t get enough, or want more information, the DOL has a series of information on the Final Rule that can be located here.

teaAs I wrote about earlier this May, the City of Minneapolis has enacted a sick and safe leave (SSL) ordinance, effective July 1, 2017. However, just last Friday, September 23, 2016, after tireless work by the Minneapolis Regional Chamber’s Workforce Fairness Coalition, the Minneapolis City Council adopted several revisions to the ordinance that are helpful to employers doing work in Minneapolis. The City’s presentation regarding the amendments to the ordinance can be found here and the amended regulations here. Because I know you are overworked (which is why you are reading this and not the ordinance in the first place), here are the revisions in a nutshell:

  • Defines “Regular Rate of Pay” – and importantly excludes tips, commissions, expense reimbursement; premium pay, bonuses, special occasion gifts, profit sharing payments, and retirement contributions.
  • Accrual of time is in one hour increments (no fractions).
  • Employers may front load SSL by providing 48 hours or more to employees following their 90 days of employment and 80 hours of SSL each year thereafter.
  • SSL must be recorded recorded as normal payroll practices or policies but no less than monthly.
  • SSL must be compensated at same hourly rate with same benefits as was scheduled to work when used SSL.
  • No longer must track hours of employees who “occasionally” work in the City (but, there is a presumption of a violation if no records are maintained).
  • Clarified that additional PTO does not need to be given for SSL if current PTO is sufficient to meet the accrual requirements for SSL and allows the use consistent with the Ordinance.

Finally, the City is working on releasing a FAQ document in October and creating a 16 member Workplace Advisory Committee, which you can apply to be on here.

St PaulAs predicted in my earlier post, on September 7, 2016, St. Paul joined Minneapolis in unanimously approving a sick and safe leave ordinance – with a very big difference. Unlike Minneapolis, the St. Paul ordinance mandates paid leave be provided by all sizes of employers. For purposes of the St. Paul Ordinance, an “employer” is a person or entity that employs 1 or more employees – even if that person is part-time or a temporary employee. As of July 1, 2017, employees working in the city for a large employer “shall” be provided paid time off for sick leave, safe leave, and…snow days.

What Does the St. Paul Sick and Safe Time Ordinance Require?

The St. Paul Ordinance is effective July 1, 2017 for large employers (those with 24 or more employees), and January 1, 2018 for smaller employers. Similar to Minneapolis, employees working in St. Paul will accrue sick and safe time leave at the rate of 1 hour for every 30 worked, up to an annual cap of 48 hours (either calendar or fiscal year). Employees must be allowed to use sick and safe time after 90 calendar days of employment. Employers must permit an employee to carry over at least 80 hours of accrued but unused sick and safe time into the following year.

Accrued but unused sick and safe time does not need to be paid out at termination. Employees must be able to use the leave in the same increment of time consistent with current payroll practices and existing employer policies (but no more than 4 hours). They must be compensated at the same hourly rate with the same benefits (except they are not entitled to lost tips or commissions and compensation is only required for the hours the employee was scheduled to work).

Who Is An “Employer” and “Employee” Under the Ordinance?

The Ordinance defines these terms with specificity, but here it is in a nutshell:

  • An “Employer” is a non-government person/entity employing one (1) or more employees.
  • An “Employee” is any individual employed by an Employer (including temps and part-time) that performs work for the Employer within St. Paul for at least 80 hours in a year.  An Employee is not an independent contractor.
  • Family Members” are children (step, adopted, foster, adult); spouse; sibling; parent (step and in-laws); grandparents; grandchildren; guardian (ward, or member of household); registered domestic partner; and “any individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship”

Unlike Minneapolis’ ordinance, this Ordinance does not specifically allow employers operating under a collective bargaining agreement to develop alternate means of meeting the goals of the Ordinance. In fact, the St. Paul ordinance sates that, “Nothing in this chapter shall be construed as diminishing the obligation of an employer to comply with any contract, collective bargaining agreement, employment benefit plan, or other agreement providing more generous sick and safe time to an employee than required herein.”

Construction Company Opt-Out

Also like Minneapolis, construction companies may opt-out of this Ordinance if the employees are paid at least the Minnesota prevailing wage (Minn. Stat. 177.42) or the rates set forth in a registered apprenticeship agreement. Such employers shall be deemed in compliance for those employees who receive either prevailing wage rate or the apprenticeship rate – regardless of whether the employees are working on a private or public project.

What If An Employer Already Offers Paid Time Off?

Employers may certainly have more generous sick and safe time policies – but no lesser. Employers do not need to offer additional paid time off to employees if they already offer the same amount of PTO to employees that “may be used for the same purposes and under the same conditions.” In other words, the PTO policy must meet these minimum standards of accrual, use, recordkeeping, notices, etc.

Further, the Ordinance does not prohibit employers from having policies allowing donation of this paid leave to other employees – so an employee may accrue the time but not “use” it, instead “donating” it to another (seems to me that this goes against the whole purpose of the ordinance for the benefit of that employee). Employers may also advance sick and safe leave to an employee prior to accrual.

What Can Accrued Sick and Safe Time Be Used For?

Like Minneapolis, after 90 calendar days of employment, an employee may use sick and safe time for:

  • Mental or physical illness, injury, or health condition (theirs or family members).
  • Medical diagnosis, care, or treatment of a mental or physical illness, injury or health condition (theirs or family member).
  • Preventative medical or heath care (theirs or family member).
  • Absence due to domestic abuse, sexual assault, or stalking (so long as the absence is to seek related medical attention, victim services, counseling, relocation or legal action).
  • Closure of the employer’s business by a public official due to public health emergency or an infectious or hazardous situation.
  • Accommodation of need to care for child whose school or daycare has been closed by a public official due to public health or emergency situation.
  • Accommodation for need to care for family member whose school or place of care has been closed due to inclement weather, loss of power, loss of heating, loss of water, or other unexpected closure.

Unlike Minneapolis, the St. Paul ordinance does not carve out that a health care provider may only use sick and safe time when the provider has been scheduled to work (this does not include when the provider calls in and requests a shift within 24 hours or for on-call shifts – unless asked to remain on the premises during the on-call shifts).

What Can Employers Require of Employees?

The St. Paul ordinance requires an employee to do far less to obtain this new benefit.  Whereas a Minneapolis employer may require an employee to provide up to 7 days’ advance notice of foreseeable leave (such as doctor appointments) if the employee intends to use sick and safe time leave and notice of the need to use such leave “as soon as practicable” when it is unforeseeable (such as domestic violence), St. Paul only states that:

Earned sick and safe time shall be provided upon the request of an employee.”

Like Minneapolis, St. Paul employers may require “reasonable” documentation that the leave is covered for absences of 3 or more days. For all leave, “when possible, the request shall include the expected duration of the absence.” Further, “An employer may require an employee to comply with the employer’s usual and customary notice and procedural requirements for absences or for requesting leave, provided that such requirements do not interfere with the purposes for which the leave is needed.” In other words… “sick and safe time shall be provided upon the request of an employee”.

Notices Required at Workplace, Employee Handbook & Upon Request

Employers must post a notice that addresses the following: “Employees are entitled to earned sick and safe time; the amount of earned sick and safe time and the terms of its use guaranteed under this chapter; that retaliation against employees who request or use earned sick and safe time is prohibited; and that each employee has the right to file a complaint or bring a civil action if earned sick and safe time as required by this section is denied by the employer or the employee is retaliated against for requesting or taking earned sick and safe time.” The St. Paul Department of Human Rights and Equal Economic Opportunity (HREEO) will be creating a model notice for employers to use, which must be displayed in a “conspicuous and accessible place”.

Further, if you have an employee handbook – which I strongly advocate every employer should – the notice must be included in the handbook. Also, upon request, the employee must be provided their then-current hours of sick and safe leave he or she has earned, and how much has been used. This may be provided on a pay stub or other online system for employees to access their own information.

Recordkeeping, Confidentiality & No Retaliation

Employers must keep records of hours worked and sick and safe time taken for 3 years. HREEO may have access to the records to monitor compliance, as well as the employee. Similar to Minneapolis, if an employee is transferred to a location outside of St. Paul by the same employer, and the employer doesn’t have sick and safe leave outside the city, the employer has to keep the employee’s accrued time on the books for 3 years. If that employee returns to work in the city within 3 years, the employee is entitled to all previously accrued time not used. Thus, employers that have employees perform work in Minneapolis and St. Paul should consider providing this leave outside of the city so that there is only one bucket of paid leave for all work, wherever performed.

Further, if an employee is terminated but thereafter returns to the same employer within ninety (90) days, his or her sick and safe leave must be reinstated and the employee may use it at the commencement of reemployment (no 90 day wait). In the case of mergers and acquisitions of businesses where the employees remain, the employees accrued time remains intact (no 90 day wait).

Not surprising, any health or medical information collected as a result of the employee’s use of sick and safe time must be treated as confidential.  As with any laws providing employee rights, retaliation for any employee actions under this Ordinance must be prohibited.

What Happens If An Employer Violates the Ordinance?

Any person may report a suspected violation. The HREEO Director may decide to investigate and/or pursue a violation. Note, the “relief and administrative fines” are different than Minneapolis (and the procedure a little less clear at this point):

  • Reinstatement and back pay.
  • For the first violation – payment to the employee of the time unlawfully withheld x2 or $250, whichever is greater, as liquidated damages.
  • For a second violation against the same employee – an additional  fine payable to the City of St. Paul, up to $1,000.
  • For a third violation against the same employee – ad additional penalty of up to $1,000 to the employee, or an amount equal to 10% of the total amount of unpaid wages, whichever is greater.
  • Administrative penalty of up to $1,000 payable to the employee for each violation.
  • Administrative fine of up to $1,000.

An employee, former employee or employer may appeal any violation of this Ordinance within 21 days from the determination. Following the appeal process, the violation determination becomes final. If an employer does not comply the City of St. Paul may initiate a civil action in Court against the employer and, upon prevailing, “shall be entitled to such legal or equitable relief as may be appropriate to remedy the violation.” Further, an employee does have a private right of action to sue the employer directly in district court if retaliated against for exercising rights under the Ordinance.

What’s Next?

The HREEO has to create the notice for employers.  It’s expected that the HREEO will also adopt guidelines and regulations for its implementation. As to the bigger picture, as predicted in my blog about Minneapolis’ ordinance, I suspect Duluth will be next as on July 18, 2016, the Duluth City Council approved a resolution establishing an earned sick and safe time taskforce.

minwage_posterWith the August 1, 2016 increase in Minnesota’s minimum wage, employers should be sure to replace your Minnesota minimum wage poster – which is a required posting. You can download it for free here.  If you have one of those 21-in-1 or whatever posters, you can certainly just tape this on top of the old – no need to buy a completely new poster. However…there are two more to go.

On the Federal front, the FLSA minimum wage poster has also changed effective August 1 (and thus must be posted) – that poster can be downloaded for free here. Finally, the Employee Polygraph Protection Act poster must be updated – that can be found here.

Dollars 2As I wrote about in April, on February 1, 2016, the EEOC proposed revisions to add wage and hour information to employers’ yearly EEO-1 report.  The EEO-1 report is required by the EEOC, pursuant to its authority in Title VII of the Civil Rights Act of 1964 (Title VII), and requests submission of information aimed at detecting discriminatory practices.

The proposed revision is the recommendation of a 2010 Equal Pay Task Force between the EEOC, DOL and President Obama’s National Equal Pay Task Force. The EEO-1 survey is used by the EEOC and the OFCCP (Office of Federal Contract Compliance Programs) to analyze and enforce non-discriminatory employment (such as a contractor who hires no minorities). According to the EEOC, this information will enable it to compute and compare pay between men/women and various races and ethnicity to find potential discriminatory pay practices.

Following the closing of the April 1 comment period, the EEOC has since revised its proposal, as summarized below.  The comment period for the new revisions closes August 15, 2016.

Who Needs To Complete An EEO-1 Report?

The EE0-1 survey must be filled out by all employers subject to Title VII with 100 or more employees (this includes corporate enterprises and/or shared ownership) and federal contractors / first-tier subcontractors subject to Executive Order 11246 (government contract over $10,000) with 50 or more employees and a prime contract or first-tier subcontract of $50,000 or more. Employers with 50-99 employees would not need to report this new additional pay and hours worked data (now called “Component 2” of the EEO-1) , just the current information such as race, gender, etc. (“Component 1”).

The proposal would change effective the 2017 reporting cycle for employers with 100 or more employees – they would need to add the pay and related information by March 31, 2018. Note- this is a 6 month extension from September 2017 (which was originally proposed). Thereafter, the EEO-1 report will be due by March 31st of each subsequent year.  Keep in mind, however, the September 30, 2016 deadline and EEO-1 reporting is unchanged!  According, employers would report September 30, 2016 with the old form, and the next report would be due March 31, 2018, with the new data/form.  A sample of the proposed new EEO-1 report can be found here.

What New Data Must Be Reported?

The proposal would require covered employers to provide data on employees’ W-2 earnings and hours worked based on a calendar year basis ending December 31.  This is a significant (positive) change over the EEOC’s first proposal. Employers would use the W-2 Box 1 income figure used for end-of-year tax reporting.  Thereafter, employers will need to aggregate W-2 data in 12 “pay bands” (pay range, for the rest of us) for 10 different job categories: Executive/Senior Level Officials and Managers; First/Mid-Level Officials and Managers; Professionals; Technicians; Sales Workers; Administrative Support Workers; Craft Workers; Operatives; Laborers and Helpers; and Service Workers).

As for how to report the “hours worked” component for full-time salaried employees, the EEOC now is recommending that for non-exempt employees, actual hours be reported.  For exempt (salaried) employees, an employer would have the option of: (1) reporting actual hours worked; or (2) report 40 hours per week for full-time employees and 20 hours per week for part-time employees multiplied by the number of weeks the individual is employed during the EEO-1 reporting year.

In short, we hurry up and wait again…