While none of us like being told what to do, our federal, state and local governments sure do like telling us when things are required. And when it comes to construction workforce reporting requirements, we’re just beginning to see the tip of the iceberg.
From the Federal EEO report to the California Pay Data Report to project-level local hire requirements, many of us are feeling a heavier and heavier burden to submit regular reports about our workforce compensation and composition.
So why does it matter? According to the Association of Building Contractors, in 2022 alone the construction industry needs 650,000 additional workers. Additionally, Willis Watson Towers, a global advisory firm, published their risk index in 2017, indicating that diversity is a Top 20 problem for our industry internationally through 2027. We feel this firsthand every day: we’ve never had more to build, but we can’t hire great people fast enough to meet the demand.
Many of us find these requirements annoying. In some ways, they absolutely are! But what if we didn’t just look at it as an annoying reporting requirement? What if we actually analyzed our workforce data to create better workplaces?
In this guide, we’re going to take a 30,000 foot view of the workforce reporting requirements you may encounter as a contractor. While we can’t include all the fine details here, we at Miter would love to partner with you not only to help you meet statutory workforce reporting requirements, but also to help you build a fairer, more effective organization.
Federal DEI & EEO Reporting Requirements
If you’re an employer with 100+ employees, or if you’re a federal contractor with 50+ employees, you need to file the EEO-1 Component 1 report every year.
The EEO-1 report is a breakdown of your workforce by Ethnicity, Gender, and Job Category. Generally speaking, it’s best practice to allow your employees to self-report their ethnicity and gender. You’ll need to make sure you can confidentially acquire and securely store this data on EVERY employee you pay every year - even if they only last a few days!
Right now, the federal government is not requiring you to report on income data in this report and that simplifies it a bit, but… Some states already ask you to look at pay in connection to demographics and others are considering it!
As you can imagine, keeping track of this data without technology can be cumbersome and error-prone. We highly encourage all employers to find an HCM solution - whether it’s Miter or another solution - to securely collect and store this data on an ongoing basis.
State-level DEI reporting requirements
Employers are not just subject to federal requirements; they’re also subject to state, county, and for construction contractors, project-level reporting requirements.
Consider, for example, the fine state of California. The CA CRD (California Civil Rights Department) requires employers with 100+ employees to report their workforce composition not only by ethnicity, gender, and job category, but also by pay rate and hours worked.
You may be saying, “that’s just crazy California”, but there is a reason The Economist stated in 2019 that “California… frequently creates political winds that sweep across the country.” And it is. Right before Equal Pay Day in 2021, Illinois became the second state in the nation to require workforce pay data collection in addition to ethnicity, race and gender information for all employers with 100 or more employees. With this new pay data reporting beginning in 2024, Illinois goes even farther than California or even the federal government with corporate diversity information, similar to that on the EEO-1, published publicly within 90 days of reporting.
While each state has a vastly different take on private corporate politics, many states are looking for ways to encourage companies toward a more diverse future. States like Colorado, Connecticut, Nevada and Washington, and even New York City, only ask you to include pay ranges in job postings, but this is a close first step to asking for diversity and equity reports every year! Sadly, what most construction firms will find in reviewing their reports is a clear lack of diversity in their ranks.
Project-level reporting requirements
Often, awarding bodies impose additional workforce reporting requirements on contractors beyond those required by federal and state governments. Section 3 HUD projects, for example, require contractors to submit reports proving that 30% of their workforce qualifies as Section 3 workers. Many California-funded projects come with Skilled & Trained Workforce requirements which specify the % of workers in certain trades who must have graduated from an applicable apprenticeship program.
What’s your next step? (Don’t worry - Miter can help!)
In our experience, few contractors are 100% prepared to comply with the workforce reporting requirements headed their way. This is especially true of fast-growing contractors - as you take on new types of projects, and as you hit higher and higher employee count thresholds, your workforce reporting requirements.
Miter provides simple tools to help you securely collect, store, and report workforce data, enabling you not only to comply with federal, state, and project-level reporting requirements, but also understand your workforce at a deeper level and develop a robust workforce strategy.
In order to take our industry where we haven’t been before, we’re going to have to do something we have never done before! We need to look for our next generation candidates in new places and in new ways, encourage our current employees more creatively, and support our managers to be champions for inclusion. The good news is that long term studies have consistently shown that diverse workforces demonstrate increased productivity, are better at problem-solving, and respond more creatively over time, so we don’t have a lot to lose in trying.