Employers should be prepared to submit expansive pay data for calendar years 2017 and 2018 no later than September 30, 2019, to the Equal Employment Opportunity Commission (EEOC). The EEOC reinstated the revised EEO-1 form to include Component 2, which requires covered employers to submit compensation data and hours worked by job category, pay band, race, ethnicity and gender. With the September 30, 2019 deadline fast approaching, employers should start gathering the required pay data and consider consulting with outside counsel to determine whether the employer’s compensation data poses any risk to the organization. The following provides guidance to assist employers with complying with the EEO-1 Component 2 reporting requirements.
Employers are likely familiar with the pay data reporting requirements of the traditional EEO-1 Component 1, which requires reporting of the number of employees categorized by job, race, ethnicity, and sex. The deadline for employers to report Component 1 data with the EEOC was May 31, 2019, but employers were able to request a two-week extension prior to this deadline. If employers still needed an extension beyond June 14, 2019, they had to summarize the issue causing delay and coordinate with the EEO-1 Employer Data Team at the EEOC to obtain a longer extension.
Component 2 vastly expands the data collection of the EEO-1 and requires covered employers to report wage and hour information for all full-time and part-time employees during a payroll period between October and December, a snapshot period, for the reporting year. This information includes the employees’ wage information identified on Box 1 of their respective W2 forms and total hours worked for all employees categorized by race, ethnicity, and sex—same as the Component 1 categories—within twelve (12) distinct pay bands.
Nonexempt employees’ hours will be calculated based upon their recorded hours under the FLSA, whereas exempt employees’ hours worked will be calculated by multiplying the number of weeks worked in the reporting year times forty (40) for full-time employees, and times twenty (20) for part-time employees. Alternatively, employers can elect to provide the actual hours of FLSA exempt employees if the employer maintains accurate records of this information.
Job Categories EEO-1 (Component 1 and Component 2)
Compensation Pay Bands EEO-1 (Component 2)
Currently, all private employers subject to Title VII of the Civil Rights Act, as amended, with (i) one-hundred (100) or more employees or (ii) fewer than one-hundred (100) employees but owned by or affiliated with another company in which the enterprise employs one-hundred (100) or more employees, are required to file the full EEO-1 report (both Component 1 and Component 2 data). Additionally, all federal government contractors with one-hundred (100) or more employees are required to file a full EEO-1 report. However, federal government contractors with fifty (50) to ninety-nine (99) employees and contracts of $50,000 or more are not required to file the Component 2 data and need only submit an EEO-1 report containing Component 1.
EEO-1 Reporting Requirements for Single and Multi-Establishment Companies
Single-establishment companies—those that do business at only one physical address—are required to only submit one EEO-1 report. However, multi-establishment companies that do business at multiple physical addresses must submit: (i) a report covering the principal or headquarters office; (ii) a separate report for each establishment of the company with fifty (50) or more employees; and (iii) a consolidated report containing all employees by race, sex, and job category in all established locations and a list of the name, address, total employment, and major activity of each establishment with fewer than fifty (50) employees.
Preparing to Submit EEO-1 Component 2 Data
Employers should be collecting all of the necessary data to submit Component 2 by the currently imposed deadline of September 30, 2019. Now is the time for employers to audit their workforce—with counsel, ensuring the results are privileged—and determine the potential impact of this statistical data submitted to the EEOC.
The EEOC’s EEO-1 Component 2 Data form and online portal for submission can be found here.
For more information on how this could impact your business, contact: