Employers subject to EEO-1 filing requirements have more work ahead of them this summer as the U.S. Equal Employment Opportunity Commission (EEOC) has reinstated collection of pay data for 2017 and 2018, with a Sept. 31, 2019 deadline.

HOW DID WE GET HERE?

The EEOC has historically collected information from employers regarding the number of employees by job category, race, ethnicity and sex (Component 1 data). Note that this new requirement does not change the requirement for covered employers to submit Component 1 data by May 31, 2019.

2016

In September 2016, the Office of Management and Budget (OMB) (under the Obama administration) approved the EEOC’s proposal to add the collection of pay data to the EEO-1 report. The data was to be collected under a new Component 2 of the report.

2017

About a year later, the OMB (under the Trump administration) stayed the implementation of Component 2. In November 2017, two non-profit organizations advocating for equal pay sued the OMB, challenging the stay in the U.S. District Court for the District of Columbia.

2019

Recently, the court reinstated the OMB’s original approval of the pay data collection. The court imposed several requirements on the EEOC, including that the agency must provide regular reports to the court and the plaintiffs, beginning on May 3, 2019, and every 21 days thereafter. Among other requirements, the reports must advise whether the EEOC is “on track to complete the data collection by Sept. 30, 2019” and describe the actions the EEOC has taken to implement the collection of Component 2 data.

In addition to collecting data for 2018, the court ordered the EEOC to collect a second year of pay data and gave the EEOC until May 3, 2018, to choose between collecting data from 2017 or 2019. On May 3, 2019, the EEOC issued an official notice that it would collect 2017 and 2018 data, which is due from employers by Sept. 31, 2019. The EEOC expects to open the Component 2 portal to employers by mid-July 2019.

On May 3, the U.S. Department of Justice filed a notice of appeal of the decision with the District Court. Despite the appeal, the EEOC stated in its notice that the filing of the appeal “does not stay the district court orders or alter EEO-1 filers’ obligations to submit Component 2 data.” In other words, employers “should begin preparing to submit Component 2 data.”

WHAT ARE WE REQUIRED TO DO NOW?

First, only employers who are subject to the EEO-1 filing requirements are required to submit the new pay data. These employers include:

1. Private employers with at least 100 employees
2. Private employers with fewer than 100 employees, if the employer is owned or affiliated with another employer, or there is centralized ownership, control or management, so that the employers together legally constitute a single enterprise, and the entire enterprise employs a total of 100 or more employees; and
3. Federal contractors with at least 50 employees and a contract with the federal government of $50,000 or more.

Covered employers must report wage information from Box 1 of employee W-2 forms and total hours worked for all employees broken down by race, ethnicity and sex within 12 proposed pay bands. Reported hours should reflect actual hours worked by non-exempt employees, an estimated 40 hours per week for full-time exempt employees and 20 hours per week for part-time exempt employees.

Although the EEOC has not released the Component 2 form, the EEOC will likely use the pay bands originally proposed in 2016, which are as follows:

While awaiting additional guidance from the EEOC and the Component 2 portal to open, employers should begin to evaluate their employee data systems to determine how to gather the required information. Employers should consult with legal counsel regarding any questions related to the collection of data or the results of the data.