By September 30, 2019, employers with 100 or more employees are required to submit pay data for 2017 and 2018 to the Equal Employment Opportunity Commission. This submission is known as the Component 2 EEO-1 survey, and covered employers should have received both an email notification and a letter providing their UserID which is needed to access the online filing system for the EEO-1.
Under the Obama administration, the EEOC proposed a series of revisions to Form EEO-1 to include the collection of pay data along with the demographic data that the Form already included. After the United States Office of Management and Budget stayed the requirement to collect the pay data, a legal challenge ensued.
Earlier this year, a federal court ruled that the stay was improper and accordingly, that the revised EEO-1 data must go into effect in 2019 and the EEOC must collect the pay data. Although the court ordered the EEOC to collect 2018 pay data by the September 30, 2019 deadline, the EEOC went further and is requiring covered employers to submit pay data from both 2017 and 2018 by the deadline. Although the Office of Management and Budget has appealed the court’s decision, the appellate briefing schedule will not be complete until October 9, 2019, which is after the deadline to submit the required pay data.
Component 1 EEO-1, which requests demographic data regarding ethnicity, race and gender information regarding a covered employer’s workforce, still must be submitted. Component 2 EEO-2 seeks information regarding pay and hours worked, broken down into 12 pay bands across job categories, from a low of less than $19,239 and a high of $208,000 and over.
Employers can use any pay period between October 1 and December 31, known as the Snapshot Period, to determine if they employ the required number of employees. Only those employees on the payroll during the Snapshot Period are required to be reported. Accordingly, if an employer’s workforce fluctuates around the minimum number of employees (100), the employer may be able to use a Snapshot Period which falls below the required minimum.
Employers with payroll, timekeeping or other outside vendors should determine whether those vendors can assist with collecting the required data, as some of the required data may already be in the possession of those vendors. Employers should also identify which of their systems house the relevant demographic, pay and hours-worked data, how that data is stored, in order to streamline the collection and reporting processes.
The EEOC opened an electronic portal on July 15, 2019, for employers to begin submitting their 2017 and 2018 pay data. That portal is known as the Component 2 EEO-1 Online Filing System home page. Of course, there are additional legal considerations surrounding the collection of race, ethnicity and gender information. Employers with questions about whether or not they are required to submit Component 2 EEO-1, or how to collect and analyze the required data, are encouraged to consult the EEOC’s Frequently Asked Questions and instructions, or consult with legal counsel.