Introduction

For US employers with 100 or more employees, extensive new information relating to their prior Equal Employment Opportunity (EEO)-1 filings must be submitted by 30 September 2019. Specifically, in addition to categorising employees by race/ethnicity, gender and job type, employers must now assemble and submit, with respect to each subcategory, aggregated employee data regarding compensation and annualised hours worked. Assembling the required data may be much more complicated than many employers are expecting, so it is important to begin planning now.

What is the EEO-1?

For many years, the US Equal Employment Opportunity Commission (EEOC) has required employers with more than 100 employees to complete and file an EEO-1 form annually. In essence, the EEO-1 was a relatively simple demographic snapshot of an employer's workforce, capturing the number of employees in each of several job categories by gender and race/ethnicity. The Office of Federal Contract Compliance Programmes (OFCCP) has also long required the EEO-1 for federal government contractors with at least 50 employees.

What's different?

Late in the Obama administration, the EEOC and the OFCCP issued rules requiring employers to start providing additional information regarding compensation groupings and hours worked for each of the existing job, gender and race categories. However, before these rules were fully implemented, the Trump administration's Office of Management and Budget (OMB) halted the rules, asserting that the revisions were overly burdensome and created privacy concerns. In turn, private organisations challenged the OMB action. In March 2019 a federal court ordered the EEOC to move forward with collecting the new compensation and hours data (collectively referred to as 'Component 2' data). Following further court hearings, the EEOC established 30 September 2019 as the new submissions deadline for the data.

Who needs to worry about this?

Only employers with 100 or more employees need to submit the new Component 2 data. Most federal contractors with 50 to 99 employees must still submit the Component 1 data annually but need not submit the Component 2 data.

The 100-employee benchmark is not based on a particular establishment, but on the employer's workforce as a whole. All full-time and part-time employees must be counted for purposes of determining whether the employer meets the 100-employee threshold. The 100-employee benchmark is determined by the number of employees as of 2017 and 2018, not the current number of employees.

What new data must be submitted by 30 September?

Each covered employer must submit Component 2 data for both 2017 and 2018. There are two aspects of the new Component 2 data:

  • compensation levels; and
  • aggregate hours worked.

First, employers must take the data from Component 1 (the number of employees, broken down by job category, race and gender) and further sort the employees into the 12 different salary bands (ranging from "$19,239 and under" to "$208,000 and over"). An employee's salary band is determined by the compensation reported in Box 1 of the employee's W-2 form for the relevant calendar year. Notably, if an employee has an annualised salary of $100,000, but begins employment on 1 October of the relevant year, the Box 1 data will put the employee in the salary band that includes $25,000, rather than the salary band that includes $100,000.

Second, employers must report the aggregate number of hours worked per job category. For example, if in the first section an employer reports a total of nine administrative support workers who identify as white (not Hispanic or Latino) and who are further identified as female, the employer will next calculate the total number of hours worked by those nine employees in the applicable calendar year. For Fair Labour Standards Act (FLSA)-non-exempt employees, actual hours should be used; for FLSA-exempt employees, proxy hours (ie, 40 hours per week for full time and 20 hours per week for part time) may be used instead.

Similar to the Component 1 EEO-1 requirements, employers will select one 'snapshot' pay period between 1 October and 31 December to determine which employees will be included in the Component 2 data.

How do we submit information?

Component 2 reporting is conducted via an electronic, online application. The EEOC requires that EEO-1 reports be submitted via the Component 2 EEO-1 Online Filing System, or as an electronically transmitted data file. Employers that wish to submit this data manually may now do so via the online form through the EEO-1 Survey Portal. Larger employers that wish to upload the data via a specifically formatted CSV file may do so beginning in mid-August. Most employers should have already received login information by mail from the EEOC.

Will submitted data be available to competitors or the public?

The data will not be directly accessible to the public. However, it is possible for Component 2 data to be released in response to a Freedom of Information Act (FOIA) request. The EEOC has taken the position that, unless a lawsuit has been filed on an investigated charge, it will withhold EEO-1 data based on FOIA exemptions for information prohibited from disclosure by federal law and for confidential trade secrets, commercial or financial information.

For further information on this topic please contact R. Daniel Beale or Sarah E.W. Trevino at Dentons by telephone (+1 404 527 4000) or email (dan.beale@dentons.com or sarah.trevino@dentons.com). The Dentons website can be accessed at www.dentons.com.

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