The Equal Employment Opportunity Commission (EEOC) and its contractor issued long-awaited resource documents on July 1 on how to submit EEO-1 Component 2 compensation data for fiscal years 2017 and 2018. The web-based portal for submission of the Component 2 data will be active on July 15, 2019. The resource documents include a sample EEO-1 form showing how the online portal will be organized to collect the Component 2 data, instructions for submitting the Component 2 data via the Component 2 EEO-1 Online Filing System, responses to frequently asked questions, important deadlines and definitions, and other information and materials to support filing.
For over 50 years, the EEOC has required employers with more than 100 employees to report the number of their employees by sex, race/ethnicity, and job category through its Employer Information Report, more commonly known as the EEO-1. In February 2016, the EEOC published a notice in the Federal Register announcing its intention to revise the EEO-1 data collection and begin collecting pay data as well. The revised EEO-1 form requires employers to report W-2 wage information within 12 pay bands and total hours worked for all employees by sex, race/ethnicity, and job category.
The Office of Management and Budget (OMB) approved the pay data collection in September 2016. The collection of pay data was to begin in 2017 with the first pay data reports (for 2017) due in March 2018. In August 2017, however, OMB reversed course and told EEOC it had decided to initiate a review and stay of the pay data collection due to concerns that “some aspects of the revised collection of information lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.”
In November 2017, pay equity advocates initiated litigation seeking vacation of the stay and reinstatement of the pay data collection requirements. The US District Court for the District of Columbia granted this request, and Judge Tanya Chutkan ordered the EEOC to collect employer pay data by September 30, 2019. The US Department of Justice has filed a notice of appeal with the DC Circuit Court.
The EEOC and NORC at the University of Chicago, the entity with which EEOC has contracted to collect the Component 2 pay data, released resource documents on July 1 detailing the specifics of how employers must submit the data. Below are the key takeaways from the resource documents. For more detailed information, please refer to the documents themselves.
- What Must Be Filed?
Employers with 100 or more employees must report employee compensation data for fiscal years 2017 and 2018. Compensation data includes W-2 wage information and hours worked, broken out by gender, race/ethnicity, and job category. Employers must report this data for ALL full-time and part-time employees who were employed during the “workforce snapshot period,” an employer-selected pay period between October 1 and December 31 of the reporting year. The Component 2 EEO-1 Online Filing System Sample Form illustrates how the data will be collected.
- Employee Earnings Data: Employers must report W-2 Box 1 earnings for the year for all employees identified in the workforce snapshot period. Employers must tally the total number of employees who fall into specific compensation bands by job category, gender, and race/ethnicity. If an employee was employed during the workforce snapshot period, his or her W-2 Box 1 earnings must be tallied, even if he or she is no longer employed at the end of the year.
- Employee Hours Worked: Employers must report hours worked, in the aggregate, for all employees in the snapshot period, by gender and race/ethnicity. For nonexempt employees within the meaning of the Fair Labor Standards Act (FLSA), employers should report the annual sum of hours each nonexempt employee worked. For exempt employees, employers may report either (1) the actual hours worked, or (2) a proxy of 40 hours per week for a full-time exempt employee, and 20 hours per week for a part-time exempt employee, multiplied by the number of weeks the individual was employed during the EEO-1 reporting year.
- Who Needs to File?
- Employers, including federal contractors, are required to submit Component 2 compensation data for 2017 if they have 100 or more employees during the 2017 workforce snapshot period. The same employers are required to submit this data for 2018 if they have 100 or more employees during the 2018 workforce snapshot period.
- Single-establishment employers, i.e., employers doing business at only one establishment in one location, must complete a single Component 2 EEO-1 online data record.
- Multi-establishment employers, i.e., employers doing business at more than one establishment, must submit compensation data for all their establishments. These employers must submit a Consolidated Report, which includes summary pay and hours-worked data for employees in the company’s headquarters and at each establishment. They also must submit an individual report for each establishment with 50 or more employees. For establishments with fewer than 50 employees, the employer must file an establishment list or establishment report, similar to the list or report required for Component 1.
- Tips for Electronic Filing:
- The EEOC requires that Component 2 EEO-1 reports be submitted via the Component 2 EEO-1 Online Filing System, or as a CSV data file. The filing system will go live on July 15, 2019.
- Companies will receive their User ID from NORC via a notification letter mailed through the US Postal Service and an email sent to the registered EEO-1 email address on record. A password will be set up during initial entry into the system, once the employer’s User ID, FEIN, and email address have been verified.
- Once all reports have been completed for the company, the authorized official must certify that the information reported is accurate and prepared in accordance with the instructions.
- Deadlines/Key Dates:
- The portal for filing Component 2 pay data opens on July 15, 2019.
- The deadline for employers to submit and certify their 2017 and 2018 Component 2 data is September 30, 2019.
Next Steps for Employers
Employers should familiarize themselves with the resource documents posted on the NORC website and start pulling their compensation data together consistent with the guidance provided in those documents.