On April 3, 2019, the Equal Employment Opportunity Commission (“EEOC”) announced in a court filing that it will require employers to file a second component to their Employer Information Report (“EEO-1 form”). Component 1 (workforce demographics by job category, race, ethnicity and gender) was already required with the EEO-1 form and will remain due on May 31, 2019. The new requirements of Component 2 will include pay and hour data with a deadline of September 30, 2019.
Component 2 was adopted in 2016 by the EEOC and required employers to supply W-2 income data for the number of employees in each of ten different detailed job categories. Employers would then take that data and categorize their employees’ compensation into 12 different annual pay amounts organized into bands, ranging from about $19,000 to more than $208,000. Due to the complex nature of these requirements, in 2017 the White House Office of Management Budget “stayed” Component 2 requirements until its cost burdens could be reevaluated and new requirements developed.
On March 4, 2019, Judge Tanya S. Chutkan of the U.S. District Court for the District of Columbia vacated the “stay” – resurrecting Component 2 requirements and forcing the EEOC to determine how it would proceed with collecting the data. The EEOC responded that it would extend the deadline for the Component 2 EEO-1 filings until September 30, 2019, and that in the meantime it would establish a portal where the information could be filed.
These EEO-1 forms must be filed with the EEOC by all private employers with 100 or more employees (and government contractors and first-tier subcontractors with 50 or more employees and a federal contract, subcontract or purchase order amounting to $50,000).
Because this decision is subject to challenge and appeal, it is not yet clear whether Component 2 and its September deadline will remain intact. While employers wait for answers, they should begin to plan how they will retrieve relevant Component 2 pay data. Providing such data will require employers to report wage information from Box 1 of the W-2 form and total hours worked for all employees by race, ethnicity and sex within the 12 proposed pay bands. Employers must be aware that Component 1 of the EEO-1 form regarding employee demographics remains due on May 31, 2019. Only Component 2 of the EEO-1 form regarding pay and hour data currently has an extension until September 30, 2019.
The attorneys in the Labor and Employment Group of Bose McKinney & Evans are available to answer your questions and provide guidance regarding the impact of these decisions.