Employers subject to filing EEO-1 should now prepare for the new Component 2 reporting requirement. As reported in our March 17, 2019 article we were waiting for further direction by the court which has now been decided.
After being stayed in 2017, Component 2 of the EEO-1 Report has been reinstated by the U.S. District Court for the District of Columbia. On May 3, 2019, the Equal Employment Opportunity Commission (EEOC) announced that employers must report pay data, broken down by race, sex and ethnicity, from 2017 and 2018 payrolls. The pay data reports are due Sept. 30.
Component 2 data
The revised EEO-1 form 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 12 proposed pay bands. The reported hours worked should show actual hours worked by nonexempt employees, an estimated 20 hours per week for part-time exempt employees and 40 hours per week for full-time exempt employees.
This reporting requirement will create an additional burden for employers especially when data could be in different locations or systems. Collecting pay information involves more data points than the race, ethnicity, and sex required under Component 1 reporting.
Who is required to report?
Businesses with at least 100 employees and federal contractors with at least 50 employees and a contract of $50,000 or more with the federal government must file the EEO-1 form. Employers are still required to submit the EEO-1 Component 1 report no later than May 31, 2019.
Preparation
The Component 2 requirement is more complex than it may seem. Employers should not underestimate the time it will take to prepare the submission. This is particularly true now that employers must submit two years of pay data.
The EEOC expects to begin collecting EEO-1 Component 2 data for calendar years 2017 and 2018 in mid-July 2019. They will notify filers of the precise date the survey will open as soon as it is available.