Employers should review EEO-1 guidance before Pay Data reporting deadline September 30, 2019

Equal employment opportunity

The Equal Employment Opportunity Commission (EEOC) released a sample form, instructions, and FAQs to help employers submit employee pay data. The data is to be sorted by job category, race, ethnicity, and sex. This information is due to the agency by September 30, 2019.

Earlier this year, employers were required to submit EEO-1 Component 1 data that lists employees by job category, race, ethnicity, and sex. Component 2 asks for employees’ hours worked and pay information from their W‑2 forms, broken down into the same categories.

In 2017, the federal government decided not to gather Component 2 data, and worker advocates sued to force the EEOC to collect it. After a heated legal battle, the EEOC announced that employers must report Component 2 data from the 2017 and 2018 payrolls by September 30, 2019.

The EEOC’s website now provides information employers may need for filing Component 2 data, such as a sample form, an instruction booklet and FAQs for covered employers. The agency confirmed that the Component 2 online filing system would be available July 15, and additional instructions will come soon. The agency will also send login information to covered employers through the U.S. Postal Service and by e‑mail.

Collecting the Data

According to the agency, the EEOC uses information about the number of women and minority workers companies employ to support civil rights enforcement and analyze employment patterns.

Businesses with at least 100employees and federal contractors with at least 50 employees who also have a contract with the federal government of $50,000 or more, must file Component 1 of the EEO-1 form. However, only employers with at least 100 employees, including federal contractors, must file Component 2.

Under Component 2, employers must report wage information from Box 1 of the W‑2 forms and total hours worked for all employees, categorized by race, ethnicity, and sex, within 12 proposed pay ranges.

“Employers may not use gross annual earnings instead of W-2 Box 1 earnings,” noted Kiosha Dickey, an attorney with Ogletree Deakins in Columbia, S.C., and Jay Patton, an attorney with Ogletree Deakins in Birmingham, Alabama.

The report should show actual hours worked by nonexempt employees, part-time exempt employees with an estimated 20 hours worked per week, and full-time exempt employees with 40 hours worked per week.

As with Component 1 data, employers should select a pay period between October 1 and December 31 of the reporting year as the “workforce snapshot period” for Component 2 data, the agency guidance said. “The only employees whose compensation and hours-worked data must be reported are those full- and part-time employees who were on the employer’s payroll during the workforce snapshot period,” Dickey and Patton explained.

Compliance Tips

“Employers should start preparing for expanded EEO-1 reporting now,” said Arthur Tacchino, J.D., chief innovation officer at SyncStream Solutions, which provides workplace compliance solutions.

They should also identify where employee pay and hour data are stored, and begin gathering that information or figuring out how to extract it, he said.

Once all data is collected, employers should then tackle the task of filling out the actual form.

Employers will report data through the Component 2 EEO-1 online filing system or by creating a data file and inputting their data in the appropriate fields by following the data file specifications. Please note that the data file specifications have not been released yet.

Please reach out to your assigned HRBP at DecisionHR to provide the payroll data at 1-888-828-5511 ext. 4173.