Business owners who must submit an annual EEO-1 report to the Equal Employment Opportunity Commission (EEOC) may have put this time-consuming obligation out of their mind until next spring. That’s understandable. After all, the EEO-1 report – required for all companies with 100 or more full or part-time employees and all federal contractors with 50 or more employees – was to be submitted by the end of May. But the EEOC has an unpleasant surprise for you, and one you need to address by the end of September.
Starting this year, employers need to provide the EEOC with additional information about their workforce on top of the demographic-focused job category, gender, race, and ethnicity reporting they have traditionally submitted.
That demographic information, now known as “Component 1” data, was due on May 31, 2019. By September 30, 2019, covered employers must now also supply wage and hour data for all employees broken down into 12 pay bands and by the same racial, ethnic, gender, and job category groups used for Component 1 information. Employers need to submit this “Category 2” data not only for 2018 but for 2017 as well.
Why This Additional Burden?
The EEOC proposed adding wage and hour information to the EEO-1 during the Obama administration. The Office of Management and Budget (OMB) disagreed with the new proposal and stayed the requirement, but the stay was overturned in litigation which remains pending on appeal. The court in that case ordered the EEOC to proceed with their collection of Category 2 data starting this year, and since the appeal won’t likely be resolved until 2020, it is game on for employers and their wage and hour reporting obligations.
What Employers Need to Do RIGHT NOW
With a deadline just a couple of weeks away, employers need to immediately assemble the required Category 2 information such that they can submit it by the end of September. You can find detailed information and FAQs as well as a sample form on the EEOC website, but the following steps can facilitate timely reporting:
- Choose a “workforce snapshot period” for reporting, which can be any pay period between October 1 and December 31 of both 2017 and 2018 and does not need to be the same period as that used for Category 1 data. Employers must only provide compensation data for those full- and part-time employees on the employer’s payroll during the workforce snapshot period.
- For applicable employees, assign each one to one of the 10 EEOC-provided job categories.
- Using the information found in Box 1 of each employee’s W-2, identify the number of employees who fall into each of the EEOC’s 12 compensation bands.
- For those workers employed during the workforce snapshot period, calculate the total number of hours and weeks worked during the reporting period based on employee race/ethnicity and gender in each compensation band.
Employers can submit their Component 2 data online using the EEOC’s “Component 2 EEO-1 Online Filing System. Failure to provide required EEO-1 information can have significant consequences for employers, particularly in the event of employment discrimination claims and enforcement/audit actions by the EEOC or the Office of Federal Contract Compliance Programs (for federal government contractors.
EEO-1 Questions or Concerns? Speak With a Michigan Employment Law Attorney Today
If you have questions or concerns about these new requirements or need assistance meeting your company’s EEO-1 obligations, the employment attorneys at Kreis Enderle can help. To arrange for a consultation, please contact Tom Cedoz at mailto:TCedoz@kehb.com or (269) 324-3000.