Employers Should Prepare to Submit Their Component 2 Pay Data By September 30, 2019
On April 25, 2019, a U.S. District Court for the District of Columbia ruled that employers who are required to file EEO-1 reports must submit Component 2 pay data for calendar years 2017 and 2018 by September 30, 2019. (This generally applies to EEO-1 filers with 100 or more employees; both in the private industry and federal contractors and subcontractors.) You may recall that the OMB initially approved pay data collection, and then stayed its permission, in 2017. Advocacy groups filed suit in the D.C. Circuit court to vacate the OMB’s self-imposed stay, which the Court granted in April.
The EEOC will begin collecting employer’s pay data for 2017 and 2019 beginning in mid-July 2019. Filers should continue to use the EEOC’s online portal to report Component 1 data of the EEO-1 reports, which is due by May 31, 2019 unless the employer has received an extension.
Employers should also begin preparing to submit their Component 2 pay data. Although we may receive additional guidance from the EEOC, OMB or the Courts, we can use the plan that the EEOC had in place in January 2016 prior to the OMB’s stay as a guideline:
- Employers will be required to count and report the number of employees in each of the twelve pay bands for the ten EEO-1 job categories.
- Employers can expect to report the hours worked for part-time and partial year employment. The EEOC indicated that it would allow employers to use 40 hours per week for full-time employees who are exempt under the Fair Labor Standards Act if the employer does not maintain accurate records on hours worked for these employees. If the employer tracks the hours or its exempt employees, it will be required to use the actual hours.
- The EEOC has indicated that it would request employers to provide the number of hours that they spend complying with Component 2 obligations.
Although the EEOC has stated that the EEO-1 pay data will not be used as a basis to find discrimination, it admitted that the data will be used to “better focus its resources and investigations”, and that a finding of discrimination could come after an investigation. You should expect a visit from the EEOC or DOL if the data that you submit raises red flags.
Bottom line: Employers should audit their pay data and correct any apparent issues practices before they submit the data. You do not want to learn of an issue for the first time though an EEOC/DOL audit.