• May 16, 2019

Many employers have been focused on a court battle over when the Equal Employment Opportunity Commission (EEOC) will collect employee pay data—sorted by race, sex and ethnicity—for the first time. Covered employers must submit that data later this year, but they should keep in mind that the deadline to submit other EEO-1 information is rapidly approaching.

Under federal law, businesses with at least 100 employees and some federal contractors with at least 50 employees must submit an EEO-1 form each year. Component 1 of the EEO-1 form hasn’t changed from prior years: It asks for the number of employees who work for the business sorted by 10 job categories, race/ethnicity and gender.

Employers must submit 2018 Component 1 data by May 31, unless they request an extension. But employers considering an extension should note that the EEOC recentlyshortened the extension period from 30 days to two weeks. So the extension deadline is now June 14.

Component 2 data collection—which includes reporting hours worked and pay information from employees’ W-2 forms by race, ethnicity and sex—is the subject of the legal dispute. Covered employers must submit such data for 2017 and 2018 by Sept. 30.

Selecting the Snapshot

For Component 1, data must be pulled from one pay period from October through December 2018. For Component 2, employers will need 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.

[SHRM members-only resource: EEO-1 Reporting Checklist]

The EEOC uses information about the number of women and minorities companies employ to support civil rights enforcement and analyze employment patterns, according to the agency.

In light of the upcoming Component 2 filing requirements, employers may want to consider using the last payroll period of 2018 for the Component 1 snapshot that is due May 31, said Annette Tyman, an attorney with Seyfarth Shaw in Chicago. “That may make it easier to align with the year-end pay and hours data collection that will need to be filed by Sept. 30,” she said.

“Given the pay data that will be filed later this year, it will be important to ensure that employees are classified and reported in the right job categories,” Tyman added. So employers should review the EEO-1 job categories to ensure their job titles are appropriately aligned.

“As the Component 1 filing deadline approaches, employers should upload their filing to the EEOC portal with enough time to resolve any issues that may pop up,” said Arthur Tacchino, J.D., the chief innovation officer at SyncStream Solutions, a company that provides compliance software.

Employers should also be sure to save and store their Component 1 filing, because the Component 2 filing will build on it, he said. “This will make the expanded reporting easier to complete.”

Employers should complete the EEO-1 reporting online through the EEOC’s website, where they will also find instructions and FAQs.

Ongoing Litigation

President Barack Obama’s administration revised the EEO-1 form to add the Component 2 data, but President Donald Trump’s administration suspended the pay-data provisions in 2017.

Several worker-advocacy groups challenged the Trump administration’s hold on the pay-data collection provisions, and, on March 4, Judge Tanya Chutkan of the U.S. District Court for the District of Columbia lifted the stay—meaning the federal government had to start collecting the information.

During the litigation, the EEOC’s chief data officer warned that rushing the data collection may yield poor quality data. However, the agency ultimately said it could collect pay data from 2017 and 2018 by Sept. 30, 2019. Even with the additional time, the agency said it would need to spend more than $3 million to hire a contractor to provide the appropriate procedures and systems.

Chutkan ordered the government to giver the court and plaintiffs periodic updates on the EEOC’s progress and to continue collection efforts until a certain threshold of employer responses has been received.

The federal government filed an appeal in the case on May 3, 2019, challenging Chutkan’s decision to lift the stay and her order to collect pay data by Sept. 30—but employers should still move forward as planned. The appeal doesn’t “alter EEO-1 filers’ obligations to submit Component 2 data,” the EEOC said on its website.

Unless the U.S. Court of Appeals for the District of Columbia Circuit issues a stay, employers should assume that Chutkan’s directive to have the pay data collected this year still stands, said Koray Bulut, an attorney with Goodwin in San Francisco.

Even if the appeals court does halt Chutkan’s order while the appeal is litigated, Bulut noted, “if the appellate court rules in an expeditious manner, there might still be a ruling over the summer, and employers might find that the requirement and the Sept. 30 deadline are back in effect.”

To view the original article by Lisa Nagele-Piazza, J.D., SHRM-SCP posted on May 16, 2019 click here.