May 02, 2019

EEO-1 update: employers required to submit Component 2 pay data by Sept. 30

Employers with 100 or more employees must annually file an Employer Information Report EEO-1 with the Equal Employment Opportunity Commission (EEOC). In the report, employers detail the race/ethnic and gender composition of their workforce by specific job categories.
Late in the Obama administration, the EEOC expanded the reporting in the EEO-1 report to include not only demographics (Component 1) but also compensation and hours worked by gender, race and ethnicity (Component 2). In Component 1, employers report the number of their employees by job category, race, sex and ethnicity. In Component 2, employers are to disclose hours worked and pay information culled from their employees’ W-2 forms by race, ethnicity and gender.

Under the Trump Administration, in August 2017, the Office of Management and Budget (OMB) stayed the EEO-1 Component 2 filing requirements which had been set for March 31, 2018. Shortly after, the OMB decision was challenged by employee advocates in the United States District Court for the District of Columbia. In March 2019, the National Women’s Law Ctr. v. OMB1 case, (DDC), a district court judge vacated OMB’s decision and reinstated the Component 2 reporting requirements.

In a filing with the federal court, the EEOC proposed requiring employers to submit their 2018 Component 2 EEO-1 pay and hours data by Sept. 30, 2019, which the federal judge approved. Component 1 EEO-1 demographic data still is due on May 31, 2019. Employers will then have just four months to collect and submit their Component 2 reports for 2018.

Remaining question is whether employers need to submit 2017 Component 2 data

The EEOC has until May 3, 2019, to notify the court if it will seek the collection of 2017 data by Sept. 30, 2019 or, instead, collect the 2019 Component 2 data in the 2020 reporting period. It is required to publish its decision on its webpage. Further, there is the possibility that the Department of Justice will appeal the federal court’s decision.

The EEOC’s stated goal in collecting the Component 2 data is to reduce pay gaps based on gender, race and ethnicity but it has not indicated how it will analyze the data. Employer groups have raised serious concerns about the EEOC’s need for the data and its ability to maintain the confidentiality of this and has cited grave concerns that this reporting will simply encourage litigation.

For information about employer’s reporting obligations, contact a Chuhak & Tecson Employment law attorney.

This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.

Client alert authored by: Jeralyn H. Baran, Principal

1 National Women’s Law Ctr. V. OMB, No. 17-2458