The Modern Workplace

Pursuant to an April 25 court order, employers with annual EEO-1 reporting requirements will now have until September 30, 2019 to provide the new Component 2 pay data.

As we discussed in our recent update, the Equal Employment Opportunity Commission (EEOC) requires employers with at least 100 employees and federal contractors with 50 or more employees and contracts of $50,000 or more to file annual EEO-1 reports. The EEO-1 report collects, through its Component 1 requirements, the demographic makeup of the employers workforce by race, gender, ethnicity, and job category. In February 2016, the EEOC published a federal notice announcing its intention to revise the EEO-1 form to collect pay demographics through a Component 2 requirement. The Office of Management and Budget (OMB) approved the pay data collection in September 2016, and data collection was set to begin in 2017 and be reported to the EEOC in March 2018.

However, in August of 2017, under the Trump administration, the OMB stayed the EEO-1 pay data requirements due to the burdens on employers and privacy implications. Pay equity advocates filed suit against the OMB in November 2017, asking for the EEO-1 pay data collection process to move forward. The U.S. District Court for the District of Columbia granted the requested relief in early March 2019, vacating OMBs stay and reinstating the EEO-1 pay data collection requirements. 

On April 25, 2019, the District Court determined that the deadline for employers to report Component 2 data is September 30, 2019. In court filings, the EEOC had stated that it was not equipped to collect the data, but that it could complete the data collection by the September date using the services of a third-party vendor.  

The court also ordered the EEOC to collect a second year of pay data. The EEOC has until May 3 to decide whether it will collect employers 2017 data or collect 2019 data in the future. In addition, the EEOC must put a statement on its website informing employers of the 2018 collection requirement by April 29.

Covered employers should begin the process of collecting 2018 Component 2 pay data (which includes data on hours worked and pay information from employees W-2 forms by race, ethnicity, and sex) to ensure they can produce the 2018 pay data by the September 30 reporting deadline. Employers will need to determine what systems house the relevant information and how they can pull that together for production. In some circumstances, outside vendors may be able to assist with meeting the reporting requirement.

Covered employers should also keep an eye out for the EEOCs May 3 decision as to whether employers will need to report 2017 pay data or 2019 pay data. In addition, covered employers should keep in mind that they still must submit the 2018 Component 1 data of the EEO-1 report (e.g., employee data by job category, race, sex, and ethnicity) by May 31, 2019.