If you are a business owner with more than 100 employees, you’re likely already familiar with the Employer Information Report (EEO-1). For anyone who is not already familiar, the EEO-1 Report is a “compliance survey mandated by federal statute and regulations… [which] requires company employment data to be categorized by race/ethniticy, gender, and job category.”[1]

Even if you are familiar with EEO-1, you may not have been aware that an updated EEO-1 report is in the process of being implemented. This new report is being referred to as “Component 2.”

What is Component 2?

“Component 2” is a new reporting requirement, which applies to employers who are already required to submit the EEO-1 report. Component 2 generally requires EEO-1 filers to collect and report aggregate W-2 data on earnings and hours worked by employees. The updated reporting requirements will allow the EEOC to “identify ways to improve enforcement of federal laws prohibiting pay discrimination.”[2]

History of Component 2

The updated reporting requirements under Component 2 were actually supposed to go into effect in 2017, but were halted when the White House Office of Management and Budget (OMB) issued a stay and launched a review of the effectiveness of collecting this information, citing the Paperwork Reduction Act of 1995.

The National Women’s Law Center then filed suit against the OMB claiming that it was injured by the loss of information that Component 2 would have provided. In the March 4, 2019 decision, the judge agreed, finding that the OMB’s stay of the EEOC’s pay data collection violated its own regulations and was, therefore, illegal. The collection of Component 2 data was then re-instated.

What are employers required to report under Component 2?

Component 2 will require employers to collect employees’ total W-2 earnings and total hours worked, aggregated in 12 pay bands for the 10 EEO-1 job categories. Below are the pay bands as provided in the proposed rule.

Pay bands Pay bands label
1 $19,239 and under.
2 $19,240-$24,439.
3 $24,440-$30,679.
4 $30,680-$38,999.
5 $39,000-$49,919.
6 $49,920-$62,919.
7 $62,920-$80,079.
8 $80,080-$101,919.
9 $101,920-$128,959.
10 $128,960-$163,799.
11 $163,800-$207,999.
12 $208,000 and over.

 

Next Steps

The portal for Component 2 is expected to be open in mid-July and the deadline for reporting Component 2 is currently Sep 30, 2019. This first reporting period will require employers to submit data for calendar years 2017 and 2018. Employers should begin reviewing where this data is currently being housed and devising a plan to collect and maintain this data for this and future reports.

Contact Equinox if you have questions about your legal responsibilities as an employer, including your reporting responsibilities under EEO-1 Component 1 or 2.

 

[1] U.S. Equal Employment Opportunity Commission (EEOC), EEO-1 Frequently Asked Questions, https://www.eeoc.gov/employers/eeo1survey/faq.cfm#About (June 28, 2019).

[2][2] Nat’l Women’s Law Ctr. v. Office of Mgmt. & Budget (D. D.C., 2019), https://www.crowell.com/files/20190304-National-Womens-Law-Center-v-OMB.pdf.

 

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