Employers who are required to report EEO-1 data for their employees (private employers with at least 100 employees and certain federal contractors) must now include information about pay and hours worked along with employee counts by sex, race and ethnicity.
On April 25, 2019, the federal district court in the District of Columbia ruled that September 30, 2019 is the deadline for the Equal Employment Opportunity Commission (EEOC) to collect two years of EEO-1 Component 2 pay and hours worked data for the calendar year 2018 and the EEOC’s choice of either calendar year 2017 or 2019.
On May 2, 2019, the EEOC announced that covered employers should prepare to submit Component 2 W-2 Box 1 earnings and hours worked data for 2017 and 2019 for their employees. More specifically, in addition to reporting employees’ Component 1 demographics data regarding race, ethnicity and sex in each of 10 job categories, which is still required by May 31, 2019 (unless extended upon request to June 14, 2019), those employees will also need to be sorted within 12 pay bands in terms of earnings and hours worked by September 30, 2019, to comply with the expanded EEO-1 reporting obligations.
The pay and hours data mandate arose in 2016 in an effort to eradicate pay disparities and discrimination in the U.S. workforce but was placed on hold due to an ongoing legal battle. Although the final technical specifications and details for reporting are not yet available, some early guidance may be found on the Federal Office of Management and Budget’s (OMB) website and in the EEOC’s supporting statement regarding the mandate.
It is possible the September deadline could be pushed back due to further legal challenges; however, employers should be prepared to comply by September 30th by reviewing their systems, ensuring availability of the data and discussing their reporting obligations with existing payroll vendors. Notably, the EEOC has indicated it will use the new data when assessing allegations of pay discrimination and in conjunction with its investigations. Therefore, employers should take this opportunity to also review internal pay practices to evaluate and correct any pay disparities that may exist.
The EEOC expects to open its online collection portal by mid-July 2019 to enable employers to submit Component 2 data. The EEOC’s website should be monitored for further announcements, guidance and training regarding employers’ compliance obligations.
Compass suggests organizations review their compensation strategy as part of preparing to meet the EEO-1 data requirements. Please contact Compass by e-mailing firstname.lastname@example.org if you would like more information about a workplace assessment and pay practice review.
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