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EEO-1 Component 2 Portal Closes

March 4, 2020
Continuing controversy delays the setting of a deadline for the new EEO-1 Form for 2019.

A federal judge has finally allowed the Equal Employment Opportunity Commission (EEOC) to close its online portal for employers to file their EEO-1, Component 2 compensation data for 2017 and 2018.

Although the EEOC has said it will not seek to collect the same kind of data in the future, this isn’t likely to signal the end of the saga. If we accept the old saw that what is past is prologue, then we can count on the controversy surrounding this costly administrative burden for employers will continue to wend its way through the halls of justice and the corridors of bureaucratic policymaking in the future.

The Jan. 31 deadline for employers to file their Component 2 data had been set by a federal district court judge late last year after the EEOC reported that it had not gathered the percentage of reports from employers required earlier by the same judge.

This also was the same federal district court judge who earlier found the Trump-era commission had violated the law when it attempted to withdraw the Component 2 reporting requirement originally imposed by the Obama-era EEOC. That judge’s decision has been challenged in federal appeals court, where the proceedings are still ongoing.

The EEO-1, Component 2 form required employers with 100 or more employees, as well as federal contractors and subcontractors with 50 or more workers, to collect extensive employment data organized by 12 pay bands that range in salary from about $19,000 to more than $208,000 a year, divided across 10 job categories.

This information also had to be divided by the same racial, ethnic and gender groupings that employers previously reported in earlier EEO-1 Forms that had been in use for 50 years. Although the federal Office of Management and Budget has killed the Component 2 form since the district court decision, confusion reigns over when it will approve the new EEO-1 Form (minus Component 2) that had been created anew by the EEOC.

So, while employers no longer need to worry about the detailed and burdensome Component 2 report, they still have to wait for an announcement about when they’ll be expected to file the normal annual EEO-1 report this year.

The EEOC’s authority to collect EEO-1 information expired in September 2019 pursuant to the Paperwork Reduction Act (PRA), the federal law that controls all government information collection process forms.

The PRA holds that OMB must approve all information collections at least every three years, explain attorneys David J. Goldstein and James A. Paretti, Jr. of the law firm of Littler Mendelson. The EEOC has still not submitted new forms to OMB for approval. Once the forms are submitted, there will be an additional 30-day period during which the public is allowed to submit comments.

“It appears unlikely at this point that 2019 EEO-1 reporting forms will be approved much before May at the earliest,” note Goldstein and Paretti. At that time, the agency will set forth its required schedule for filing, which they say may choose to set a reporting deadline of summer or perhaps even early fall.

Under the most recent version of the instructions and report, employers were required to base their workforce reporting on a payroll period of their own choice from the fourth quarter of the 2019 calendar year. At this point there is no reason to anticipate any change in that requirement, according to the attorneys.

While the EEOC has not sought approval to collect the Component 2 compensation data for 2019, it has indicated on its public regulatory agenda that it will continue to look at the issue, and may propose a different means of collecting and analyzing employer payment practices in the future, Goldstein and Paretti add.

“The EEOC has appealed to the U.S. Court of Appeals for the District of Columbia Circuit as to whether the lower court’s reinstatement of Component 2 was lawful in the first place,” they point out. “And of course, as administrations change, prior proposals like Component 2 may be exhumed and revisited.”

Regardless of how the appeals court finds, federal contractors don’t need to fear the Component 2 information that they had to submit will be used against them. One agency that has said it will not use the already gathered Component 2 data is the Labor Department’s Office of Federal Contract Compliance Programs (OFCCP). This office regulates federal contractors and it announced last November that it “determined that it does not find Component 2 data necessary to accomplish its mission to ensure federal contractors are not engaged in unlawful pay discrimination.

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