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How to Navigate EEO-1, Component 2

Filing period opens and the commission offers advice to employers.

On July 15 the Equal Employment Opportunity Commission (EEOC) opened its website portal for employers to file their EEO-1 Component 2 wage and hour data, which is due no later than Sept. 30.

The commission also offered advice on how to fill out the form, which requires the collection of extensive employment data. The 12 pay bands range from about $19,000 to more than $208,000 a year across 10 job categories, and then by the same racial, ethnic and sex groupings that were previously used when submitting demographic data in earlier EEO-1 forms.

Employers also are required to submit a report for employee pay data applicable to 2017 by the same Sept. 30 deadline set for when the final installment of the 2018 data is due. Both sets of the Component 2 data must include aggregated data for both 2017 and 2018 regarding the pay and hours worked.

Employers must draw this data from one single payroll period of their choosing found to have occurred between Oct. 1 and Dec. 31 of each reporting year. These employers, including federal contractors, are required to submit Component 2 if they have 100 or more employees during both of these workforce snapshot periods.

The deadlines had been approved by the same federal district court judge whose earlier ruling had overturned an attempt by the Trump-era commission to simplify the EEO-1 Form. That change would have removed the enlarged reporting requirements that had been adopted by the Obama-era EEOC and which employers now must meet by Sept. 30.

Although the Trump Department of Justice is appealing the court’s ruling striking down the data simplification, legal observers were surprised the appeal was not accompanied by a request for a temporary injunction that would have blocked the gathering of Component 2 data while the appeal was being heard.

Because of the sheer size and complexity of the Component 2 data, the commission had to hire an outside contractor—the University of Chicago’s National Opinion Research Center (NORC)—to organize and process the data gathered from employers, and told the judge that it would be impossible to process the newly-required demographic and pay information any sooner than Sept. 30.

The issue of confidentiality of employer and employee data remains a concern, notes Jeffrey S. Piell, an attorney with the law firm of Quarles & Brady. “EEOC suggests that Freedom of Information Act exemptions protecting privileged and confidential trade secrets and commercial or financial information may protect an employer’s Component 2 reports from disclosure. However, the EEOC’s website warns that ‘all Internet‑based communication is subject to the remote likelihood of tampering from an outside source.’”

How You Do It

Here is how it is supposed to work: Employers must report W-2 Box 1 earnings for the year for all employees identified in the workforce snapshot period. This must include a tally of the total number of employees who fall into specific compensation bands by job category, gender, race and ethnicity. If an employee was employed during the workforce snapshot period, his or her W-2 Box 1 earnings must be tallied, even if they are no longer employed at the end of the same year.

Employers must report hours worked, in the aggregate, for all employees in the snapshot period, by gender, race and ethnicity. For nonexempt employees within the meaning of the Fair Labor Standards Act (FLSA), employers should report the annual sum of hours each nonexempt employee worked.

For exempt employees, employers may report either the actual hours worked, or a proxy of 40 hours per week for a full-time exempt employee, and 20 hours per week for a part-time exempt employee, multiplied by the number of weeks the individual was employed during the EEO-1 reporting year.

EEOC requires that employers submit reports via the Component 2 EEO-1 Online Filing System, or as a CSV data file. Companies will receive their User ID from NORC via a notification letter mailed through the U.S. Postal Service and an e-mail sent to the registered EEO-1 e-mail address on record.

A password will be set up during initial entry into the system, after the employer’s User ID, Federal Employer Identification Number (FEIN), and e-mail address have been verified. Once all reports have been completed for the company, the authorized official must certify that the information reported is accurate and prepared in accordance with the instructions.

A couple of things to keep in mind: Employers will be unable to access their 2017 and 2018 Component 1 reports in the Component 2 EEO-1 online filing system. In addition, data from previously filed 2017 and 2018 EEO-1 reports will not be in the new online application for the reporting of Component 2 data. There will be no pre-population of historical data in the Component 2 EEO-1 online filing system.

Now that the Component 2 website is operational, employers should get a jump on gathering the needed data, according to attorneys Sharon Perley Masling and Christen Leah Casale of the law firm of Morgan Lewis & Bockius LLP.

“Employers should familiarize themselves with the resource documents posted on the NORC website and start pulling their compensation data together consistent with the guidance provided in those documents,” they recommend.

EEOC is directing employers with questions to contact the help desk at NORC at the University of Chicago. NORC can be contacted toll‑free at 877-324‑6214 or by email at [email protected]. Additional information and advice is available from the EEOC at: https://eeoccomp2.norc.org/info  The commission also is offering the answers to employers’ frequently asked questions at: https://eeoccomp2.norc.org/faq.

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