Employers, including federal contractors and subcontractors, with 100 or more employees have until September 30, 2019 to cull together and submit their pay and hours data from both 2017 and 2018 to the United States Equal Employment Opportunity Commission (EEOC). On April 25, 2019, a federal judge in Washington D.C. ruled that employers are required to submit their pay/hours data as Component 2 of the EEO-1 form in order to reflect how much the employer paid employees of different ethnicities, races, and sexes to supplement the EEOC’s compilation of employers’ demographic data.
This decision follows the United States District Court for the District of Columbia’s prior ruling in March 2019 in National Women’s Law Center, et al., v. Office of Management and Budget, et al., Civil Action No. 17-cv-2458 (D.D.C.) to restore the Obama administration’s efforts to eliminate race- and gender- based pay gaps by implementing the EEOC’s data collection. In 2017, the Trump administration rolled back the pay data requirement due to the burden that the pay data paperwork placed on employers.
The requirement and deadline to submit the pay data were previously uncertain, but the EEOC proposed the September deadline when it appeared the District Court was going to reinstate employers’ pay data reporting obligation. Despite the fact that the EEOC stated it was not equipped to collect the data, the EEOC decided it could meet the September deadline if aided by a third-party vendor.
What does this mean for employers?
Employers must now comply with the EEO-1 reporting requirements, which consist of two components: a demographic survey and a “snapshot” of employee pay data. Employers should be familiar with Component 1, which is not affected by the District Court’s ruling. Employers are required to submit their 2018 EEO-1 Component 1 demographic data by May 31, 2019.
Employers are now also required to file their EEO-1 Component 2 data for calendar years 2017 and 2018 by September 30, 2019. Although the process is fairly straightforward, it could be a time-intensive task for employers who have not yet begun to gather their pay data. Employers will be required to report the total-year W-2 wages (Box 1) and total-year hours worked for the employees reported in the Component 1 data filed for 2017 and 2018.
It is unknown what the EEOC will do with all of the Component 2 data employers submit. As a precaution, employers should review all pay data prior to filing it to the EEOC. Should employers become aware of any discrepancies, employers should speak with managers and supervisors to account for any inconsistencies.