In light of a recent decision by the U.S. District Court for the District of Columbia, certain employers will be required for the first time to submit detailed data on employee compensation and hours worked (or Component-2 data) to the Equal Employment Opportunity Commission as part of their annual EEO-1 form submission by Sept. 30, 2019. The court had initially ordered the collection of Component-2 data for calendar year 2018 on April 25. On May 2, in order to comply with the court’s order to collect two years of pay data, the EEOC announced that EEO–1 form filers should also begin preparing to submit data for calendar year 2017.
The EEOC expects to begin collecting Component-2 data for calendar years 2017 and 2018 beginning in mid-July 2019 and will notify filers of the precise date the survey will open as soon as it is available. Covered employers should be aware that Component-1 data is still due by May 31, 2019.
On May 3, the U.S. Department of Justice appealed the court’s recent decision ordering the EEOC to begin collecting Component-2 pay data. If the Justice Department appeal succeeds, the district court’s order, as well as the EEOC’s requirement, could be overturned prior to Sept. 30.
For more information on what employers can expect next regarding the EEOC’s collection of Component-2 data, see ABC General Counsel Littler Mendelson’s update.
In general, private employers with 100 employees or more that are subject to Title VII of the U.S. Civil Rights Act of 1964 are required to file Form EEO-1 (including both traditional Component-1 data, which reports workforce demographics by job category, race, ethnicity and gender, and now the new Component-2 data). Federal contractors that are otherwise required to file Form EEO-1 will only be required to file Component-2 data if they have 100 or more employees (covered federal contractors with 50-99 employees are required to file Component-1 only). Component-2 includes annual W-2 (box 1) compensation sorted by pay band and annual hours worked.
ABC has been active in efforts to reverse the court’s decision or, at minimum, extend the time period for employers to comply with any new Component-2 pay data requirement. The EEOC posted a notice on its website clarifying that the appeal does not stay the district court orders or alter EEO-1 filers’ obligations to submit Component 2 data, and EEO-1 filers should begin preparing to submit Component 2 data as described above, but it remains unclear what the final outcome will be.
The submission of Component-2 data was initiated during the Obama administration. However, under the Trump administration, OMB blocked the EEOC from requiring employers to submit any compensation data. In March 2019, the D.C. District Court ordered the OMB stay to be vacated.
ABC will continue to monitor developments and will report to members in Newsline.
This article is intended for informational purposes only and does not constitute legal advice or opinion.