As a reminder, EEO-1 filers must submit pay data (also known as Component 2 data) for calendar year 2017, in addition to data for calendar year 2018, by September 30, 2019. See below for background on how we got here.
And in an interesting turn of events last week, the Equal Employment Opportunity Commission (EEOC) announced that in the future it will not require employers to produce EEO-1 Component 2 data. Essentially, the EEOC felt the burden imposed on employers to gather the data outweighs the usefulness of the data for the agency.
Bottom Line for Employers
Nothing has changed for this year’s submission. EEO-1 filers are still required to submit 2017 and 2018 Component 2 pay data by September 30, 2019. Specifically, employers must submit employees' hours worked and pay information from their W-2 forms by job category, race, ethnicity, and sex.
Background on Pay Data Reporting Requirements
EEO-1 filers must submit pay data (also known as Component 2 data) for calendar year 2017, in addition to data for calendar year 2018, by September 30, 2019.
On July 2, 2019, the EEOC updated the Component 2 website to assist EEO-1 filers. Specifically, the EEOC and its contractor (NORC at the University of Chicago) included Frequently Asked Questions (FAQs), a sample form, an instruction booklet, a fact sheet, a sample initial Component 2 notification letter sent to employers, and reference documents.
Below are several highlights from the materials:
- Employers, including federal contractors, are required to submit Component 2 compensation data for 2017 if they have 100 or more employees during the 2017 workforce snapshot period.
- Employers, including federal contractors, are required to submit Component 2 compensation data for 2018 if they have 100 or more employees during the 2018 workforce snapshot period.
- The workforce snapshot period remains an employer-selected pay period between October 1 and December 31 of the reporting year and covers full- and part-time employees.
- Covered employers do not need to choose the same “workforce snapshot period” for Component 2 data that they chose for demographic data (also known as Component 1 data) EEO-1 reporting for 2017 and 2018. Therefore, there is no requirement that the “workforce snapshot periods” match for 2017 Component 1 and 2 or 2018 Component 1 and 2. However, we see significant benefit for employers to use the same snapshot data.
- Federal contractors with 50-99 employees are not required to report Component 2 compensation data.
- To identify the compensation band in order to count employees, employers are to use “Box 1 – Wages, tips, other compensation” of Internal Revenue Service (IRS) Form W–2 as the measure of pay for Component 2. Employers then tally the total number of employees who fall into each compensation band by job category. If there is no employee in a compensation band, employers should leave the cell blank.
- The Component 2 form has not changed since its original release in 2016.
- For FLSA-exempt employees, employers have the option to either:
- report actual hours worked by the exempt employees if the employer already maintains accurate records of this information; or
- report a proxy of 40 hours per week for full-time exempt employees and 20 hours per week for part-time exempt employees, multiplied by the number of weeks the employees were employed during the EEO-1 reporting year.
The EEOC opened a web-based portal for the collection of 2017 and 2018 Component 2 data. The URL for the portal is: https://eeoccomp2.norc.org.
In addition to the data collection portal available for all filers, a data file upload function and validation process is available as an alternative data collection method for employers who prefer to utilize data file upload capability. Information regarding the data file upload function is also available at https://eeoccomp2.norc.org.
MRA is here to help! Our 24/7 HR Hotline Advisors can answer your questions at 866-HR-HOTLINE (866.474.6854), or email InfoNow@mranet.org.
Source: EEOC.gov, Michael Hyatt, Director, HR Government Affairs, MRA – The Management Association