Employers with 100 or more employees, and federal contractors who have 50 or more workers and contracts worth $50,000 or more, have until May 31, 2019 to provide the Equal Employment Opportunity Commission (“EEOC”) data regarding the number of employees they have by job category, race, ethnicity, and gender for the 2018 calendar year (“Component 1 data”). Employers must submit this data to the EEOC by completing the online EEO-1 survey form. The EEOC provides instructions and Frequently Asked Questions to help guide first-time filers through the online submission process.
Pursuant to an April 25, 2019 Order issued by Judge Tanya S. Chutkan of the United States District Court for the District of Columbia, the same employers must now also tell the EEOC how much they paid each of those workers (“Component 2 data”) during the 2018 calendar year by September 30, 2019. According to the EEOC’s website, Employers must provide this information by completing and submitting an EEO-1 Component 2 survey form that the EEOC will make available online. The EEOC will issue a notice once the new survey form becomes available. They anticipate it will open in mid-July, 2019.
This new reporting requirement for pay data sorted by race, ethnicity, and gender stems from the reinstatement of an Obama administration’s proposed pay data collection requirement. The reporting requirements were installed to identify and narrow systematic pay gaps based on race, gender, and ethnicity. As you may recall from our previous post, the effective date of the new requirement had previously been delayed by the Trump administration’s White House Office of Management and Budget (“OMB”), pending a review of the appropriateness of the revisions. The OMB was concerned that aspects of the data collection were not practical, unduly burdensome, and raised issues of privacy and confidentiality. Critics also claimed the reporting requirements will be expensive for employers to comply with and that the collected data won’t be able to effectuate change in closing any wage gaps.
Despite these concerns, the OMB’s arguments failed when challenged before the Washington, D.C. District Court. The Court reinstated the pay data reporting requirements, set a deadline of September 30, 2019 for compliance, and also ordered the EEOC to collect additional data from either 2017 or 2019, whichever it prefers. If the EEOC selects 2017, then the 2017 pay data will also be due by September 30, 2019, along with the 2018 data. If the EEOC selects 2019, then the pay data for the 2019 calendar year will be due in the Spring of 2020. The Court has ordered the EEOC to select and notify employers of which additional year will be required by May 3, 2019.
So what does all of this mean for employers?
- If you have over 100 employees (or are a federal contractor with more than 50 employees and $50,000 in contracts), you are required to submit Component 1 data for 2018 to the EEOC by May 31, 2019. Component 1 asks for the number of employees you have by job category, race, ethnicity, and gender. You are to provide this information to the EEOC by using their online EEO-1 Survey Application, which is available now.
- If you have over 100 employees (or are a federal contractor with more than 50 employees and $50,000 in contracts), you are required to submit Component 2 data for 2018 to the EEOC by September 30, 2019. Component 2 asks for hours worked and pay information from employees’ W-2 forms by race, ethnicity, and gender. This information will also be submitted to the EEOC by using an online survey form that will become available sometime in July, 2019.
At this point in time, it is not clear what the consequences of failing to submit this pay data will be and, to the extent there are any, if the consequences will have teeth. However, this reporting requirement is not likely to go away anytime soon so employers should make sure they are keeping track of this data in a manner that can be easily transferred into the EEO-1 survey form for annual reporting.
Since these EEO-1 reporting requirements apply to many of our clients, we will issue additional alerts as deadlines approach, as the new pay data survey becomes available, and to the extent the EEOC issues further guidance and instructions for employees.
If you have any questions about EEO-1 reporting requirements and if they apply to you, please contact us. Stites & Harbison assists clients of all sizes, including publicly traded corporations, privately held companies, small businesses, and non-profit organizations alike. It is our business to help your business navigate the ever-changing field of labor and employment laws.