In case you haven't already heard, on July 1, 2019, the Equal Employment Opportunity Commission (“EEOC”) released guidelines and set a deadline for covered employers to submit EEO-1, Component 2 (pay and hours worked data) reports for calendar years 2017 and 2018. Covered employers must submit Component 2 information online by September 30, 2019.

This is the first time that the EEOC will be gathering this type of employment information, and it may later use this data to raise claims of discrimination based on gender or race/ethnicity. Covered Employers are highly encouraged to collect the data and speak with counsel prior to reporting the data to the EEOC.

What Employers Are Impacted

The Component 2 filing requirements apply to all private employers who are required by law to submit annual EEO-1 reports, including:

• All private employers who are:

1. subject to Title VII of the Civil Rights Act of 1964, as amended, with 100 or more employees EXCLUDING State and local governments, public primary and secondary school systems, institutions of higher education, American Indian or Alaska Native tribes and tax-exempt private membership clubs other than labor organizations; OR
2. subject to Title VII with fewer than 100 employees if the company is owned or affiliated with another company, or there is centralized ownership, control or management (such as central control of personnel policies and labor relations) so that the group legally constitutes a single enterprise, and the entire enterprise employs a total of 100 or more employees;

AND

• All federal contractors who:

1. are not exempt as provided for by 41 CFR 60-1.5;
2. have 100 or more employees;
3. are prime contractors or first-tier subcontractors; and

have a contract, subcontract, or purchase order amounting to $50,000 or more; or serve as depositories of Government funds in any amount; or are financial institutions which are issuing and paying agents for U.S. Savings Bonds and or savings notes.

What Must Be Reported

Covered employers must report hours worked and pay data for their full and part time employees, except those specifically excluded by the EEOC, who were employed during a sample payroll period selected by the employer in 2017 and 2018. The selected sample payroll periods must be between October 1, 2017, and December 31 2017, for calendar year 2017 reporting, and between October 1, 2018, and December 31, 2018, for calendar year 2018 reporting. Both data sets are due by September 30, 2019.

Absent special authorization, Component 2 reports must be electronically filed. On July 15, 2019, the EEOC announced that its Web-based portal for collection of Component 2 pay and hours worked data was open to accept filings.

To meet the September 30 deadline, covered employers must assign full and part time employees to one of the twelve pay bands and one of the categories designated by the EEOC, and report W-2 Box 1 earnings for all employees identified in the workforce snapshot. Covered employers must account for the total hours worked by the employees in the snapshot pay period submitted. For employees exempt under the FLSA whose time is not recorded, covered employers may report a proxy of 40 hours per week for full time employees and 20 hours per week for a part time employees.

The 10 EEO-1 job categories are:

• Executive/Senior Level Officials and Managers
• First/Mid-Level Officials and Managers
• Professionals
• Technicians
• Sales Workers
• Administrative Support Workers
• Craft Workers
• Operatives
• Laborers and Helpers
• Service Workers

These are the same 10 job categories covered employers have been using to report their Component 1 data.

The compensation bands are:

1. $19,239 and under
2. $19,240 - $24,439
3. $24,440 - $30,679
4. $30,680 - $38,999
5. $39,000 - $49,919
6. $49,920 - $62,919
7. $62,920 - $80,079
8. $80,080 - $101,919
9. $101,920 - $128,959
10. $128,960 - $163,799
11. $163,800 - $207,999
12. $208,000 and over

After tallying the total number of employees in each compensation band by job category, covered employers must then enter this data in the appropriate columns of the EEO-1 report based on the gender and ethnicity or race of the employees.

In Summary, If You Are A Covered Employer, This Is How You Comply

1. Choose a workforce snapshot from a single payroll period from October 1 to December 31 for 2017 and 2018.
2. Assign each employee to one of the 10 job categories.
3. Gather W-2 pay data and hours worked data for employees that worked during the workforce snapshot.
4. Determine how many employees based on race/ethnicity and gender fall into one of the 12 compensation bands.
5. Review data collected with counsel and report the data online using the EEOC’s online portal.

Additional information regarding the new guidelines is available on the EEOC’s website at https://www.eeoc.gov/employers/eeo1survey/index.cfm