With “Component 1” in the rearview mirror, it’s time to prepare for part 2 which is due September 30th (and is far more complex). With many questions and confusion surrounding “Component 2” of the EEO-1 filing I decided to head to my local EEOC office in search of answers.
Unfortunately, I left the EEOC office with no further clarification than what I went in with. Instead, it became apparent that the EEO-1 filing due September 30th was going to be a bumpy ride.
Some of the confusion about the reporting is because the EEOC was put at a disadvantage with the late court ruling that upheld “Component 2”. Making matters worse, their current internal system is not equipped to receive such large amounts of data that employers are required to submit. I was told the solution they are currently implementing is the use of a third party to receive the data for “Component 2”. That live feed is expected to be available as soon as July 15.
We also discussed the need for assistance, with this being the first-time employers will be filing. As a result, they are setting up a 3rd party call center to help answer employers' questions. When I asked about future updates, I was told to “kindly keep checking the EEOC website at end of June or early July for more information.”
We then transitioned our conversation to the pieces that are clear. The law mandates, and EEOC confirms, that employers (who meet the criteria) must now submit 2018 and 2017 pay data to the EEOC by September 30, 2019 to be compliant with Component 2. The current appeal of the recent ruling will not affect the September 30 deadline.
Here is what needs to be submitted:
1. A “Workforce Snapshot”:
- Employer chooses a pay period between October 1 and December 31
2. Identify Employees by:
- Within each job category (10 defined)
- 12 defined pay bands
- Hours worked information for all employees above
3. How to determine pay band?
- Pay band is W-2 Box 1 Income
4. How to determine hours?
- FSLA non-exempt will report total number of hours worked for entire calendar year for all employees in each pay band by ethnicity/race and gender
Exempt 2 options:
- 1. Using a 40 hour per week proxy for full-time employees and a 20 hour per week proxy for part-time employees, multiplied by the number of weeks the individuals were employed during the EEO-1 reporting year
- 2. providing the actual hours worked during the EEO-1 reporting year if the employer maintains accurate records of that information.
Once employers have satisfied the above requirements, it becomes necessary to do an internal audit. It is important to immediately begin assessing the systems to both identify where the relevant data is (pay, hours, gender, race) and how to consolidate it.
Stay tuned as we continue to post updates and insights as this process unfolds.