• EEO-1 COMPONENT 2 REPORTING

    EEO-1 COMPONENT 2 REPORTING

EEO-1 Component 2 Reporting

Background

In September 2016, the Equal Employment Opportunity Commission (EEOC) announced enhanced EEO-1 reporting requirements.  These additional reporting rules required that all employers who were subject to completing the EEO-1 form would now also report on employees’ W-2 wage data and hours worked. However, partly because of an outcry among businesses, these increased reporting requirements were suspended. 

Recognizing and fighting discrimination in the workplace has been the main goal of the EEOC since its inception over 50 years ago, and the EEOC implemented these expanded requirements in order to help find and distinguish pay disparity between genders and races or ethnicities. However, businesses complained that the new requirements would needlessly burden them, doing little to enhance the interests of pay equality.

Initially, when the new mandate was announced, many predicted that the new reporting requirements were either going to be delayed or suspended. On August 29, that prediction came true when the EEOC announced the suspension of these expanded EEO-1 reporting requirements.

The new reporting requirements were delayed so the Office of Information and Regulatory Affairs could "conduct a review of the rules and their potential effectiveness".  This led to a law suit filed by the National Women's Law Center, which wound it's way through the legal process.

On March 4, 2019 the U.S. District Court for the District of Columbia in that case found the government did not have proper justification to stay the implementation of the EEOC’s expanded Obama-era reporting requirements, which included workforce pay data and hours worked data. Because of this, the court vacated the 2017 stay and ordered the previous approval of the revised EEO-1 form shall be in effect. 

On April 25, 2019 the judge in Washington, D.C. ruled that employers were required to submit Component 2 data (i.e. employee wages and hours) for the 2017 and 2018 calendar years by September 30, 2019.  After this deadline the EEOC did file notice to the court that moving forward they would only seek to require employers to report Component 1 data for the upcoming year.  

What next?

While the EEOC has not sought approval to collect Component 2 data for 2019, the agency has indicated on its regulatory agenda that it will continue to look at the issue.  It is possible that this data will be collected by a different method in the future.  Remember that  a Presidential election is just around the corner and an administration change may flip the tide on this type of reporting situation.   Either way, this issue does not appear to be going anywhere in the near future and most believe that some form or variation of this expanded reporting will continue at some point in the near future.  SyncStream will continue to monitor and update employers as the situation evolves.