EEO-1 penalties will hit you hard. Here’s how to avoid them.
While compliance isn’t fun, it’s definitely better than the alternative. No matter how little you enjoy the data collection, record keeping, and form filing required for compliance, you probably enjoy paying fines even less.
Which is why you should be paying special attention to the Equal Employment Opportunity Commission’s (EEOC) EEO-1 reporting requirement. It’s due to cause particular confusion this year, because of shifted deadlines and the rolling out, then rolling back of certain components.
And unfortunately, there are no do-overs. If you screw up, the government could be at your door, and you’ll have to pay. To make sure you’re doing all you can to avoid penalties, here are some tips for dealing with EEO-1 compliance.
Good data collection can account for the bulk of the work when it comes to compliance. The more employee data you collect over time, the less scrambling you have to do when it comes time to file. While this is true for most forms of compliance, its importance cannot be stressed enough.
For EEO-1, this data has an added twist, as the gender and race information required to file the forms should be self-reported by employees. This can get complicated, and many employers simply opt to use old data from I-9 forms employees must fill out when they’re hired.
However, it’s possible that an employee’s self-identification may have changed since then. Transgender employees may identify as a different gender than they did when first hired, and the rising popularity of genetic testing may mean that employees come to realize they are a different race than what they initially reported on I-9 forms.
Because of this, it’s important to do your best to collect up-to-date information, either via paper records or electronic ones. No matter which method you choose, you should keep these on file and have proof that they were read and filled out by the employee. These records should be kept for three to five years after you file your EEO-1 form, so that you have a clear paper trail to show you did the correct data collection work when it came to EEO-1 compliance.
The changing EEO-1 standards have added to confusion and the potential for penalties this year. 2017 was supposed to be the first year that EEO-1 took wages into account, and because of this, the deadline was moved to March 31, 2018, rather than the usual September deadline.
The change in deadline has remained, but the wage requirement has been rolled back until the EEOC can decide if this will really help their cause. Because of this, many employers remain confused about what exactly is required of them for compliance.
This year, the form will be the same as years past. If you submit the new one with employee wage data, it won’t be accepted by the EEOC. The new form can still be found on the internet, so it’s important to make sure you pick the correct form to fill out and send for approval. Make sure to get the form from the official EEOC website or a trusted partner, rather than just an internet search. If the form asks for aggregate W-2 pay and hours-worked data, you’re using the wrong version.
Preventing future penalties
Despite the rollback of these regulations, it’s expected that they will go into place for the 2019 submission of EEO-1 forms. Although you won’t be penalized this year for failing to keep track of which pay band employees’ wages fall within, it’s never too early to start looking toward future ways to avoid penalties.
Good, clean data and punctual submission are the best ways to prevent penalties. Make sure your data this year is accurate, and begin fresh next year by getting a head start on any data you may need.
The EEOC takes penalties very seriously, with some companies paying millions in fines. If you don’t want that to be you, take care with your compliance, and make sure you’re up-to-date on your data, the regulation, and your submission timeline.