Compliance FYI: EEO-1 Component 2 Deadline Approaching

EEO-1 Component 2 Data due September 30, 2019

The Equal Employment Opportunity Commission (EEOC) requires certain employers to submit employee compensation.  This is done on an annual basis on an EEO-1 form.  This reporting requirement applies to employers who meet the following criteria:

  1. Private employers with 100 or more employees, or
  2. Private employers with less than 100 employees but are part of a single enterprise with a total of 100 or more employees, or
  3. Private employers with federal contracts and 50 or more employees.

The requirement does not apply to public sector employers, Native American tribes or tax-exempt private membership clubs.

Required Data

The federal EEOC requires two components of data.  Those components are:

  • Component 1 data consists of number of employees sorted by 10 job categories, race/ethnicity and gender. Component 1 data is required annually and due by May 31. 
  • Component 2 data consists of hours worked and pay information broken down into the same categories as Component 1.

The deadline to submit 2017 and 2018 Component 2 data is September 30, 2019.  Only employers with 100 or more employees (including those employers with federal contracts) are required to provide Component 2 data.

Threshold

If an employer needs to determine if they meet the 100 employee threshold for 2017 or 2018, an employer should count the number of employees during a “workforce snapshot period” for the particular year.  The “workforce snapshot period” is an employer-selected pay period between October 1 and December 31 of the reporting year.

The workforce snapshot period for the 2017 EEO-1 report would be an employer-selected pay period between October 1, 2017, and December 31, 2017 and the workforce snapshot period for the 2018 EEO-1 report would be an employer-selected pay period between October 1, 2018, and December 31, 2018.  The only employees whose compensation and hours-worked data must be reported are those full- and part-time employees who were on the employer’s payroll during the workforce snapshot period.  Employers may choose a different workforce snapshot period for each of the two years.

Filing

The Component 2 data is reported under “Section D – Employment Data.” Employers will report this data through the Component 2 EEO-1 Online Filing System or by creating a data file and inputting their data in the appropriate fields in accordance with the data file specifications.

In order to determine the correct compensation band for employees as required in Component 2, employers are to use Box 1 wages from the W2.  Employers will then add up the total number of employees that fall into each band by job category.  Component 2 data must be submitted by September 30, 2019.  More information can be found here: https://eeoccomp2.norc.org/faq

Key Takeaway

Employers should determine if they qualify for the filing requirements by the EEOC.  If your organization does qualify you should make arrangements to file prior to the September 30, 2019 deadline to make sure you remain legally compliant and avoid all penalties associated with the rule.

If you have questions about this requirement, please contact your M3 account team.

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