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News & Press: EEO News

EEOC Officially Reinstates “Component 2” Reporting And Sets Deadlines

Thursday, May 2, 2019   (0 Comments)
Posted by: Matt Nusbaum
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As anticipated, the Equal Employment Opportunity Commission (EEOC) has published a notice in the Federal Register announcing the “immediate reinstatement of the Revised EEO-1: Pay Data Collection,” commonly known as “Component 2.” EEOC’s initial announcement stated that the agency intends to collect 2018 pay data by September 30, 2019 (opening the survey some time in mid-July), but had not yet determined whether or not the agency would collect 2017 pay data.

Now the EEOC has scheduled the publication of a follow-up announcement in tomorrow’s Federal Register stating that the agency has determined that they will, in fact, be collecting 2017 and 2018 pay data. More importantly, they are going to collect both between mid-July and September 30 of this year.

By the time the EEOC re-opens the survey in July to collect the “Component 2” data, employers will have already filed their “regular” (Component 1) 2018 EEO-1 reports. And, of course, 2017 reports were filed last year. It remains to be seen how the EEOC will require employers to report the 2017 and 2018 Component 2 data, particularly those that file via the data upload option. Will employers be required to essentially re-file 2017 and 2018 reports with Component 2 data added in, or will employers be allowed to upload just the Component 2 portions? We won’t know until the EEOC releases more information.

In the meantime, employers are encouraged to start preparing now. That requires first getting your hands on the employee snapshot data used for the 2017 and 2018 reporting cycles. The employee ID numbers in those snapshots represent the universe of employees for the Component 2 data.

Using the 2017 and 2018 snapshots, the next step is to query the payroll system for total-year W-2 wages and total-year hours worked. For the 2017 snapshot population, wages and hours should reflect the totals for calendar year 2017. For the 2018 snapshot population, the data should reflect the totals for calendar year 2018.

The total-year W-2 wages should be whatever was reported in “Box 1” on the employee’s W-2 form. The EEOC expects that this information is readily available in most payroll systems.

Total hours worked could present more of a challenge. For FLSA non-exempt employees, the EEOC expects employers to use the actual total number of hours worked for each employee (because the FLSA requires employers to track that information). For FLSA exempt employees, employers are expected to use actual total hours worked if that information is captured; otherwise, employers are allowed to calculate an estimated total hours worked for each employee using 40 hours per week for full-time exempt employees, or 20 hours per week for part-time exempt employees. Be mindful of employees who switched from part- to full-time or vice versa during the calendar year and adjust their estimated total-hours-worked calculation accordingly.

Do not get distracted by whether or not any particular employee was in the same job the entire year or employed by the company the entire year. You are not required to collect pay and hours-worked data only for the period each employee occupied the job they were in when the snapshot was taken. You need total W-2 compensation earned and total hours worked in any capacity for the employees in each snapshot.

With total W-2 earnings and total-hours-worked added to your 2017 and 2018 EEO-1 snapshot data, you will be well poised to prepare your upload files when the EEOC releases those specifications sometime before the survey re-opens in mid-July.

Employers will likely want to evaluate the compensation data they are about to submit to the federal government, but the EEOC has not published any useful information yet as to whether, and to what extent, that data will be analyzed by the government, much less how. Stay tuned for an upcoming blog post by Dr. Dan Kuang with suggestions for how to approach those statistical analyses.

In the meantime, Biddle consultants are available to help you navigate these new waters. Contact a Biddle EEO/AA specialist at staff@biddle.com.


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