In 2016, the EEOC revised its EEO-1 form that collects pay data from employers with 100 or more employees. The previous version of the EEO-1 form required employers to report the number of employees across ten job categories according to race, ethnicity, and sex. The revised form requires employers to submit aggregate W-2 earnings and hours worked in twelve pay bands for each of the ten job categories.  Employers, including federal contractors, are required to submit this “Component 2” compensation date for 2017 and 2018 if they have 100 or more employees during the “workforce snapshot” period for that year.  The deadline to submit Component 2 data is September 30, 2019.

With the reporting deadline looming, employers need to be aware of the following key points:

• The EEOC defines the “workforce snapshot” period as “an employer-selected pay period between October 1 and December 31 of the reporting year.” Employers are not required to select the same pay period for 2017 and 2018, and 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 must report aggregate W-2 earnings, including the total number of employees who fall into each compensation band by job category, for each of the EEO-1’s ten job categories. Employers must report W-2 earnings for all employees employed during the employer’s selected “workforce snapshot” period, regardless of whether the employee worked for the entire year.  Employers should not calculate and then report the annualized earnings for employees who did not work the full calendar year, and should still report only the W-2 earnings for those employees.
• Employers must report total hours worked during the year for all employees by race, ethnicity, and sex within the twelve pay bands. The reported hours worked should show actual hours worked by nonexempt employees, and for exempt employees either the actual hours worked or an estimated 20 hours per week for part-time exempt employees and 40 hours per week for full-time exempt employees.
• Employers must provide Component 2 date for all of its establishments, including those with less than 100 employees.
• For employers who have recently completed a merger or acquisition, the acquiring company is responsible for submitting Component 2 data of their acquired entity, regardless of whether the transaction occurred before or after the acquiring company’s workforce snapshot period. Similarly, where two companies merge to form a new entity, the new entity must report its Component 2 data, regardless of whether the merger occurred before or after the workforce snapshot period. If an acquiring, merged, or newly formed company does not have access to a former entity’s Component 2 data, the company should note that information the comments box on the certification page in the EEO-1 form.
• Freedom of Information Act Exemptions 3 and 4 may protect an employer’s Component 2 data reports from disclosure. FOIA Exemption 3 covers information that is prohibited from disclosure by another federal law.  Section 709(e) of Title VII  forbids “any [EEOC] officer or employee” from making “public in any manner whatever any information obtained by the Commission . . . prior to the institution of any [Title VII] proceeding . . . involving such information.”  The Supreme Court’s recent decision in Food Marketing Institute v. Argus Leader Media, 2019 WL 2570624 (June 24, 2019), holds that Exemption 4 protects information that is customarily and actually treated as private by its owner and provided to the government under an assurance of privacy.

Although the Component 2 reporting requirements may seem daunting, there is good news for employers.  On September 12, 2019, the EEOC announced that it is not seeking to renew the requirement that employers provide Component 2 pay data as part of their annual EEO-1 filings after this year.  The EEOC based its decision not to seek this data going forward based on the “unproven utility” of pay data to its enforcement programs and the burden the data collection imposes on employers.  The EEOC noted that it may choose to resurrect Component 2 pay data collection at some point in the future.  Burr & Forman will continue to monitor developments and provide further updates as needed.

To discuss further, please contact: Amy Jordan Wilkes in Birmingham at awilkes@burr.com or (205) 458-5358 or the Burr & Forman attorney with whom you regularly work.