The Equal Employment Opportunity Commission’s (EEOC) web-based portal for the collection of newly required pay and hours-worked data is now live, but many employers that are supposed to file the reports may still have trouble meeting the September 30 deadline.
The EEOC announced on July 15 that the portal was open to accept the pay and hours-worked data—what’s being called Component 2 of the EEO-1 report. Employers required to make EEO-1 reports are to submit the data for 2017 and 2018 as part of their annual reports.
Private-sector employers with at least 100 employees and all federal contractors and subcontractors with at least 50 employees and at least one federal contract or subcontract worth at least $50,000 are required to file the annual EEO-1 report.
The report has always required employers to report race/ethnicity, gender, and job category information about their workforce, what’s now being called Component 1. (Component 1 reports were due May 31, 2019.)
The new Component 2 requirement was added near the end of the Obama administration to help combat pay inequality, but in 2017, before the new requirement went into effect, the Trump administration issued a stay, claiming the new requirement was too burdensome.
Then in March 2019, a federal district judge hearing a lawsuit filed by the National Women’s Law Center lifted the stay and in April ruled the Component 2 data would be due September 30.
That deadline is expected to be tough to meet, according to Maggie Spell, an attorney with Jones Walker LLP in New Orleans, Louisiana. Some early surveys have found that as many as 75 percent of employers required to file Component 2 data doubt they will be able to comply by the deadline.
“Based on what we’re hearing, this estimate is probably still accurate,” Spell says. “We expect many employers will throw their hands up in defeat or, since there is no fine or penalty for not filing, just ignore the report deadline.”
Nita Beecher, an attorney with Fortney & Scott, LLC in Washington, D.C., says she thinks employers will do their best to comply by September 30 and points out the judge is keeping jurisdiction over the case until a set percentage of employers submit their data.
Technically, the EEOC can sue employers and require them to submit their data, “but I doubt that would be the first step they take,” Beecher says.
Spell also says the EEOC would have to sue to compel noncompliant employers to file, “which seems impractical and highly unlikely given the sheer number of employers who may not comply and the EEOC’s lack of resources.”
But federal contractors who are being audited by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) could see some risk since the OFCCP could compel compliance as part of a conciliation agreement, Spell says.
On the same day the EEOC announced the two years of pay data it would collect (2017 and 2018), the U.S. Justice Department filed a notice of appeal of the court ruling that reinstated the Component 2 requirement. But Spell says that appeal will have no impact on the filing requirement since the parties didn’t ask for an expedited appeal, so briefs in the appeal won’t even be due before the September filing deadline.
Advice for Employers
“I have seen some advice that employers not provide the data,” Beecher says. “The judge has heard this advice and will be watching the level of employers participation. Therefore, I recommend employers provide the Component 2 data as best as they can.”
Spell, an editor of Louisiana Employment Law Letter, says her firm isn’t advising anyone not to comply but is informing employers of the consequences and assisting those with the resources to comply to do so.
The EEOC’s announcement says employers are required to submit the Component 2 data if they had 100 or more employees during the 2017 or 2018 workforce snapshot periods. The snapshot period is an employer-selected pay period between October 1 and December 31 of the reporting year.
The EEOC has contracted with NORC at the University of Chicago to conduct the Component 2 data collection. In addition to the data collection portal available for all filers, a data file upload function and validation process is expected to be available by August 15 as an alternative method for employers.
Tammy Binford writes and edits news alerts and newsletter articles on labor and employment law topics for BLR web and print publications.