The Equal Employment Opportunity Commission (EEOC) recently reinstated an EEO-1 reporting requirement for pay data collection (also known as Component 2 data) this year for the 2017 and 2018 calendar years. EEO-1 filers are now required to submit Component 2 data for the 2017 calendar year and pay data for the 2018 calendar year by September 30, 2019. With the September deadline creeping closer, here’s a snapshot of the reinstatement and what the new EEO-1 reporting requirement means for you.
Why The Reinstatement?
The reinstatement was due to a recent decision in the National Women’s Law Center, et al., v. Office of Management and Budget, et al., Civil Action No. 17-cv-2458 (D.D.C.) court decision. U.S. District Court Judge Tanya Chutkan ruled in a court case between the National Women’s Law Center and the Office of Management and Budget that the pay data collection component of EEO-1 reporting be reinstated for calendar years 2017 and 2018. The Office of Management and Budget initially approved the pay data collection requirement in August 2016 and then notified the EEOC in September 2017 they were reviewing the requirement and issued a stay for pay data collection reporting.
U.S. District Court Judge Chutkan ruled the Office of Management and Budget violated its own regulations, namely in issuing the stay and reviewing the pay data collection requirement after previously approving the standard in 2016. This ruling has resulted in the reinstatement of Component 2 pay data collection reporting.
Why Does This Matter?
Although the May 31st deadline for EEO-1 Component 1 reporting has passed, employers will now need to dig into their 2017 and 2018 employee records to pull together the pay data they’ve collected. It’s important to have easy access to this data and to ensure collected information is accurate, so penalties or court orders may be avoided:
Failure to File: Although your company won’t see fines and imprisonment for failing to complete EEO-1 Reporting, you may be subject to a court order from a U.S. District Court to submit employment data.
Wrong Data: Employers who purposefully submit incorrect EEO data can be subject to harsh punishments such as hefty fines or imprisonment.
EEO-1 Reporting Basics
If you’re unsure about what EEO-1 Reporting is and what type of employee data you’re subject to providing, let’s cover some basics:
What is EEO-1 Reporting?
The Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP) have been using Equal Employment Opportunity (EEO) data since 1966 as a means to analyze information of minority groups in the workforce and aid in the protection of civil rights.
These agencies gather employment data through the Standard Form 100 (EEO-1) Report, a federal statute and regulated compliance survey which collects employee information based on race/ethnicity, gender, and job category.
Who is Subject to EEO-1 Reporting?
While all employers with 15 or more employees are required to comply with Title VII of the Civil Rights Act of 1964, employers are only required to file the EEO-1 Report if:
They have 100 more or employees
They have less than 100 employees but owned or affiliated with another company with more than 100 employees overall
They have 50 or more employees and a federal contract/subcontract worth more than $50,000
They have 50 or more employees and serve as a depository of government funds, or acts as an issuing and paying institution for U.S. Savings Bonds and Savings Notes
Employers are not required to file an EEO-1 report if they have 50 or more employees, but are exempt under regulation 41 CFR 60-1.5.
Based on the number of establishments your business operates, the EEOC and OFCCP require different forms from employers. All single establishment employers (those participating in business at only one location) are required to complete an EEO-1 Report (Type 1) only. While multi-establishment employers are required to complete at least three report types for EEO reporting:
Consolidated Report (Type 2)
Headquarters Report (Type 3)
There are three different reports you can generate for the use of the Establishment Report:
Type 4 - one report for each establishment with 50 or more employees
Type 6 - one list of establishments with less than 50 employees including a data grid on their employees by race, gender, and job category
Type 8 - a separate report for each of these establishments
Know what data your company will need to collect well in advance of the reporting deadline. This way, you don’t run the risk of reporting errors or incorrect data that can lead to late submissions and potential penalties. If your company already submits employment data for EEO reporting, be sure to keep up-to-date on new requirements in case those developments impact your business’ filing requirements.
How a Workforce Management Solution Can Help
With the approaching EEO reporting deadline, does your current payroll and HR solution generate EEO-compliant reports? If not, you may be exposing your company to compliance risks and potential penalties. Consider making a switch to a workforce management solution that collects, analyzes EEO data and generates EEO-compliant reports automatically. A payroll and HR solution can help manage EEO-1 reporting by:
Collecting Employee Data
This can be the biggest hurdle employers run into when starting the EEO-1 reporting process because of the amount and nature of the information they are collecting. Compile sensitive employee data during the onboarding process when employees complete and submit hiring forms online. Then you can avoid spending hours manually entering employee information.
Generating EEO-Compliant Reports
Employers who are subject to EEO-1 reporting are required to submit employment data annually and having a solution that can handle the work of compiling, formatting, and generating an EEO-compliant report can make this yearly task much easier. Generating your reports using in a single-system database alleviates the burden of ensuring accuracy and timeliness.
Storing Data Electronically
EEOC regulations mandate that employers who file must keep all employment records for one year and payroll records for three years. Safely store years worth of sensitive employee information in a secure online database to create an audit log. This log of historical data may be accessed anytime in the event of an audit or updated reporting requirements to ensure compliance.
Reducing Violations and Penalties
Avoid harsh violations and costly penalties by collecting and submitting accurate information for EEO reporting with an automated, closed-loop workflow. From reporting correct data and submitting timely reports to safely storing employment and pay data, you’ll eliminate the opportunity for violations and penalties and make EEO-1 reporting a simple task.
Simplify Your EEO-1 Reporting
With the September 30th deadline approaching, now is the time to plan on how you’ll handle reinstated EEO-1 reporting requirements for 2017 and 2018 Component 2 data. Whether your business will be submitting this information or not, it is still a good practice to stay informed of compliance changes that can affect your business and workforce.
Once you’ve submitted your EEO Component 2 data, start reviewing your current data collecting and reporting processes (in-house or with your payroll and/or HR provider) and begin developing a plan for how you’ll manage future reporting tasks. Consider implementing a workforce management solution that automates EEO and compliance reporting, so you can quickly adapt to updated reporting requirements and easily meet deadlines.
How PayNortheast Can Help
PayNortheast has a mission: to make payroll, timekeeping and HR easier. We provide our clients and partners with intuitive technology delivered with personalized service and support. Our integrated solution is designed to simplify workforce management tasks. Process payroll in minutes, not hours. Automate HR workflows to be more strategic. Elevate the employee lifecycle with tools that empower your team. We are PayNortheast, your workforce partner.
Learn more about our services by visiting us at www.paynortheast.com, or give us a call - 631-306-4929