Authors: Cody Bengtson, Kenya Spann
The United States Equal Employment Opportunity Commission (EEOC) recently announced the collection period for the EEO-1 Component 1 data filing deadline is July 19, 2021. Last year, the EEOC delayed the required filing due to the COVID-19 public health emergency. Given the delay in submission, private employers with 100 or more employees and federal contractors with 50 or more employees are now required to submit two years' of EEO-1 Component 1 data reports: one with 2019 EEO-1 data and the other with 2020 EEO-1 data. Employers will be required to first file their 2019 report and then file for 2020 once the 2019 report is confirmed and certified. Employers should be preparing to submit their Component 1 data for both years no later than the July 19th deadline.
What is the EEO-1 Component 1 Report?
The EEO-1 Component 1 report is a mandatory annual filing in which employers submit data on the race, ethnicity, and gender composition of their workforce by job categories as specified by the EEOC. The report must include the required data from any pay period occurring during October through December. Employers that have filed reports in prior years will receive a letter by U.S. mail with the appropriate credentials to create a new user account in the new EEO-1 Component 1 Online Filing System. Prior login credentials will not work in the new system. First-time filers will need to register their company and create a user ID in the Online Filing System.
History of EEO-1 and Component 2
Most EEO-1 filers may recall in 2019 the EEOC amended its EEO-1 annual filing, requiring employers to include W-2 compensation data and data regarding hours worked, categorized by race, ethnicity, gender and job category, for the 2017 and 2018 calendar years. This additional data collection requirement was referred to as Component 2. After a lengthy and contentious legal battle, the EEOC decided to discontinue its collection efforts of the Component 2 data.
Self-Identification under Component 1 and filing EEO-1 Report
Turning our attention back to Component 1, employers may have also struggled in the past with employees who do not want to self-identify for purposes of filing the EEO-1 report. Additional conflict from a federal level has arisen in regards to self-identification for employees who identify as a non-binary gender. As it stands right now, there is no federal guidance on how to report non-binary identifying employees as the EEO-1 report only contains options for male and female. Nearly all guidance to date on self-identification forms has dictated that employers cannot override an employee's self-identification form elections. Yet, employers may be able to lean on prior guidance related to employees who refused to identify their race/ethnicity; employers may be able to turn to "visual survey" as information as referenced by the Question and Answer number 88 from the Questions and Answers to the Uniform Guidelines on Employee Selection Procedures. Until this is offered additional guidance from a regulating body, employers may have to resort to this method until further notice.
California and Illinois State Laws for Employers
At the state level, California and Illinois have passed laws requiring employers to make pay more transparent by having them file and submit pay data directly to their respective states. In March 2021, California required private employers who have 100 or more employees (with at least one employee in California) to submit an annual pay data report to the California Department of Fair Employment and Housing. Employers were required to include a breakdown of employees by race, ethnicity, and gender in ten specifically defined job categories. This data was further broken down by employee compensation data categorized using the U.S. Bureau of Labor Statistics in the Occupational Employment Statistics survey. For purposes of establishing the numbers to be reported under this paragraph, the employer shall identify the total earnings during the reporting year, as shown on the Internal Revenue Service Form W-2, for each employee.
While California may have expedited their reporting timetable requirements to be filed in March 2021, Illinois has planned farther down the road. Illinois employers will be required to comply with its new pay data reporting law beginning January 1, 2023 and also requires obtaining an equal pay registration certificate by March 24, 2024.
A Look Ahead for State Laws and Wage Transparency and Identification
This may be just the beginning as more states may seek to put forth laws requiring more transparency around wage and identification patterns. It will be more important than ever for employers to review compensation and self-reporting practices and seek out where there may be shortfalls. Employers must begin taking steps to bring themselves into compliance with any changes around these filings.
For additional information regarding the EEO-1 data collection requirements, employers can visit https://EEOCdata.org or contact your Gallagher Career Wellbeing Specialist.
