Blog

Jul 24 2019

TIME TO COMPILE PAY REPORTS FOR EEOC

By: Margaret M. Sheahan

 

Employers with 100 or more employees and some smaller federal contractors are used to filing annual reports with the EEOC stating the numbers of males, females and members of various ethnic groups they employ in each of 10 defined job categories. 

After a great deal of legal and political wrangling, and even though an appeal of the latest court decision is in the works, no stay is in place. The EEOC has now set a deadline of September 30, 2019 for qualifying employers to report pay information about their workforces in 2017 and 2018.  This is not a simple undertaking.  It requires a good deal of analysis, and data collection and sorting to get this right and the remaining time is short. 

The pay data report is called “Component 2” of the “EEO-1 Report.” Only employers (even federal contractors) with 100 or more employees during a “snapshot period” in 2017 or 2018 must file Component 2 for that year.  The “snapshot period” is any pay period the employer chooses falling in the period October 1 and December 31 of the reporting year.  Different snapshot periods can be selected for each reporting year.  The employer may select a pay period with fewer than 100 employees on staff and not file a report, even if other pay periods had qualifying staff levels. 

The employer needs to sort the employees on staff in the snapshot period among 12 identified compensation bands by comparing the W-2 Box 1 amount reported.  It does not matter if the employee was assigned out of the country or at a part of the organization with a different Federal Employment Information Number, ow did not work for the employer in part of the reporting year outside the snapshot period.  Report for each worker on payroll during the snapshot period and use the W-2 Box 1 number.   The employer will also have to identify which of the ten EE0-1 job categories each of the employees’ job fits.  The form divides each EEO-1 category into the twelve compensation bands, the employer must identify the correct sex and ethnic identity category for each employee and enter the correct totals on the form. 

The Component 2 form also requires reporting the hours worked during the whole reporting year for each employee captured in the snapshot period, also in an EEO-1 job category and compensation band/ sex and ethnic identity category divided chart.   For non-exempt workers, this should be the actual hours worked, excluding paid time off, like vacation, sick and holiday time.  For exempt workers, the employer can use actual hours data if available, or substitute a “proxy” of 40 hours per week for full-timers and 20 hours for part-timers or a different, suitable proxy for the employer’s actual practice.  It is also permissible to use actual data for some and proxy data for other exempt employees. 

The project can raise other questions if employees work at one facility but are managed from another, if an employer changed payroll vendors since 2017, if a merger or acquisition occurred in a reporting year, or any of the many other business realities that do not readily fit a questionnaire designed for mass consumption.  The EEOC’s website actually has helpful material for this process including sample forms and frequently asked questions. 

It is certainly not too early to start on this project! 


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