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New Pay Data Requirement for Some Employers

New Pay Data Requirement for Some Employers

July 24, 2019

A week ago, the Equal Employment Opportunity Commission sent notices to employers who are EEO-1 filers, i.e., employers that have 100 or more employees, either alone or in conjunction with related entities, or which are federal government contractors with 50 or more employees.  The notices remind employers that, due to regulatory changes which date back to 2016, these employers have two EEO-1 deadlines to meet this year.  Even though litigation is currently pending, employers are being cautioned that they must comply in a timely manner. 

Component 1 information, which includes information on employee race, gender, EEO-1 job category, and physical location category based on a payroll period in October, November, or December 2018 were due to be submitted by May 31, 2019.  That is the EEO-1 form that covered employers are accustomed to using.   

The second deadline relates to the new Component 2 information for pay data.  This separate form requires employers to submit information to the EEOC regarding hours of service and W-2 wage or salary data for their employees for calendar years 2017 and 2018.  This new form must be submitted by September 30, 2019.

The new form for Component 2 has two separate parts.  In the first, the employer is required to categorize all employees by the EEO-1 job categories, race, and gender, and then identify which wage or salary compensation band the employee falls within.  Then, in the second part, the employer has to state how many hours each employee worked in the relevant year, and identify the employee’s race, gender, and compensation band.   

Gathering data for Component 1 of the EEO-1 is relatively easy, as it just requires information about the employer's number of workers, broken down by race, ethnicity, and gender. Component 2, however, is much more complicated and involves the collection of much more information, including hours worked and pay information. Proper completion of the form is made more difficult by the fact that employers must provide data not just for 2018, but for the past two years. The process will be particularly difficult when employees only worked a portion of the year, or were absent from work for leave covered by FMLA or USERRA, or if the employee was reclassified to exempt or nonexempt during the reporting period. 

Because completion and submission of the form will be time-consuming, employers should start as soon as possible.  The employment lawyers at Martin Pringle are available to help with the process, if needed. 

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