Private sector employers with at least 100 employees, and federal contractors with at least 50 employees should be well aware of the federal law requirement that they file an annual EEO-1 Report with the Equal Employment Opportunity Commission (EEOC) setting out certain demographic data regarding its employees. The EEO-1 reporting requirement has been in place since 1967. The EEOC is authorized to require reporting of employee data under Title VII of the Civil Rights Act of 1964 and federal regulations implementing that statute. The operative EEOC regulations addressing the various reporting requirements are found at 27 CFR 1602.7 through 1602.14. The nature and number of forms to be submitted vary based on how many office locations the employer maintains and the number of persons employed at each location.
The employee information that has always been required in the EEO-1 reporting process is the race, ethnicity and gender of employees in certain job classifications during a portion of the year. This snapshot of the racial/ethnic/gender composition of the workforce is to be taken from one pay period in the fourth quarter of the calendar year. The EEO-1 Report is then to be submitted to the EEOC by no later than March 31 the following year. Employers are now required to complete and submit the Report via an online portal.
There has been, however, a recent development in the EEO-1 reporting process that could substantially increase both the complexity of the Report and the time human resources staff must invest in preparing it. During the second term of the Obama Administration, the EEOC broadened the data to be collected from EEO-1 Reports to include not only the race, ethnicity and gender of employees in specified job classifications, but also W-2 wage data reported to those employees. All observers familiar with the process agree that this expanded EEO-1 reporting obligation will exponentially increase the number of fields to be completed in the online form and thereby significantly complicate the data collection and reporting process for employers.
Before this heightened reporting obligation could go into effect, however, the federal Office of Management and Budget (OMB) delayed its implementation due to concerns that collecting and evaluating the additional data would cause the EEOC to exceed budgeted funds. Consequently, employers subject to the EEO-1 reporting requirement have not yet been required to collect and report this additional data. That may soon change. In early March 2019, a United States District Court lifted the stay issued by the OMB, and thereby reinstated the reporting requirement for wage data. This ruling was issued exactly 2 weeks before the online portal for the 2018 EEO-1 Report opened on March 18, 2019. Almost immediately, there was a great deal of worry and consternation expressed by employment lawyers and human resources professionals. To address this concern, the District Court that issued the ruling ordered the EEOC to inform it by April 3, 2019 as to when the EEOC can begin receiving and processing the additional wage data for 2018.
According to the recent submission filed by the EEOC, it believes that it can at least receive the additional wage information for 2018 by September 30, 2019. The District Court has yet to evaluate the EEOC’s response and issue a further order either accepting this date, or imposing some other obligation.
Until that occurs, the following important deadlines should be noted by employers subject to the EEO-1 reporting requirement. First, as luck would have it, the March 31, 2019 filing date was previously extended to May 31, 2019 due to the federal government shutdown occurring in January and February. Employers should be prepared to file the typical Report of race/ethnicity and gender data (which may be referred to as “Category 1” or “Component 1” data) by that date. Now comes the tricky part. Prudent employers should start the process of collecting the additional wage information (referred to as either “Category 2” or “Component 2” data) for a possible submission deadline of September 30, 2019. Employers should expect the online reporting forms to be substantially more complicated and to require significantly more time to complete and file. Planning for this should commence in the very near term.
It is of course very possible, if not likely, that the EEOC may seek appellate review of the Federal District Court’s Order requiring that it comply with its own regulations. I will report as further information is made known.
If you would like information on this or any other matter, you may contact John Lawhorn
at (865) 546-9321.