Editor's note: Updated on 2.11.20 with the most up-to-date information.
After a flurry of changes and criticism surrounding EEO-1 data requirements, the Equal Employment Opportunity Commission (EEOC) announced yet another pivot. It will still require employers to submit detailed Component 2 pay data, but only for this year. As far as 2020 is concerned, the feds are squashing the requirement.
Confused? Not to worry. Today we’re answering the most important questions about the EEO-1 and the recent changes. Let’s dive in — starting back at square one.
What is the EEO-1 report?
The EEO-1 report is an annual government survey that’s used to collect workforce data. The EEOC and other federal agencies use the collected data to support civil rights enforcement and analyze employment patterns, such as the representation of women and minorities in organizations, industries and regions.
Who is required to file the EEO-1 report?
All US employers with establishments located in any of the 50 states or the District of Columbia are legally required to file the EEO-1 report if they meet any of the following criteria:
- Have 100 or more employees; or
- Have 50 or more employees and have a federal contract (prime contract or first-tier subcontract) amounting to $50,000 or more.
How should employees be counted?
Companies with centralized ownership, control or management should count employees across all of their organizations to determine if they meet the 50 or 100 employee thresholds. Organizations should also err on the side of caution when counting employees. For example, if an employer has met the 50 or 100 employee threshold at some point during the year (and not at other points in the year), they should either file their EEO-1 report or seek legal guidance regarding compliance. For more information, employers can check out the FAQs posted by the EEOC.
What information is collected in the EEO-1 report?
The EEO-1 report is not new — it dates all the way back to 1966. However, it’s undergone a few changes over the years, the most recent of which required employers to provide more detailed data. The report includes two components, the second of which is not required in 2020. Here’s what you need to know:
- Component 1 requires that employers report the number of employees (headcount) who work for the business, organized by job category, race/ethnicity and sex. This is the data that qualifying employers are already used to providing. Below is a sample of what the Component 1 data report looks like.
- Component 2 asks that employers report employee earnings and hours worked in 12 pay bands by race/ethnicity and sex in each of the current EEO job categories. Originally the EEOC planned to collect both Component 1 and Component 2 data every year. However, the EEOC confirmed that it’s ditching the Component 2 data moving forward and will go back to only collecting Component 1 data.
Why the change of heart? After crunching the numbers, it was determined that the financial burden on employers was much higher than originally forecasted. The burden for Component 1 data was deemed “fine,” but the burden for Component 2 data was even too much for the feds to bear. The EEOC apparently has what they need for 2017 and 2018 and then, as they say, that's the end of the road for Component 2.
Is the required EEO-1 data available in Orbit Solutions?
As always, Payroll Data clients that use our Orbit Human Resources product can use the EEO-1 report for the Component 1 data that will still be required next year. If you’re interested in learning more about Orbit Human Resources check out our product overview sheet or reach out with questions!