EEO-1 Component 1 reporting law guide
Introduction
All private U.S. employers with 100 or more employees, and federal contractors with more than 50 employees, are required by the Equal Employment Opportunity Commission (EEOC) to submit EEO-1 Component 1 reports annually.
The EEO-1 report is an annual summary of an organization's demographic workforce data. Information must be gathered from an employer-selected "workforce snapshot pay period" during the final quarter of each year (Oct. 1 through Dec. 31).
Filing is required by the EEOC to ensure compliance with Title VII of the Civil Rights Act of 1964.
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EEO-1 Reporting Requirements
Who Needs to Report?
EEO-1 Component 1 reports are required from the following organizations:
- Private employers with 100 or more employees.
- Private employers with fewer than 100 employees that are affiliated with, or owned by, a parent company, and constitute a single entity that has more than 100 employees overall.
- Federal contractors or first-tier subcontractors with 50 or more employees and contracts of $50,000 or more (Executive Order 11246).
- Organizations with 50 or more employees serving as a depository of government funds, or a financial institution that is an issuing and paying agent for U.S. savings bonds and savings notes.
Companies must register via the EEO-1 Component 1 Online Filing System (OFS).
What to Report?
EEO-1 requires employers to submit workforce demographic workforce data, i.e., employee data by race/ethnicity, sex, and job category, including all full-time and part-time employees.
EEO categorizes jobs as follows:
- Executive/senior-level officials and managers
- First/mid-level officials and managers
- Professionals
- Technicians
- Sales Workers
- Administrative support workers
- Craft workers
- Operatives
- Laborers and helpers
- Service workers
Job classification is broadly based on three criteria: responsibilities and primary duties, knowledge, and level of skill the job requires. Reporting also shows how different demographic groups fall into different compensation brackets.
Employees are categorized by their ethnicity and race. For 2023 reporting purposes, these categories included:
- White (not Hispanic or Latino)
- Native Hawaiian or other Pacific Islander (not Hispanic or Latino)
- American Indian or Native Alaskan (not Hispanic or Latino)
- Asian (not Hispanic or Latino)
- Hispanic or Latino
- Black or African American (not Hispanic or Latino)
- Two or More Races (Not Hispanic or Latino)
Types of EEO-1 Reports
Employers operating in one location are referred to as "single-establishment" employers and are required to file a Type 1 report.
Organizations operating in more than one establishment are referred to as "multi-establishment" and are required to submit and certify three types of EEO-1 Component 1 reports, i.e., "Consolidated Report," "Headquarters Report," and "Establishment-Level Report(s)."
Where and When to Report?
Relevant employers must report on the above mentioned requirements as follow:
Regulatory Filing: EEO-1 Component 1 reports are filed with the EEOC annually during the specified filing period. Updates relating to EEO-1 Component 1 data collection are posted to www.eeocdata.org/eeo1, including EEO-1 Component 1 Instruction Booklet and EEO1-Component 1 Data File Upload Specifications.
Internal/External Posting: Data is submitted to the EEOC on a confidential basis and internal reporting or public posting is not required. Aggregated data is available to the public. Employer information is also shared with other authorized federal agencies.
Deadlines and Cadence: The EEOC determines filing dates each year. The filing period for submission of 2023 data is April 30, through June 4, 2024.
Exemptions: Higher education institutions, American Indian or Alaska Native tribes, and tax-exempt private membership clubs (other than labor organizations) are not required to file an EEO-1 report. Businesses in Puerto Rico, the Virgin Islands or other U.S. Territories are also exempt.
Employment equity standards
The EEO-1 Component 1 report has its origins in the civil rights movement of the 1960s and the subsequent passage of landmark legislation aimed at combating discrimination in the United States.
Specifically, it was established in response to Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on race, color, religion, sex, and national origin. The Component 1 report also helps the federal government track data on the standards stipulated in the Equal Pay Act, which requires that men and women be given equal pay for equal work in the same establishment.
Under U.S. Federal law , it is illegal to discriminate against a job applicant or an employee on the basis of race, color, religion, sex (including pregnancy and related conditions, gender identity, and sexual orientation), national origin, age (40 or older), disability or genetic information.
These federal anti-discrimination laws apply to most employers and across hiring and promotion decisions, salary and benefits compensation, training, and termination. Employers are required to post a notice describing these federal employment discrimination laws and protections.
EEO-1 Pay Transparency Requirements
The EEOC does not require pay transparency reporting at present. However, employers may be subject to local jurisdiction and/or state pay transparency legislation. For instance, Illinois requires salary and benefits transparency in all job postings.
Advancing equal pay is named as one of the EEOC's six targeted objectives 2024 through 2028.
The Risks of Non-Compliance
While there are no financial penalties for non-compliance, late filing or failure to file may lead to penalties, including a court order to file. Employers may be held in contempt for failing to respond. Federal contractors and subcontractors that fail to comply may have their contracts terminated, or be prohibited from being awarded government contracts in the future.
Companies that willfully falsify EEO-1 reports are at risk of fines, or in some cases imprisonment.
In 2023, the EEOC entered into an alliance with the Department of Labor Wage and Hour Division. Unlawful compensation practices, and employment discrimination based on protected classes are two target areas for potential investigation and enforcement.
How Can Trusaic Assist with EEO-1 Reporting Compliance?
Leveraging Trusaic's Workplace Equity product suite can help every applicable U.S. employer in preparing employee pay and demographic data and submitting their EEO-1 forms.
1. Comply - Use Trusaic's RAPTR solution to complete required reporting by compliance deadlines:
Applicability Determination: Perform an accurate assessment of your applicability, according to jurisdictional specific definitions and regulatory frameworks so you can understand your reporting obligations across the globe.
Deadline Management: Prepare ahead of time with project timelines, timely notifications, and reminders, to keep you on track to meeting jurisdictional deadlines.
Expert Legal Guidance and Support: Benefit from the expertise of our trusted pay equity attorneys, so you understand your compliance requirements across a diverse global regulatory landscape.
Receive world-class customer support, including assistance throughout the compliance process.
Streamlined Data Extraction: Collect the necessary data for analysis and submission with a simple click of a button; powered by certified data integrations with world's largest HCM, HR and Payroll platforms, including Workday, SAP, UKG and ADP.
Provide data through Trusaic's Workplace Equity platform, a SOC 2 Type II and GDPR-compliant tool for data transmission.
Data Quality Assurance: Trusaic performs data validations to ensure your collected data and information aligns with the standards and definitions provided by each jurisdiction.
Compliant Report Outputs: Take away the burden of reporting by effortlessly generating outputs containing necessary compliance information.
Reporting Checklist: Follow step-by-step guidance on where, when and how to report to any jurisdiction's regulatory body, as well as your required internal disclosure and public posting obligations.
2. Correct - Use PayParity and OpportunityParity to understand, explain and resolve pay disparities:
Risk Assessments: Stay aware of any potential exposure to any government audit or litigation.
Our cross-functional team of data scientists, statisticians, and government regulatory compliance experts have rigorously worked to reverse-engineer the calculations that will be used by jurisdictions to estimate pay disparities, so you can prepare in advance.
Understand your Pay Gaps: Leverage Trusaic's PayParity solution to explain your pay gaps so you can understand the root causes and safeguard from equal pay claims and legal action.
Resolve Pay Disparities: Make pay adjustments where applicable so you can eliminate pay disparities and show improvements in your reported pay gaps from one year to the next.
Identify Barriers to Professional Growth: Ensure workforce diversity and equity with hiring, promotion, retention, and opportunity analytics using OpportunityParity.
3. Communicate - Use Trusaic's Workplace Equity Solution to communicate narratives and share salary ranges with confidence:
Pay Equity Narrative: Communicate the sources of your pay gaps, progress objectives, and corrective measures to employees and internal stakeholders with Trusaic's Workplace Equity product suite.
Show data-backed progress in your pay gaps over time.
Salary Range Explainability: Use Salary Range Finder to establish and post competitive and equitable pay ranges to confidently comply with pay transparency laws.
Mitigate Risk of Recurrent Pay Disparities: Ensure new hires receive fair pay offers with the use of external labor market data and internal pay equity analytics to reduce unplanned and expensive pay remediations.