We participated in a webinar this month with HR.com on the new EEO-1 Report Component 2 pay data filing requirement, “Potential Challenges and Pitfalls of Submitting Pay Data in the 2019 EEO-1 Report.”
During the webinar, I was asked several questions about this new EEO-1 Report pay data filing requirement that needs to be submitted by private employers and federal contractors with more than 100 employees to the U.S. Equal Employment Opportunity Commission. The deadline is September 30, 2019.
Below are six questions and answers I thought would be of interest to share in a blog post. You can find the webinar and the full Q&A by clicking here.
Question: If for 2017 we didn’t file an EEO-1 Component 1 for one of our companies, are we required to file Component 2 if they have more than 100 employees? Answer: Component 2 Reporting is a separate obligation from Component 1. If the company has at least 100 employees during the workforce snapshot period, the company will need to file Component 2 for that particular year.
Question: In 2017 we used one EIN and in 2018 used multiple. Do you need to use and reflect the same EINs for these reports? Answer: Each reporting year (2017 and 2018) requires separate reporting. A company will be able to reflect the different EINs in each respective report. According to the EEOC NORC helpdesk, multiple EINs can be included in one filing, e.g., for 2018.
Question: Do we need to exclude the hours for paid leave for exempt employees or just hourly? Answer: EEOC indicates that only hours actually worked would be totaled and entered, including for exempt employees. Paid time off is not intended to be included in Total Hours entries. If hours worked for exempt employees are not tracked, a 40-hour proxy for full-time employees and a 20-hour proxy for part-time employees, per week, may be used.
Question: How do you handle work from home employees? Answer: According to the EEOC: Employees who telework, i.e. work from home, must be included in the EEO-1 report for the establishment to which they report. If remote employees report to the corporate office, they may be included in the Headquarters Report, for example.
Question: What should you do if the employee does not give you the information on their race? Answer: According to the EEOC Component 2 Instruction Booklet, on page 10, if an employee declines to self-identify his or her race and/or ethnicity, employment records or observer identification may be used.
Question: Why do you recommend a pay equity audit? Answer: Companies should consider a pay equity audit in order to understand whether they have gaps in their compensation structures, whether those gaps are justified at least in part, and to quantify the unjustified gaps to determine whether any adjustments are needed to mitigate the risks associated with lawsuits, regulatory investigations, employee disengagement as a result of unjustified pay gaps, and bad PR. For more information on pay equity audits, click here.
If your organization’s executive or HR team is feeling anxious about submitting their pay data to the EEOC with the deadline looming, some third-party experts can help manage the filing process for you. Learn more by clicking here.