The U.S. Equal Employment Opportunity Commission (EEOC) recently announced its effort to modernize the agency’s EEO data collection by revising the procedures for professional employer organizations (PEOs), administrative services organizations (ASOs), human resource outsourcing organizations (HROs), and other similar organizations (“third-party human resource organizations”) to file EEO-1 Component 1 on behalf of a “client employer” or “client company.” In particular, the EEOC made the following changes:
- Each client company must have its own EIN (i.e., employer identification number or federal tax identification number (FEIN)) if a third-party human resource organization will file the EEO-1 Component 1 on its behalf. The company registration must be for the client company and not the third-party human resource organization. Every filer is required to have an individual-level user account to access the EEO-1 Component 1 Online Filing System.
- Once the client company creates its own registration record, it can invite the third-party human resource organization to create an associated user account and then file the EEO-1 Component 1 Report on behalf of the client company.
- The third-party human resource organization will not be allowed to file an EEO-1 Component 1 Report that includes itself and the client company and/or a report that includes multiple client employers.
- The third-party human resource organization is not allowed to certify a client company’s EEO-1 Component 1 Report or serve as the client employer’s “certifying official.”
These procedural changes may make it more onerous for third-party human resource organizations to file the EEO-1 Component 1 Report on behalf of client companies. Client companies that have used third-party human resource organizations in the past or intend to use them this year may want to plan accordingly and make the necessary adjustments to allow for the new procedures. In addition to announcing these changes, the EEOC also provided a fact sheet and guidance in the form of frequently asked questions concerning these changes.
It is likely that the EEOC will release additional changes as the tentative opening date, set for April 12, 2022, for the 2021 EEO-1 filing platform approaches. In addition to the above announcement, the EEOC has announced the end of the Type 6 reports, which many large employers used. One item of particular interest to filers will be to see how the EEOC plans to deal with the backlog of merger, acquisition, and spinoff requests, which was not processed during the 2019 and 2020 EEO-1 filing process. While the EEOC told employers to indicate such changes in the comments of the EEO-1s filed for 2019 and 2020, this was a major departure from the prior system which required manual EEOC processing of such changes. As part of its recent announcement, the EEOC also indicated that it plans to release updated resource materials and additional instructions prior to the opening of the 2021 filing platform.
Ogletree Deakins’ Affirmative Action and OFCCP Compliance Practice Group will continue to monitor developments with respect to these and other policy changes and will post updates on the Affirmative Action / OFCCP and Government Contractors blogs. Important information for employers is also available via the firm’s webinar and podcast programs.