EEOC Provides Guidance on EEO-1 Component 2 Filing

On July 1, 2019, the Equal Employment Opportunity Commission (EEOC) updated the Component 2 filing site with answers to frequently asked questions (FAQs) and other materials to assist filers with the submission of Component 2 data. Here are a few highlights from the new materials.

Deadline

• As previously noted, employers must file 2017 and 2018 Component 2 compensation data by September 30, 2019.

Employee Thresholds

• Employers, including federal contractors, are required to submit Component 2 compensation data for 2017 if they have 100 or more employees during the 2017 workforce snapshot period.
• Employers, including federal contractors, are required to submit Component 2 compensation data for 2018 if they have 100 or more employees during the 2018 workforce snapshot period.
• Federal contractors with 50-99 employees are not required to report Component 2 compensation data.

Snapshot Period

• The workforce snapshot period continues to be an employer-selected pay period between October 1 and December 31 of the reporting year. The only employees whose compensation and hours-worked data must be reported are those full- and part-time employees who were on the employer’s payroll during the workforce snapshot period.
• Employers are permitted to choose a different workforce snapshot period for reporting Component 2 data for 2017 and 2018. In addition, employers are not obligated to choose a pay period when it has 100 or more employees.
• As a result, employers with workforces that fluctuated above and below the 100-employee threshold in October through December may choose a workforce snapshot period where the employee population fell below 100 employees and avoid the Component 2 filing requirement.
• In many circumstances, it is favorable for employers to use the same snapshot date as was used for the 2017 and 2018 Component 1 filings.

Compensation Bands

• To identify the compensation band in which to count an employee, employers are to use “Box 1 – Wages, tips, other compensation” of Internal Revenue Service (IRS) Form W–2 as the measure of pay for Component 2. Employers are required to report the W-2 Box 1 income only for the selected workforce snapshot period employees.
• Employers may not use gross annual earnings instead of W-2 Box 1 earnings.

“Hours Worked”

• The Component 2 instructions adopt the Fair Labor Standards Act (FLSA) definition of “hours worked.” Therefore, the hours-worked data that employers will report for the EEO-1 Component 2 will be based on the same hours worked that employers record for FLSA purposes. FLSA hours worked generally do not include paid leave, such as sick leave, vacation leave, or paid holidays.
• For an employee who is exempt from the FLSA, employers have the option to report the designated proxy hours of 40 or 20 hours per week for each week the employee worked that year or, alternatively, to report actual hours worked, as defined by the FLSA, if the employer already maintains records of actual hours worked for that employee.

Online Reporting

• Employers will report data through the Component 2 EEO-1 online filing system or by creating a data file and inputting their data in the appropriate fields in accordance with the data file specifications. The data file specifications have not yet been released.
• Employers will be unable to access their 2017 and 2018 Component 1 reports in the Component 2 EEO-1 online filing system.
• Data from previously filed 2017 and 2018 EEO-1 reports will not be in the new online application for the reporting of Component 2 data. There will be no pre-population of historical data in the Component 2 EEO-1 online filing system.

Component 2 Form

• The Component 2 form mirrors the form originally released in 2016.

As we continue to review the most recent materials released by the EEOC, we will provide additional updates. We will present a webinar on the Component 2 filing requirement on August 7, 2019. Register here.