The EEOC’s website now provides information employers may need for filing Component 2 data, such as a sample form, an instruction booklet and FAQs for covered employers. The agency confirmed that the Component 2 online filing system will be available July 15, and additional instructions will come soon. The agency also will send login information to covered employers through the U.S. Postal Service and by e‑mail.
The EEOC uses information about the number of women and minorities companies employ to support civil rights enforcement and analyze employment patterns, according to the agency.
Under Component 2, employers must report wage information from Box 1 of the W‑2 forms and total hours worked for all employees, categorized by race, ethnicity and sex, within 12 proposed pay ranges.
“Employers may not use gross annual earnings instead of W-2 Box 1 earnings,” noted Kiosha Dickey, an attorney with Ogletree Deakins in Columbia, S.C., and Jay Patton, an attorney with Ogletree Deakins in Birmingham, Ala.
The report should show actual hours worked by nonexempt employees, an estimated 20 hours worked per week for part-time exempt employees, and 40 hours worked per week for full-time exempt employees.
As with Component 1 data, employers should select a pay period between Oct. 1 and Dec. 31 of the reporting year as the “workforce snapshot period” for Component 2 data, the agency guidance said.
“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,” Dickey and Patton explained.
The federal government initially halted plans to collect pay data so it could review the appropriateness of the revised EEO-1 form under the Paperwork Reduction Act.
The worker advocacy groups that filed the lawsuit said the information would help them evaluate pay disparities and better serve their clients. Furthermore, requiring equal-pay data collection would “encourage companies to identify and correct pay disparities and allow the EEOC to more effectively and efficiently root out and address pay discrimination,” they argued.
Business groups, however, have opposed the requirement. “The EEOC’s pay-data collection rule creates another administrative burden for companies while raising questions about how the data will be used and analyzed,” said Brett Coburn, an attorney with Alston & Bird in Atlanta.
“Employers in today’s environment are acutely aware of the gender wage gap and recognize the importance of ensuring compliance with applicable federal and state requirements,” he said. “Without formal guidance on how the EEOC will assess and publish the data, the only certainty is that this new rule will create opportunities for litigation.”
Many feel that HR professionals can and should start preparing for expanded EEO-1 reporting now.
HR professionals should identify where employee pay and hour data are stored and begin gathering that information or figuring out how to extract it, he said.
Once all data is collected, employers should then tackle the task of filling out the actual form and may even want to check with vendors (i.e. HRIS or payroll vendors) to see if they can assist with the process.
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, but the data file specifications have not yet been released.