Employment & Labor Alert
(by Stephen Antonelli and Alexandra Farone)
In May 2019, we issued a Client Alert after the U.S. District Court for the District of Columbia ordered the EEOC to collect employers’ pay and hours worked data (commonly referred to as “Component 2 Data”) from certain employers. Specifically, the Court ordered the EEOC to collect such data from employer-selected pay periods during the years 2017 and 2018.
We issue this follow-up Client Alert because, by September 30, 2019, all employers with at least 100 employees are required to collect and submit Component 2 Data for a “workforce snapshot period” as selected by the employer for the reporting years 2017 and 2018.
The mandate for employers to collect Component 2 Data is the subject of an ongoing federal lawsuit. The Department of Justice has appealed the court order, but the requirement to comply and produce the data by September 30, 2019 remains in full force and effect during the pendency of the appeal.
The EEOC portal website through which employers can submit information can be found at: https://eeoccomp2.norc.org/.
Employers should keep the following steps in mind when preparing to produce Component 2 Data:
- Identify an appropriate workforce snapshot period—one pay period—for each reporting year.
- Gather, sort, and verify the relevant Component 2 Data including employees’ race/ethnicity, sex, W-2 payroll information, and hours worked.
- Provide actual hours worked by employees who are not exempt under the Fair Labor Standards Act (FLSA). For employees who are exempt from the FLSA, employers can provide either proxy hours or actual hours worked.
- Determine the number of full- and part-time employees pursuant to each of the 10 EEO-1 job categories.
- Identify the number of employees who fall within each of the 12 compensation bands for each of the EEO-1 job categories. Employers must use Box 1 of an employee’s IRS Form W-2 to determine the appropriate compensation band to which each employee will be assigned.
- Tally the number of employees in each compensation band and job category by race/ethnicity and sex.
- Calculate the total number of hours worked (by race/ethnicity and sex) for the total number of employees who fall within the same compensation band for each job category. “Hours worked” should not include paid leave time such as PTO, holidays, or vacation days.
- Decide whether to manually enter the data in an online form, or to create a separate data file for upload. Data file specifications have been released by the EEOC, and employers opting to create a data file are encouraged to develop the files in advance to ensure accurate and timely compliance.
Babst Calland’s Employment and Labor Group can assist employers that are subject to this regulation by helping them with selecting an appropriate workforce snapshot period, organizing and categorizing employees’ data, creating a compliant data upload file for submission, and navigating the nuances of this data collection. For more information about what is required and how Babst Calland can assist you, please contact Stephen A. Antonelli (412) 394-5668 or santonelli@babstcalland.com, or Alexandra G. Farone at (412) 394-6521 or afarone@babstcalland.com.
For the PDF, click here.
