EEOC Announces EEO-1 Component 2 Pay Data Collection WON’T Be Renewed

Yesterday, September 11, 2019, the EEOC announced that it will not seek to renew collection of EEO-1 Component 2 Data for 2019, 2020, and 2021. This does not impact employer’s current EEO-1 obligations to file Component 2 Data due on September 30, 2019.

In the publication the EEOC admitted that its 2016 methodology to calculate the burden to employers in completing EEO-1 reports (including component 2) was flawed. The EEOC now estimates that the total annual burden hour costs for employers and contractors to complete both Components 1 and 2 is $614,391,388 for 2017 and $622,015,798 for 2018, as opposed to the previous estimate of $53,546,359.08 per year. There are no typos in those numbers, the new estimate accounts for more than ten times the annual burden that had previously been estimated.

The EEOC notes that it “must balance the utility of the data to its enforcement programs against the burden the data collection as structured imposes on the employers who must submit it.” Accordingly, the EEOC concluded “it should consider the information from the ongoing Component 2 data collection before deciding whether to submit a pay data collection to OMB. At this point in time, the unproven utility to its enforcement program of the pay data as defined in the 2016 Component 2 is far outweighed by the burden imposed on employers that must comply with the reporting obligation. Therefore, the EEOC is not seeking to renew Component 2 of the EEO-1.”

What does this mean for you?

1. If you are an employer or federal contractor and you have more than 100 employees, you must file the Component 2 compensation data for 2017 and 2018 by September 30, 2019. Yesterday’s announcement does not change this filing requirement.
2. As of today, an employer or federal contractor with more than 100 employees will not have to file Component 2 compensation data for a 2019 snapshot period (or a 2020 or 2021 snapshot period).

For questions concerning EEO-1 Filings, whether Component 1 or 2, contact a member of Verrill’s Employment and Labor Practice Group.