Federal Judge Tanya Chutkan accepted the EEOC’s proposal, requiring employers to submit their 2018 pay data (Component 2 Data) to the EEOC by September 30, 2019.  According to several reports, the EEOC said it would open an online portal to start collecting the information from employers by July 15. However, at the time of writing this update the EEOC has not made available any information verifying this. The specifications and data requirements for collecting and reporting the Component 2 Pay Data are not available at this time. This latest court decision does not indicate whether pay data from 2017 will also be required; we expect additional information to become available in the upcoming weeks.

BackGround

The Equal Employment Opportunity Commission (EEOC) told a federal judge on April 3, 2019 that it was unable to collect pay data (also known as Component – 2 data) from employers by the EEO-1 filing deadline of May 31, 2019. The EEOC proposed that the agency could collect the pay data by September 30, 2019 for the 2018 period, if the agency can use private third party contractors to collect the data.

The EEOC also gave a warning of the risks of collecting both 2017 and 2018 pay data stating, “There is a serious risk the expedited data collection may yield poor quality data because of the limited quality control and quality assurance measures that would be implemented due to the expedited timeline.”

In February 2016, The EEOC announced a proposal to revise the EEO-1 reporting to include pay data in addition to the data already collected (Component-1 data. However, in August 2017 the Office of management and Budget (OMB) issued a stay on the pay data collection due to a number of concerns with the collection of the pay data.

In November 2017, supporters of the pay data collection filed a suit requesting that the stay be vacated. On March 4, 2018, the U.S. District Court for the District of Columbia vacated the stay of the revised EEO-1 form’s pay data reporting requirements.  

Employer Requirements

Employers with 100 or more employees and federal contractors with 50 or more employees and contract over $50,000 are required to collect and report Component-1 data (race, gender, ethnicity and job category) on the Employer Information Report, EEO-1 by the May 31, 2019 deadline. The current report does not include Pay Data information. The EEO-1 report is included in the Reports Library.

Next Steps

Paylocity will continue to monitor the court actions regarding the Component-2 Pay data collection and reporting requirements. Once the specifications are available, Paylocity will update our EEO-1 report to include the required Component 2 Pay Data information. We will provide updates as more information becomes available.

Thank you for choosing Paylocity as your Payroll Tax and Human Capital management partner.

This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.