Just like most headaches, the HR headache that is the EEO-1 Component 2 reporting obligation will be going away as the Equal Employment Opportunity Commission (EEOC) announced that it would not renew its request for authorization from the Office of Management and Budget to collect EEO-1 Component 2 pay data after the current authorization expires.
As the expiration of the current reporting obligation was September 30, 2019, the practical effect for covered employers (namely those with 100 or more employees) is that the burden of submitting this information will, therefore, be a one-time occurrence for this year alone.
The controversial measure had required employers to report on covered employees for a designated pay period into one of 12 pay bands and further report on these employees based upon their hours worked for the year. The requirement had proven to be really challenging according to members who provided feedback to us on the hotline about the struggles in accounting for the right type of compensation (namely Box 1 W-2 wages) in order to first make the classifications properly and then properly tabulating the hours worked of the covered incumbents as well.
To top this reporting off, covered employers also needed to do this twice for both 2017 and 2018 which, in essence, doubled the burden.
While the EEOC announcement comes as a welcome reprieve for employers, the news did not come as a surprise as the agency had attempted to stave off this reporting but had to cave to a court order that had compelled the agency to follow through on its obligations due to the initial authorization that had been granted under the previous administration.
All told, covered employers are glad to see September has come to an end.
For additional guidance with EEO-1 reporting and compliance, members are encouraged to call the HR Hotline at 877.662.6444.