EEO-1 Component 2 Updates: What You Need to Know about Current and Future Data Collections

What a week! For those that have been along for the EEO-1 Component 2 ride since the March 4th decision to reinstate EEOC’s pay data collection, and especially for those reading the tea leaves to predict what comes next, last week was quite the week. Most significantly, we learned that EEOC is seeking approval to renew the “Component 1” data collection it has required since 1966, without renewal of the “Component 2” W-2 earnings and hours worked data. This request was published in the Federal Register on September 12, 2019.

As current OMB approval for EEO-1 data collection is set to expire on September 30, 2019, EEOC is seeking, in accordance with the Paperwork Reduction Act (PRA), a three-year approval to collect the standard EEO-1 data collection (for years 2019, 2020, 2021). Notably, EEOC is requesting that this data collection is under a new control number to differentiate it from the current approved form. Please note, this recent Notice of Information Collection Request (ICR) in no way affects the obligation for employers to submit 2017 and 2018 Component 2 data by September 30, 2019. As a reminder, “2019 data” will be filed in quarter one of 2020 by employers.

Looking Forward

As outlined by EEOC, a factor in the decision to abandon Component 2 data collection is based on a revised burden calculation, which estimates the burden to be 12 times greater than the original estimate calculated in 2016. The main difference in burden calculations lies with the multiplier used – the original assessment analyzed burden at the employer level, rather than the report level, which resulted in great underestimation of burden for multi-establishment employers. Although the new calculation also increases the estimated burden of Component 1 data, EEOC believes the “proven utility of Component 1 to EEOC's mission justifies its continued collection”, but does not ask for this same renewal for the collection of W-2 earnings and hours worked. As outlined in the ICR, EEOC reports “it should consider information from the ongoing Component 2 data collection before deciding whether to submit a pay data collection to OMB” and the “unproven utility” defined in 2016 is “far outweighed by the burden imposed on employers”. The burden for Component 2, of course, is magnified by the 2100% increase in data fields per report.

We first learned of the ICR in the most recent status report, filed one week ago on September 6th. Fortunately, employers only needed to wait a few business days for this information collection to be posted in the Federal Registrar. The ICR will be open for comment until November 12, 2019.

Looking Back (to 2017 and 2018)

Not to complicate an already complicated situation, but do not forget that there is an appeal currently in process challenging the March 4th decision by Judge Chutkan to reinstate the Component 2 pay data collection. The Department of Justice, on behalf of EEOC, has challenged whether plaintiffs had standing to bring the lawsuit originally, as well as whether Judge Chutkan overreached in her authority. Although we will not know the outcome for some time, recall that part of Judge Chutkan’s decision was to extend the approval of the Component 2 data collection until April 5, 2021, well beyond the September 30, 2019 current expiration, due to lost time imposed by the OMB stay. Pending the decision reached in this appeal, there is uncertainty for when the current approved form to collect Component 2 data will expire.  This factored in to EEOC’s decision to request a new OMB control number for the data collection noted above. As stated in the request, “EEOC believes a new OMB control number for Component 1 that is separate from the current control number for the Component 2 collection will minimize confusion for EEO-1 filers”.

Additionally, at the risk of sounding repetitive, this appeal also does not change the requirement for employers to file the 2017 and 2018 Component 2 filing by the deadline of September 30th. As reported in the September 6th update to the court, only 13.4% of eligible filers have submitted their Component 2 filing to date.  EEOC will be begin reaching out by phone to the approximately 37,000 employers for which they have not at least established contact through: (1) employer contact with NORC, (2) registered access to the online portal, or (3) submitted data. As a reminder, EEOC is required per the April 25th decision, to keep the EEO-1 Component 2 portal open until at least the average number of historical filings (or more) have been received. Last month, EEOC estimated this to be 72.7% of eligible employers. As someone who knows that many employers historically do not file until the last weeks before the filing deadline, it is not surprising that only 13% of employers have completed the filing, especially given that the file specifications and resources were not released until July and August of this year with periodic updates.

Stayed tuned as we get closer to the September 30, 2019 filing deadline and beyond.

By Amanda Bowman, Associate Principal Consultant at DCI Consulting Group

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