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EEO-1 Reports Are Coming… Are You Ready?

26 Jun

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(A Comprehensive Guide for EEO-1 Reporting)

Although EEO-1 reporting has been an annual requirement for many years now, we wanted to provide employers with an all-in-one resource related specifically to the subject.

The EEO-1 report is a mandatory annual data collection that requires certain private sector employers and federal contractors to submit demographic workforce data, including data by race/ethnicity, sex, and job categories. Employers meeting the reporting thresholds have a legal obligation to submit annual workforce data on their employees by race/ethnicity, sex and job category. The data includes seven race and ethnicity categories and 10 job categories. EEO-1 Component 1 data is used by the EEOC to investigate charges of employment discrimination against employers and to provide information about the employment status of minorities and women. The data is collected using the reports described in this guide and is used for a variety of purposes, including enforcement, self-assessment by employers, and research. Each of the reports collects data about gender and race/ethnicity by some type of job grouping. This information is shared with other authorized federal agencies to avoid duplicate collection of data and reduce the burden placed on employers. Although the data is confidential, aggregated data is available to the public.  (Source Link)

Deadline for 2023

The 2022 EEO-1 Report is due during the data collection period currently scheduled to open mid-July 2023. Updates regarding the 2022 EEO-1 Component 1 Data Collection, including the opening date, will be posted to www.eeocdata.org/eeo1 as they become available. (Source Link)

If the preparation or filing of an EEO-1 report would create an undue hardship for an employer, it can apply to the EEOC for an exemption or an alternative reporting method in writing prior to the filing deadline for the report. 

How to File (Link)

Employers can complete the EEO-1 Reports through the new online filing system. The online form is entirely web-based, so there is no software to download or install. Whenever possible, the filing system will pre-fill information from the previous year to speed up data entry. The new system also allows the employer to access up to 10 years of EEO data for its own establishment. For EEO-3EEO-4 and EEO-5 Reports, employers can visit the website for filing instructions at EEO Data Collection, as this may change from year to year.

What are the options for submitting the EEO-1 Component 1 Report?

The preferred and most efficient method of submitting EEO-1 Component 1 Reports is through the EEO-1 Component 1 Online Filing System or as an electronically transmitted data file (TEXT or CSV) via a data file upload. The filer support page on the website also includes data file upload instruction similar to those provided in previous years.

For a summary of the data employers will need to collect, please see the fact sheets on Preparing Data – Single-Establishment, or Preparing Data – Multi-Establishment

New Company Online Registration:

  • All filers must have a registered account in the EEO-1 Component 1 Online Filing System (OFS) to access company records and/or file their EEO-1 Component 1 Report(s). (LINK)
  • Companies that are eligible to file the EEO-1 Component 1 Report must register their company in the EEO-1 Component 1 Online Filing System (OFS) if they have never filed or have not filed in the past five (5) years. 

New Users of the EEO-1 Component 1 Online Filing System:

New users will be required to create an individual user account to access the EEO-1 Component 1 Online Filing System (OFS). This can be done by visiting https://eeocdata.org/eeo1/signin and selecting Create an Account.

Who Needs to Report

  1. All private employers who are:
  1. (1) subject to Title VII of the Civil Rights Act of 1964, as amended, with 100 or more employees EXCLUDING State and local governments, public primary and secondary school systems, institutions of higher education, American Indian or Alaska Native tribes, and tax-exempt private membership clubs other than labor organizations;

— OR —

  • (2) subject to Title VII who have fewer than 100 employees if the company is owned or affiliated with another company, or there is centralized ownership, control or management (such as central control of personnel policies and labor relations) so that the group legally constitutes a single enterprise, and the entire enterprise employs a total of 100 or more employees.
  • All federal contractors who:
  1. (1) are not exempt as provided for by 41 CFR 60-1.5;
    1. (2) have 50 or more employees;
    1. (3) are prime contractors or first tier subcontractors;

— AND —

  • (4) have a contract, subcontract, or purchase order amounting to $50,000 or more; or serve as depositories of Government funds in any amount; or are financial institutions which are issuing and paying agents for U.S. Savings Bonds and savings notes. (Source Link)

The filing by eligible employers of the EEO-1 Component 1 Report is required under section 709(c) of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e-8(c), and 29 CFR 1602.7-.14 and 41 CFR 60-1.7(a). There is a common misconception that only federal contractors are subject to EEO-1 reporting requirements. However, the scope of EEO-1 report is far more reaching. Employers who meet the following criteria are required to file the EEO-1 report annually

Workforce Data That Needs To Be Reported

According to the EEOC, employee self-identification, especially as to race and ethnicity information, is ideal. However, where an employee declines to self-identify, employment records or observer identification may be used instead. The EEOC has a designated list of race and ethnicity categories that employers should be mindful of when collecting this information from their workforce. The categories include:

  • Hispanic or Latino
  • White
  • Black or African American
  • Asian
  • American Indian or Alaska Native
  • Two or more races

Establishing a Snapshot Period

The workforce snapshot pay period is a single pay period, selected by the employer, within the last quarter to count employees for the EEO-1 Component 1 filing. Examples of pay periods are: weekly, every two weeks, twice a month, etc. As for which workforce snapshot pay period (i.e., pay period) you should use to extract EEO-1 Component 1 employment data, the data must be pulled from one pay period in October, November or December of the current data collection year. This is referred to as the workforce snapshot pay period.

Which employees must be included in the report?

Employers are required to report employees who were employed during the selected workforce snapshot pay period even if they were no longer active employees by December 31 of the data collection year. Even if an employee resigned or was terminated before December 31 of that year, the employee must be reported if the employee was employed during the selected workforce snapshot pay period.

Also, both full-time and part-time employees must be included in EEO-1 Component 1 reporting.

Note: the EEO-1 Component 1 Report does not require data on applicants who were not hired or employed during the selected workforce snapshot pay period. It only requires data on current employees during the selected workforce snapshot pay period.

FAQs

Establishments

What is an establishment?

An establishment is generally a single physical location where business is conducted or where services or industrial operations are performed. Units or offices at different physical locations, even though engaged in the same kind of business operation, must be reported as separate establishments.

For businesses involving physically dispersed individual activities (construction, transportation, communications, electric, gas, and sanitary services, oil and gas fields, etc.), it is only necessary to report individual sites if they are treated as separate legal entities. For these locations, the establishment for these employees is the location: 

a. Directly responsible for supervising dispersed activities; 

b. Or, the base from which personnel and equipment operate to carry out these activities (Where these dispersed activities cross State lines, at least one such establishment should be listed for each State involved.) 

What if you have a multi-establishment company?

Depending on whether your business is a single-establishment company or a multi-establishment company, it could lead to filing various types of reports. A single-establishment company is required to submit only one EEO-1 Component 1 Report:

  • Type 1 Single – Establishment Report (Type 1 Report): A company conducting business at only one establishment is permitted to complete and submit one EEO-1 Component 1 Report (i.e., Single – Establishment Report (“Type 1 Report”). The Type 1 Report must include data for all the company’s employees categorized by race/ethnicity, sex, and job category.

On the other hand, a multi-establishment company (which operates from several locations, branches, or franchises) is required to submit several types which could include: 

  • Type 2 Consolidated Report (Type 2 Report): All multi-establishment companies must submit a Type 2 Consolidated Report. The Type 2 Report must include data for all employees of the company (i.e., all employees at headquarters as well as all establishments) categorized by race/ethnicity, sex, and job category.  
  • Type 3 Headquarters Report (Type 3 Report): All multi-establishment companies must submit a Type 3 Headquarters Report. The Type 3 Headquarters Report must include data for all employees working at the main office site (i.e., headquarters) of the company, as well as any remote employees who report to the company’s headquarters categorized by race/ethnicity, sex, and job category. A Type 3 Report must be submitted even if there are fewer than 50 employees working at and/or reporting to the headquarters location. 
  • Type 4 Establishment Report (Type 4 Report): All multi-establishment companies with establishments with 50 or more employees must submit a Type 4 Establishment Report(s). A Type 4 Report must be submitted for each establishment with 50 or more employees. The Type 4 Report must include employee data for each establishment categorized by race/ethnicity, sex, and job category.  
  • Type 8 Establishment Report (Type 8 Report): All multi-establishment companies with establishments with fewer than 50 employees must submit a Type 8 Establishment Report(s). A Type 8 Report must be submitted for each establishment with fewer than 50 employees. The Type 8 Report must include employee data for each establishment categorized by race/ethnicity, sex, and job category.  

(Source Link)

Note: employers often question whether they need to file if their company or establishment has less than 100 employees but is associated with other company(s) or a parent company where the entire enterprise employs a total of 100 or more employees. If an establishment is affiliated through common ownership and/or centralized management with other entities in an enterprise with a total employment of 100 or more, the common ownership headquarters must file the EEO-1 Component 1 Report. The headquarters or parent company must file for all its subsidiaries and establishments/locations.

My company has several establishments that are located at the same address. Do we submit separate reports for each entity?  

If the establishments that are located at the same address AND have the same North American Industry Classification System (NAICS) code and the same EIN, the establishments MUST be combined into only one report. These are considered one establishment for EEO-1 Component 1 Reporting. 

If my organization has a different (i.e., separate) EIN than my parent company’s corporate headquarters, should I file my EEO-1 Component 1 Reports separately?  

No. Your parent company’s corporate headquarters is responsible for filing EEO-1 Component 1 Reports for your company as well as any other commonly owned, controlled, managed or affiliated subsidiaries/holdings. 

Locations:

What if my company’s headquarters is a holding company with zero employees, is it still necessary to file?

If a holding company and its holdings meet the filing requirements, the holding company must file on behalf of all associated companies and establishments.        

Do employers report establishments or locations that are outside of the U.S.?  

No. Companies should not include establishments or locations that are outside of the 50 United States or the District of Columbia. No reports should be filed for establishments in Puerto Rico, the Virgin Islands or other American Protectorates.

How do employers report employees if the company is foreign-owned?

For companies that are foreign-based without a US-based headquarters, each subsidiary or holding within the U.S. must file its own EEO-1 Component 1 Report. In this instance, one subsidiary may take responsibility for filing for all company entities in the U.S., but the companies are not required to file jointly. However, if there is an established U.S.-based headquarters, the headquarters is responsible for filing for all subsidiaries/holdings in the U.S.

What about remote workers and client sites?

When it comes time to file their EEO-1s, employers are often confused about establishment locations, especially if their employees travel to client-owned locations for work such as when a contractor travels to a construction site or a janitor travels to a cleaning location. Do you list the employee at the client-owned site? Employers have the option to either a) report employees working at client sites using the client site address as the location of the establishment, or b) report those employees at a non-client site employer address.

As for remote workers, the process is a little more straightforward—employees who work remotely (i.e., telework) must be included in the EEO-1 Component 1 Report for the establishment to which they report.  The EEOC has said that under no circumstances should an employee’s home address be reported on any EEO-1 report.

Point of Contact and Business Details for Filing:

The company point of contact has changed since the last data collection. How does a company update a point of contact? 

Previously, you could navigate to the EEOC’s filer support page and select the ‘Contact Us’ form to submit updated contact information. In the request, an employer would include the following information: 

a. Company Name

b. EIN

c. New Contact Name

d. New Contact Email

e. New Contact Phone Number 

f. Whether this replaces or adds to existing contacts

g. New Mailing Address (if applicable)

That form is not currently available on the new page. You may email the EEOC at e1.techassistance@eeoc.gov.

Can companies include more than one point of contact to receive all communications?

Yes. Companies can include more than one person as the point of contact. Companies can also add additional contacts.  

What will you need?

  • Company ID and unique PIN (provided via U.S. postal mail and email for 2019/2020 filers or at registration for new filers)
  • Company EIN and NAICS code
  • Company DUNS Number (if a federal contractor)
  • Establishment address, EIN, and NAICS code, for each establishment
  • Establishment DUNS number (if a federal contractor)
  • Count of all full- and part-time employees during the specified workforce snapshot pay period selected by the employer
  • Sex and race/ethnicity of all employees
  • Job categories of all employees

What is the significance of the EIN identification number? 

The EIN is assigned by the IRS and is used to identify business entities. Filers must identify the employer identification number (EIN) for each company establishment that has a different address and/or NAICS code. Companies will be required to provide an EIN for each establishment location when filing the EEO-1 Component 1 annual report. 

What is the appropriate NAICS code? 

The North American Industry Classification System (NAICS) code is based on the standardized classification system which groups establishments by primary business activity. Each employer establishment should have an appropriate NAICS code. NAICS codes are updated by the U.S. Office of Management and Budget (OMB) every five years. To identify the correct NAICS code for each establishment, visit: https://www.naics.com/search/

What if my company does business under multiple NAICS codes, do multiple EEO-1 Component 1 Reports need to be filed?  

EEO-1 Component 1 Reports are based on physical locations. If the one location has multiple NAICS codes, the filer must use the NAICS code under which the greatest number of employees operate.

How do I classify employees into the job categories listed in the EEO-1 Component 1 Report?

The EEO-1 Component 1 job categories are based on employee skill level, knowledge, and responsibilities. They are designed to reflect common company hierarchies. Employers should select the category which best reflects the job function performed by each employee. 

For help, please see the EEO-1 Component 1 Job Classification Guide that maps Standard Occupational Classifications (SOC), occupational titles and 3-digit Census Job Codes to the EEO-1 Component 1 Job Categories.

Detailed descriptions of the job classifications can also be found in the Instruction Booklet.

How do I classify employees into the job categories listed in the EEO-1 Component 1 Report?

The EEO-1 Component 1 job categories are based on employee skill level, knowledge, and responsibilities. They are designed to reflect common company hierarchies. Employers should select the category which best reflects the job function performed by each employee. 

For help, please see the EEO-1 Component 1 Job Classification Guide that maps Standard Occupational Classifications (SOC), occupational titles and 3-digit Census Job Codes to the EEO-1 Component 1 Job Categories.

Detailed descriptions of the job classifications can also be found in the Instruction Booklet.

Identifying Race, Ethnicity and Gender:

How do we determine an employee’s race and/or ethnicity? 

Self-identification is the preferred method of identifying race and ethnic information necessary for the EEO-1 Component 1 Report.  Employers are required to attempt to allow employees to use self-identification to complete the EEO-1 Component 1 Report. As to the method of collecting data, the basic principles for ethnic and racial self-identification for purposes of the EEO-1 Component 1 Report are: 

(1) offer employees the opportunity to self-identify;

(2) provide a statement about the voluntary nature of this inquiry for employees. 

What if employees decline to self-identify their race and/or ethnicity? 

Self-identification is the preferred method of identifying race and ethnicity information necessary for the EEO-1 Component 1 Report. Employers are required to attempt to allow employees to use self-identification to complete the EEO-1 Component 1 Report. However, if employees decline to self-identity their race and/or ethnicity, employment records or observer identification may be used. Where records are maintained, it is recommended that they be kept separately from the employee’s basic personnel file or other records available to those responsible for personnel decisions.

How do we report non-binary gender selections?

Employers are also required to provide gender/sex data by an employee’s job category. Although the EEOC added an “X” gender marker as a component of the charge intake process last year, there is no current equivalent for EEO-1 reporting of non-binary individuals. Employers who seek to include this information can do so using the remarks section of the EEO-1 report. Employers are required to retain a copy of the most recent EEO-1 report filed at each reporting unit in the event the EEOC requests this information from the employer. (Source: Link)

Filers may report employee counts and labor hours for non-binary gender employees by job category and pay band and racial group in the comment box on the Certification Page, please preface this data with the phrase “Additional Employee Data:”. For example, “Additional Employee Data: 1 non-binary gender employee working 2,040 hours in Job Category 4, Salary Pay Band 5, Race/ethnicity non-Hispanic White. 3 non-binary gender employees; combined work hours 5,775; in Job Category 5, Salary Pay Band 8; Race/ethnicity: Employee 1 – Non-Hispanic Black, Employee 2 – Hispanic, Employee 3 – Two or more races”. In other words, you are now permitted (but not required) to add additional information in the comment dialogue box on the electronic EEO-1 report portal to explain if any of your workers identify as non-binary. (Source: Link 1, Link 2, Link 3)

Liabilities:

What are the risks and liabilities related to non-compliance?

Covered employers need to be ready to file their EEO-1 reports in mid-July 2023 because the EEOC only provides approximately one month for upload of the EEO-1 Component 1 data. If a covered employer fails to timely upload its data, the EEOC has the power to seek a court order to obtain compliance. For federal contractors or subcontractors, penalties for non-compliance could include the termination of their contracts and debarment from future contracts. Making willfully false statements on EEO-1 reports is a violation of federal law which is punishable by a fine or imprisonment under the law.

Important Reminders

  • Companies must file the 2022 EEO-1 Component 1 Report if they were in business and meet the filing requirements for that year.
  • Companies that have organizational changes that occurred since their last filing due to acquisitions, mergers, and/or spinoffs are required to report this change in the EEO-1 Component 1 Online Filing System (OFS) before proceeding with filing.
  • Save a PDF copy of your company’s EEO-1 Component 1 Report as soon as the report has been submitted and certified.

What happened to Component 2? (Link)

It is important to keep your eyes peeled this year as to whether employers will have file Component 2 in their EEO-1 reports next time around. Last year, Equal Employment Opportunity Commission Commissioner Keith Sonderling announced the potential return of Component 2. In fact, his exact words were, “Watch out, it is coming.” The announcement caught some organizations off guard since the Component 2 requirement had been previously discontinued. This additional component takes employee pay reporting to a new level, requiring more detailed information than Component 1.

  • The purpose of EEO-1 Component 2 was to help the U.S. Equal Employment Opportunity Commission and the Office of Federal Contract Compliance Programs (OFCCP) better understand and identify potential pay disparities and discrimination across different demographic groups. By analyzing this data, these agencies aimed to enforce federal laws prohibiting pay discrimination based on race, ethnicity, and gender and promote equal pay practices in the workplace.
  • It expands the requirements of Component 1 by requiring employers to submit more detailed information about workers, such as:
  1. A breakdown of hours worked.
    1. Pay information from Box 1 of employee W-2s (also by ethnicity, race, and sex)
      1. Component 2 also asks employers to allow employees to self-identify their race, ethnicity, and gender. If an employee declines to self-identify, the employer may use the information that the employee provided when they were first hired. Visual observation should be a last resort.

By requiring the disclosure of more detailed information, potential representation and discrimination issues will become more transparent and investigation may ensue.

  • Component 2 requirements of EEO-1 were in effect from 2017-2018 but were discontinued under the Trump Administration in 2019.

Employers should stay on the alert for a definitive announcement.

Additional Information and Resources:

  1. Equal Pay Audit (Employers who are interested in conducting their own pay audit may visit the following)
  • 2021 EEO-1 Component 1 Data Collection Instruction Booklet (Link) – it is currently unknown when the EEOC will release the new 2022 document, but the majority of the content in this booklet is still applicable.
  • EEOC Contacts (Link)

Unresolved questions about difficult assignments may be directed to the EEO-1 Coordinator in the Program Research and Surveys Division, EEOC, at 866-286-6440 (toll-free), (202) 663-7185 (fax), or e1.techassistance@eeoc.gov.

General Information (Link)

1-800-669-4000/ 1-800-669-6820 (TTY) / 1-844-234-5122 (ASL Video Phone)

EEOC Email: info@eeoc.gov

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This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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