Better Late Than Never? Have You Filed Your EEO-1 Component 2 (Pay Data) Forms Yet?

Are you a private-sector employer with 100 or more employees who is supposed to be filing EEO-1’s, but who has not yet filed EEO-1 Component 2 (Pay Data) forms for 2017 and 2018? If so, let me tell you a story . . .

Section 42 USC 2000e-8(c) part of Title VII of the Civil Rights Act of 1964, as amended, authorizes the EEOC to require employers to make certain reports, such as the EEO-1 report. It gives the EEOC strong power to obtain these reports: “If any person required to comply with the provisions of this subsection fails or refuses to do so, the United States district court for the district in which such person is found, resides, or transacts business, shall, . . . have jurisdiction to issue to such person an order requiring him to comply.” 

In 2016, the federal Office of Management and Budget approved an EEOC proposal for a three-year trial requiring certain Title VII-covered employers to submit compensation data as part of the EEO-1 data collection. Called “Component 2” of the EEO-1, it required submission of information on pay (as taken from W-2s) and hours worked, broken down by job category, race, sex and ethnicity. Only businesses with at least 100 employees were to be required to file Component 2 of the EEO-1 form. So those of you which are federal government contractors with 50 or more but less than 100 employees, only have to file Component 1 of the EEO-1.  

On August 29, 2017, the OMB initiated a review and stay of the EEOC’s collection of pay data under Component 2. This allowed employers to hope that they would never have to provide the onerous Component 2s.

Those hopes were dashed on April 25, 2019, when U.S. District Court Judge Tanya S. Chutkan vacated the OMB’s stay and ordered the EEOC to collect the detailed pay data for calendar year 2018. Judge Chutkan set the deadline for the EEOC’s collection of this data for May 31, 2019, but she later extended it to September 30, 2019. Judge Chutkan further directed that the data collection "will not be deemed complete … until the percentage of EEO-1 reporters that have submitted their required EEO-1 Component 2 reports equals or exceeds the mean percentage of EEO-1 reporters that actually submitted EEO-1 reports in each of the past four reporting years." 

While the EEOC appealed Judge Chutkan’s decision, it also proceeded with the data collection, indicating that it would be requiring pay data for 2017 as well as for 2018.  (Judge’s orders should not be ignored absent a stay, and the EEOC did not request and had not obtained a stay from Judge Chutkan’s order.)

In a status report to the federal court on September 27, 2019, the EEOC announced it would be keeping the portal open indefinitely because based on its projections, the minimum required reporting percentage that had been set by the court would not be met by the September 30, 2019, deadline. In summary, employers were not submitting the reports as required. On September 27, 2019, the EEOC reported that about 39.7% of those expected to file had submitted reports.

After the September 30, 2019 deadline had passed, the EEOC announced that the filing percentages required by the judicial order had been met by last-minute filers.  Specifically, by the EEOC’s calculations, filings reached 81.1% for 2017 and 81.5% for 2018. The EEOC believed that both of those percentages exceeded the mean percentages identified by the judge. The EEOC filed a motion with Judge Chutkan asking for her confirmation that the standard she had established had been satisfied such that the EEOC would be permitted to discontinue collection efforts, that data collection was complete.    

In tandem with that action, the EEOC announced that, consistent with its practices regarding late filing for EEO-1 Component 1 reports, the EEOC would keep its Component 2 data collection portal open for six weeks, or through November 11, 2019. 

On October 29, 2019, Judge Chutkan denied the EEOC’s motion, ruling that the EEOC may not discontinue its pay data collection efforts on November 11, 2019.  She noted that her initial order instructed the EEOC to calculate the percentages “based on ‘reporters that actually submitted EEO-1 reports.’” She continued that her measure of “actually submitted” was predicated on the EEOC’s past practice of permitting reports to be filed late. “Actually submitted” was not the same as “timely submitted.” While not providing a bright line percentage, the October 29, 2019 Order indicated that the court’s expectation for filing could be as high as 98.3% of required filers. 

Judge Chutkan directed the EEOC to, “continue to take all steps necessary to complete the EEO-1 Component 2 data collection for calendar years 2017 and 2018 by January 31, 2020”; she further directed that a status report be submitted to her on or before February 7, 2020. 

Pretend you’re the lawyer advising the EEOC and you believe that on January 31, 2020, your client (the EEOC) will not have received the percentage of EEO-1 Component 2 reports sought by the judge. The judge is going to measure your client’s actions against the standard of, “take all steps necessary.” What additional steps might you advise your client to take today to enable your client to assert a good faith effort on January 31, 2020? Circling back to the second paragraph of this post, would you recommend that the EEOC seek injunctions in federal court against non-filers, as it is authorized to do by statute? 

If you are an employer who has not yet filed the EEO-1 Component 2, you may wish to consult legal counsel competent in EEO-1 law sooner rather than later.