The EEOC paused EEO-1 reporting last year due to the impact of the pandemic, but it will be due in July this year. Covered employers will be responsible for submitting 2019 and 2020 EEO-1 Component 1 data this summer. Employers should start preparing now. Additionally, some employers that were not subject to EEO-1 reporting requirements in 2020 may be this year. Here is a playbook from MP’s HR services experts. It will help employers determine if they need to complete an EEO-1 report, how they will stay in compliance as they complete it, and when they must finish by. This article will also cover what the consequences could be for employers that don’t meet their EEO-1 reporting requirements.
Who is subject to EEO-1 reporting requirements?
EEO-1 reporting, which measures racial, ethnic, and gender composition of a workforce, is filed with the EEOC. These employers are required to submit reporting annually:
- Businesses with at least 100 employees
- Federal contractors with at least 50 employees and a contractor of $50,000 or more
These employers are not subject to EEO-1 reporting:
- Private employers (no Federal contractors) with less than 100 employees
- Federal contractors with less than 50 employees
Payroll providers caution that some employers may not be required to complete an EEO-1 report one year, but then subject to it the next. Employers that grow—or lose employee count– should check their size against the requirements for reporting.
7 Best Practices for Maintaining Compliance with EEO-1 Reporting
Here are 7 key tips from MP’s HR consulting experts for reaching and maintaining compliance through this process.
- Determine whether you need to file an EEO-1 Report. If you answer ‘yes’ to any of the below questions you must file.
- Does the entire company (at all locations combined) have at least 100 employees?
- Is the company affiliated through common ownership and/or centralized management with other entities in an enterprise with a total employment of 100 or more?
- Does the company or any of its establishments hold a contract with the federal government worth $50,000 or more and have 50 or more employees?
- Is the company or any of its establishments a federal government contractor which serves as a depository of Government funds in any amount or a financial institution which is an issuing and paying agent for U.S. Savings Bonds and Savings Notes in any amount?
- Register as a first-time user, if necessary. Though it was formerly in paper and in digital format, the system is now completely digital. If an employer has never filed before, they can register on the same site with an easy-to-use form.
- Determine whether your organization is a single-establishment or a multi-establishment company. A single-establishment company only does business at one physical address. Multi-establishment companies on the other hand do business at two or more physical addresses. This differentiation will help determine which type of EEO-1 Component 1 data report(s) should be filed. Single establishments are only required to submit one report, while multi-establishments are required to submit the following:
- A separate report for the headquarters
- A separate report for each establishment of the company with 50 or more employees
- A separate report for each establishment with fewer than 50 employees
- A consolidated report that includes all employees
- Collect employee race/ethnicity and gender data via employee voluntary self-identification. To complete the report, employers must allow employees to voluntarily self-identify their ethnicity and gender. If the employee declines, then the employer can refer to their onboarding paperwork for that information. If an employee didn’t self-identify in their onboarding paperwork, as a last resort, the employer may use their own observation. Employers may choose to report employee counts for non-binary gender employees by job category and race/ethnicity in the comment box on the Certification Page in the online filing system. This data should be prefaced with the phrase “Additional Employee Data.”
- Assign job categories for all employees. The ten job categories for EEO-1 Component 1 data are based upon employee skill level, knowledge, and responsibilities. For more information surrounding job categories, please see the EEO-1 Component 1 Job Classification Guide.
- Complete your EEO-1 form and report on all employees. Even if employees are remote or part-time, they must be included. As mentioned above, if an employer doesn’t know an employee’s gender or ethnicity, they should allow the employee an opportunity to self-identify. If the employee declines, the employer can use their own visual observations to complete the report. Many payroll and HRIS software like MP have reporting functions to help generate the EEO-1 Report for clients. Check with your HR provider to see how they might be able to help automate this process.
- File your report online.
When is the deadline for EEO-1 reporting? Reporting is an annual task (Employers typically will be reporting on data for the preceding year, however due to COVID employers are required to file for the preceding 2 years in 2021.) This year, the EEOC has postponed reporting deadlines due to the pandemic. Reporting opened online on April 26th, 2021 and is due on Monday, July 19th, 2021. MP’s HR experts suggest that employers not leave this task to the last minute, as it can be very time-consuming for a larger workplace.
Four consequences for late, non-completion, or falsifying data on EEO-1 reporting:
- A court may compel an employer to complete EE01 reporting. This is backed up via Section 709 (c) of Title VII of the 1964 Civil Rights Act.
- For making a false statement on the form, which might include inflating the numbers of minorities in a workforce or checking the box to (falsely) identify itself as a federal contractor (and thus not in the OFCCP’s audit selection system database), an employer could incur a fine, up to five years imprisonment, or both.
- A more indirect penalty is that employers who don’t file an EEO-1 report lose credibility in a federal investigation or in an audit for OFCCP compliance.
- Non-federal contractors will be severely disadvantaged if they face an individual discrimination charge that is investigated by the EEOC or a state non-discrimination enforcement agency.
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