Ensuring EEO-1 Compliance: A Guide for Employers

In the current climate where enforcement of workplace discrimination claims is at an all-time high, understanding how to decrease your legal vulnerability is vital. For organizations with a workforce numbering 100 and above, one of the critical steps towards ensuring adherence to Equal Employment Opportunity (EEO) laws is the annual lodgment of the EEO-1 report. Beyond the mandate for employers to stay compliant, recent adjustments to regulations have introduced additional layers of complexity. Thankfully, organizations can find assistance through specialized HR services and technologies. Below is an essential guide on maintaining EEO-1 compliance and steering clear of violations.

What is Form EEO-1 and what is it used for?

The EEO-1 report is a tool used by the Equal Employment Opportunity Commission (EEOC) to collect demographic data on a workforce to investigate and prevent employment discrimination. In essence, companies with 100 or more employees, or federal contractors with at least 50 employees and at least $50,000 in contracts, are obligated to file this form annually. It’s designed to detail the racial, gender, and ethnic composition of a company’s workforce in Component 1, along with compensation data in Component 2, with samples viewable on the EEOC website. The requisite data must reflect the workforce’s composition during the last quarter of the calendar year, covering all employees employed during the selected pay period of the fourth quarter, inclusive of remote employees. Submission of these reports is facilitated online through the EEOC’s dedicated filing system, with the 2023 data collection period spanning from April 30, 2024, to June 4, 2024.

What organizations are required to fill out an EEO-1 form?

Private sector employers with a workforce of 100 or more during the designated snapshot pay period in the fourth quarter are mandated to file an EEO-1 report. This requirement slightly varies for multi-establishment companies, which must submit separate data for their headquarters and each location, in contrast to single-establishment employers who submit one comprehensive EEO-1 Component 1 report. Should a private employer with less than 100 employees be affiliated or under common ownership with another entity, prompting the combined workforce to exceed 100 employees during the snapshot period, they too must file. Federal contractors or subcontractors meeting specific criteria as laid out by the OFCCP regarding employee counts, contracts, and financial thresholds must also comply.

The Office of Federal Contract Compliance Programs (OFCCP) mandates EEO-1 filing for contractors meeting any of the following four criteria:

1. Those not covered by an exemption under § 60-1.5;24 of the regulations;
2. Organizations employing 50 or more personnel;
3. Entities acting as prime contractors or occupying the role of first-tier subcontractors; and
4. Holders of contracts, subcontracts, or purchase orders exceeding $50,000, entities entrusted with any amount of Government funds, or financial institutions engaged as issuance and payment agents for U.S. savings bonds and notes. It’s stipulated that subcontractors not at the primary level engaged in on-site construction activities are also obligated to submit this report, provided they satisfy the conditions laid out in points (1), (2), and (4).

Moreover, employers with one or more employees or contractors in California must comply with California Pay Data Reporting, as mandated by state law for private employers with 100 or more employees or using 100 or more workers from labor contractors, to submit annual reports on pay, demographics, and other workforce information to the Civil Rights Department (CRD). Additional information is accessible via the CRD’s official website.

Have there been recent changes to EEO-1 form reporting?

The EEOC introduced significant updates to the EEO-1 form reporting process in 2024, incorporating a new non-binary gender option and specific guidelines for remote workers. Additionally, the new EEO-1 form mandates the use of Unique Entity IDs (UEI) instead of Data Universal Numbering System (DUNS) numbers for federal contractors. As a result, there are necessary alterations to the data file upload specifications, which can be found here.

Are there any misconceptions about EEO reporting?

A common misunderstanding among employers is the belief that they can submit their forms after the data collection period has ended, during the so-called “Failure to File” phase. This is incorrect.

Employers who do not submit their EEO-1 report by the end of the grace period are not allowed to submit them in subsequent reporting cycles and will be considered non-compliant. For example, failing to submit a 2023 EEO-1 report means you cannot submit that report during the 2024 EEO-1 data collection cycle.

What are the consequences of inaccurate or non-filing of EEO-1 forms?

There are significant consequences for both failing to file an EEO-1 report and submitting an inaccurate one. If you miss the published due date, you will receive a “Notice of Failure to File” prompting you to submit your report as soon as possible and no later than the “Failure to File” deadline. Failure to comply by this final deadline may result in being compelled by court order. Federal contractors or subcontractors face the risk of contract termination and potential bans from future contracts. For willful inaccuracies, employers can be subject to fines and/or imprisonment.

If your company has previously filed an EEO-1 form but now no longer meets the reporting eligibility requirements, it is essential that you certify your company’s ineligibility on the EEOC’s online filing website. This certification ensures compliance and avoids unnecessary penalties.

What are the best practices to ensure compliance with EEO reporting?

Employers must provide the EEOC with data on employee gender, ethnicity, nationality, and race. This information is gathered on a voluntary basis from employees. Companies are advised to use clear and transparent language when requesting this information to ensure employees understand how their data will be used. Additionally, demographic information should be kept separate from other employee records. Should an employee choose not to disclose their demographics, the employer is obliged to complete the information for them through visual observation and include them in the report.

Another key component of EEO-1 reporting involves assigning employees to specific job categories. Best practices recommend utilizing the Job Classification Guide to assist in this process, rather than depending solely on job titles. It is important to consider the required skills, training, and job responsibilities when making these assignments. For employees who have dual roles within the company, they should be categorized based on the job they spend most of their time performing.