Are You Ready for the Return of EEOC Census Reports?
Data collection from employers isn't new. The Equal Employment Opportunity Commission (EEOC) has been harvesting employment-related information for a long time. The last year employers had to file the EEO-1 report was for 2018, which was due in 2019. Now that the EEOC is returning to a more normal staffing level, companies that are required to report census data will need to file an EEO-1 report for 2019 and for 2020 (due by July 19, 2021). It's been a while since you filed these reports, so you might need a refresher course.
Which Employers Are Required to File?
The first step is determining whether you need to file a EEO-1 report. Your employee count may have changed enough from two years ago that you're no longer required to file (though you'll still need to notify the EEOC of your changed status). Or you may need to fill out a report for the first time.
For private employers, if you have 100 or more employees during the subject year, you need to file. (For companies doing business with the federal government, the threshold is 50 or more employees.) If you're an affiliate of a parent organization, the parent has the filing responsibility.
Filing Nuts and Bolts
If you're new to the EEO-1 report, this legal requirement has been in place since 1966 — two years after the enactment of the Civil Rights Act of 1964. What's somewhat new is that the filing is now all electronic, so you'll need to set up an online account with the EEOC. You can either submit the report directly into a secure EEOC portal or simply upload the data.
The information you report must be based on your employee census for a particular "workforce snapshot pay period" during any of the final three months of the year. The pay period is whatever you use for payroll (for example, weekly, every two weeks or bimonthly).
This means that if your headcount was below 100 before October, but rose above it in the 4th quarter, you'd be required to file the EEO-1. Also, you can pick a different 4th-quarter snapshot pay period for each year's report.
Which employees need to be counted? You must count both full and part-time, including those who work from their homes. Also, even if an employee left your company after the snapshot pay period, that employee must still be counted for the census.
Breaking Down the Details
The employee census data requires you to group employees by gender, ethnicity and job category. In addition to the employee census data, you'll need to provide not only your EIN, but also your North American Industry Classification System (NAICS) Code and Dun & Bradstreet (D-U-N-S) Number.
The EEOC employer Q&A website breaks down some of the variables you might deal with in collecting data. Here are three examples:
Employees are requested to self-identify their race/ethnic classification; however, doing so is voluntary. What if an employee declines to state his or her ethnicity? The EEOC allows the use of existing employment records or observer identification. However, data obtained from someone other than the employee should be kept separate from the employee's regular personnel file.
Employees are asked to report their gender, but some workers may list gender as "nonbinary." How does the EEOC recommend the employer record that data? In that situation, employers are instructed to write "additional employee data" with an explanation in the comment box of the certification section of the online form.
Employers are expected to identify jobs on the EEO-1 based on a list of nine job categories: first/mid-level officials and managers, professionals, technicians, sales workers, administrative support workers, craft workers, operatives, laborers and helpers, and service workers. What if some jobs in your company don't fit easily into a category? Employers may consult the EEOC's 32-page job classification guide with scores of examples of job titles and the broader classification they fall under.
More answers will be provided by the EEOC as new questions arise.
Why Bother to Report?
Many employers wonder, "What are the legal consequences of failing to fill out these forms?" If you're caught, the federal regulations state that you "may be compelled to file by order of a U.S. District Court." While penalties aren't specifically stipulated and the chances of being caught if you don't run into any other compliance problems may be relatively small, following the rules may have important benefits.
You won't have to worry about being the rare example of a company that gets caught flouting the rules, especially if you're a small business. However, completing the reports gives you a chance to look at your workforce from the perspective of an employee who might be inclined to file a discrimination case against you.
If there are clear patterns that hint at illegal employment discrimination (intentional or otherwise), it's better to proactively address the situation than to wait until you are sued.
Also, if you do face an employment discrimination lawsuit and haven't filed EEO-1 reports, your credibility in defending yourself may be seriously compromised.
EEOC.gov offers more details about filing exceptions for the EEO-1. The deadline is still weeks away. But don't put off collecting the data, especially if you'll have employees taking time off in the summer months. If you still have questions, contact us today!
We are committed to being your most trusted Business Advisor. We view every client like a partnership, and truly believe our success is a result of your success! We assist clients with accounting, tax preparation and financial advising in the Bryan and Navasota, Texas, area. Interested in working with us? Fill out a new client inquiry here.