New PEO EEO-1 filing procedures – if and when the portal is opened

PEO EEO-1 filing

Ordinarily, an employer with 100 or more employees (and federal contractors with 50 or more employees) must file an annual EEO-1 report with the Equal Employment Opportunity Commission (EEOC), typically by the end of the following March as 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). The primary purpose of the EEO-1 report is for a covered employer to provide the EEOC with data by establishment location, gender, race/ethnicity and job category.

Professional employer organizations (PEOs) have historically assisted client companies with the EEO-1 report filing. In many cases, PEOs tasked with filing the EEO-1 report are captive to client cooperation and certain data in order to timely file the report, putting additional pressure on the PEO. While a client company meets the criteria for the filing the PEO would take responsibility for the filing by assuming such responsibility in their client agreements. Specifically, PEOs were filing a single, aggregate report for eligible client employers as an “establishment” of the PEO.

In early February 2022, the EEOC changed the EEO-1 reporting procedures for PEOs. Other types of organizations subject to this charge are administrative services organizations (ASOs), human resource outsourcing organizations (HROs), and other similar organizations (what the EEOC calls “third-party human resource organizations”). This change greatly impacted how a PEO may file the EEO-1 report for its clients. As the EEOC noted in its Fact Sheet, “[t]hese services can include preparing and filing the employer’s (i.e., company’s) EEO-1 Component 1 report(s) on the employer’s (i.e., company’s) behalf.”
Here are the new procedures for a PEO to file a client EEO-1 report:

• Each client company must have its own employer identification number for the PEO to sue for the filing. The PEO client company must register and have an individual-level user account to access the EEO-1 Component 1 Online Filing System.
• After the client company sets up its registration, it may invite the PEO to create an associated user account to enable the PEO to file the EEO-1 Component 1 Report on behalf of the client company.
• The PEO will not be allowed to file an EEO-1 Component 1 Report that includes itself and the client company and/or a report that includes multiple client employers (as establishments) as was the practice in the past.
• The PEO cannot certify a client company’s EEO-1 Component 1 Report or serve as the client employer’s “certifying official.”

Note the 2022 EEO-1 filing deadline has been extended several times from the typical March deadline. As of now, the following is posted on the EEOC’s Data Collection website: “The EEOC is currently completing a mandatory, three-year renewal of the EEO-1 Component 1 data collection by the Office of Management and Budget (OMB) under the Paperwork Reduction Act (PRA). Accordingly, the EEOC has updated the tentative opening of the 2022 EEO-1 Component 1 data collection to the Fall of 2023. All updates about the 2022 EEO-1 Component 1 data collection, including the final opening date and opening of the Filer Support Message Center, will be posted to www.eeocdata.org/eeo1 as they become available.”

In addition, it appears that the EEOC is looking to restore a submission known as EEO-1 Component 2. The EEOC’s receipt of Component 2 data from employers was intended to help address pay disparity for women and minorities.

A quick history: the EEOC attempted to expand the EEO-1 reporting by including an obligation for employers to provide compensation data (i.e, Component 2); however, after legal challenges, the EEOC rescinded the Component 2 reporting obligation, partially because it grossly underestimated the time and burden on employers in compiling the compensation data. Ultimately, the EEOC announced that employers would have to report Component 2 data from 2017 and 2018 payrolls by Sept. 30, 2019 – but not thereafter. PEOs in particular would have been burdened by a continued obligation to report Component 2, as many PEOs assist clients with EEO-1 filings. Given that the EEOC has changed how PEOs can now file EEO-1 reports for clients, it seems that Component 2 would be less of a burden, as clients must be more engaged in the filing process.

We also do not know when the Component 2 will be reinstated in the EEO-1 report. The EEOC has said that it will seek public comments and will likely use the Federal rulemaking process, so it is highly unlikely that a Component 2 would be required for the 2022 EEO-1 filing.

To learn more about this legal topic and how your PEO business can operate in total compliance, contact Gordon Berger directly or visit the FisherBroyles website here.