Panicked Over EEO-1 Rulings?

By Lehr Middlebrooks Vreeland & Thompson, P.C.

May 29, 2019

This article was prepared by JW Furman, EEO Consultant Investigator, Mediator and Arbitrator for the law firm of Lehr Middlebrooks Vreeland & Thompson, P.C. Prior to working with the firm, Ms. Furman was a Mediator and Investigator for 17 years with the Birmingham District Office of the U.S. Equal Employment Opportunity Commission (EEOC). Ms. Furman has also served as an Arbitrator and Hearing Officer in labor and employment matters. Ms. Furman can be reached at 205.323.9275.

I hope that everyone who is required to file an EEO-1 report has filed Component 1 (the original demographic data you have filed for years) by now. Although the government shutdown pushed back the dates for submitting the information this year, everyone knew it would have to be done. The EEOC announced in February that Component 1 reports would be accepted through May 31 of this year. What we did not know until this month was that EEOC would call for Component 2 (pay and hours worked data) for both 2017 and 2018 by September 30.

Not expecting these developments? Not prepared to report this information so soon? You are not alone. EEOC was not expecting or prepared to receive this information either. The agency had to hire a contractor to collect Component 2 data for them and has now appealed the court order requiring them to collect this data. However, filing an appeal does not automatically stay the lower court’s ruling. While we expect that the EEOC will file a motion requesting a stay until the appeal is resolved, it has not yet done so. In the meantime, most employers with more than 100 employees are scrambling to gather two years of wage information.

What happens if a stay is not granted and you simply cannot compile the required data for submission by September 30? EEOC will usually grant short extensions for information it requests. In this case, there will have to be a fixed date for extensions because the electronic portal for accepting EEO-1 reports closes on a fixed date.

In the event that either component of the EEO-1 is not filed as required, the EEOC can seek a court order compelling completion of the report. While there are no provisions for penalties (monetary or otherwise), litigation of any kind can be quite expensive. If such an order is granted and an employer still does not comply, it could be held in contempt, which does carry penalties. I cannot say EEOC would do this now with respect to Component 2 data since it seems to no longer want the pay data it originally requested permission to collect. However, the change in administration and government priorities is what precipitated this lawsuit over Component 2 and the next election could provide more changes.

The EEO-1 report requires certification of accuracy and truthfulness. The law does provide for monetary penalties and possible imprisonment for “the making of willfully false statements on Report EEO-1.” Punishable false statements are not limited to the actual numbers in the body of the report. They also include those first page questions, such as total number of employees and establishments, common ownership with another employer, and government contractor status.

Under any administration, the most likely consequences of failing to file an EEO-1 report come when being investigated by the EEOC or audited by the OFCCP. If either finds that an employer has failed to comply with the law or falsified their report, the employer loses credibility. That negative impression can impact the entire process with either agency. Developing a reputation for hiding or falsifying information also can influence or even prompt future investigations and audits. It is especially important for government contractors to realize that failure to comply with legal obligations can result in suspension or debarment.