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New Guidance on EEO-1 Component 2 Data Submissions For Companies Involved in Corporate Transactions

The Equal Employment Opportunity Commission (EEOC) has released additional guidance regarding the new EEO-1 Component 2 data reporting requirements for employers who were involved in mergers, acquisitions and spinoffs in 2017 and 2018. As we previously reported, employers must report their Component 2 pay and hours worked data for calendar years 2017 and 2018 by September 30, 2019.

In its guidance, EEOC advises, among other things, that acquiring companies are responsible for submitting Component 2 data of their acquired entity – whether the transaction occurred before or after the acquiring company’s workforce snapshot period. Similarly, where two companies merge to form a new entity, the new entity must report its Component 2 data, regardless of whether the merger occurred before or after the workforce snapshot period. Where a purchasing or newly formed company does not have access to a former entity’s Component 2 data, they should note that in the comments box on the certification page in the EEO-1 online portal. For acquisitions closing in 2018, an acquiring company would not be required to report the 2017 Component 2 data of a purchased company, if the purchased company would not have been obligated to report its own 2017 Component 2 data (i.e., if it had less than 100 employees in 2017).

With respect to spinoffs occurring in 2018, newly created subsidiaries are not responsible for reporting their 2017 Component 2 data. The former parent company, however, would be responsible for filing the 2017 Component 2 data for the employees of the spun off company. Parent companies that sold a part of their business in 2018 are not required to file the 2017 or 2018 Component 2 Data for the sold entity – the purchasing company has that responsibility.

The EEOC has also provided guidance for Professional Employer Organizations (PEOs). A PEO is not responsible for filing Component 2 data of entities that are former clients at the time of filing. When an agreement between a PEO and a client company does not cover 100% of the client’s workforce, the client company, not the PEO, must submit the Component 2 data.

Employers that have undergone mergers, acquisitions or spinoffs in 2017 and 2018 should consult the FAQs to determine their reporting requirements. We will continue to monitor and provide updates as they become available.

© 2019 Proskauer Rose LLP.

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About this Author

Guy Brenner, Labor Attorney, Proskauer Rose, arbitration proceedings Lawyer
Partner

Guy Brenner is a partner in the Labor & Employment Law Department and co-head of the Non-Compete & Trade Secrets Group. He has extensive experience representing employers in both single-plaintiff and class action matters, as well as in arbitration proceedings. He also regularly assists federal government contractors with the many special employment-related compliance challenges they face.

Guy represents employers in all aspects of employment and labor litigation and counseling, with an emphasis on non-compete and trade secrets issues,...

202-416-6830
Kate Gold Labor and Employment Lawyer Proskauer
Partner

Kate Gold is a partner in the Labor & Employment Law Department in the Los Angeles office.

Kate has over 25 years of experience representing clients in a range of industries, across all areas of employment law.  An experienced litigator, she has represented clients in all types of employment-related suits, including class and collective actions, discrimination, retaliation and harassment, non-compete and wage/hour matters.  In addition to litigating, she conducts high-level workplace investigations and routinely counsels clients on matters involving the full range of state and federal employment issues.

Kate also represents clients in disputes involving  misappropriation of intellectual property and trade secrets, interference with contract, and unfair competition. Kate also counsels on classification of employees, employment issues in the context of purchase and sale of businesses, and non-competition agreements. Additionally, she negotiates and drafts executive employment and separation agreements and conducts training on sexual harassment prevention.

Kate received her B.A. and J.D. from the University of California, Berkeley.

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Law, Jordan Simon, Labor, Employment
Associate

Jordan Simon is an associate in the Labor & Employment Law Department.  

Prior to joining Proskauer, Jordan attended Cardozo School of Law and served as an associate editor of the Cardozo Law Review and as a senior editor of the Alternative Dispute Resolution Honor Society. While in law school, he interned in the Civil Division of the U.S. Attorney’s Office for the Eastern District of New York.

212-969-3568