In an effort to provide additional guidance to employers navigating the new Component 2 pay data filing requirements, the Equal Employment Opportunity Commission (EEOC) and NORC have just updated its frequently asked questions (FAQs) with respect to how employers experiencing mergers, acquisitions, and spinoffs during 2017 and 2018 should be filing their 2017 and 2018 Component 2 reports.  Additionally, the EEOC has included new information on filing obligations for Professional Employer Obligations (PEOs).   in addition to the website materials, we understand messages to the NORC HelpDesk are being returned promptly.

The new FAQs provide the following guidance:

Mergers & Acquisitions

Regarding mergers and acquisitions, the general expectation is – whether the event occurred before or after the employer’s selected 2017 workforce snapshot – the acquiring/new employer submit 2017 Component 2 data for the acquired subsidiary or the newly formed company.  In some instances, the company experiencing a merger or acquisition will not have access to the former company’s data.  If that is the case, the company should note this in the comments box under the certification section of the Component 2 online filing system.

Spinoffs

Where a company spins off from another in 2018, the spinoff company is not responsible for filing 2017 Component 2 data for its employees, as it was still affiliated with the former parent company at that time.  Instead, the former parent company would be responsible for filing 2017 Component 2 data for those employees, and the newly formed Company would be responsible for its 2018 Component 2 data.  Alternatively, parent companies selling a portion of their business in 2018 are not required to file 2017 and 2018 Component 2 data for those employees – that becomes the purchasing company’s obligation.  Again, should data access issues arise, companies are advised to note this in the online filing system.

PEOs

The EEOC has advised that a PEO is not responsible for filing Component 2 data of entities that are former clients at the time of filing.  Further, when a PEO and a client company’s contracting agreement does not include 100% of the covered client company’s employees, the covered client company – not the PEO – is responsible for filing Component 2 data.

 

We will continue to monitor and provide Component 2 updates as they become available.

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Photo of Laura A. Mitchell Laura A. Mitchell

Laura A. Mitchell is a Principal in the Denver, Colorado, office of Jackson Lewis P.C. She is a member of the firm’s Affirmative Action and OFCCP Defense practice group as well as the firm’s Pay Equity Resource Group. She is also on the leadership team for the firm’s Government Contractor Industry Group.

Her practice is focused on representing government and non-government contractors in OFCCP matters, preparing for and defending OFCCP audits, and counseling employers on issues stemming from OFCCP regulations. Ms. Mitchell personally oversees the development of hundreds of AAPs each year and is intimately involved in the defense of numerous OFCCP audits. She also spends significant time counseling companies in connection with conducting pay equity analyses as well as government contractor employment obligations.

Ms. Mitchell is the editor and a principal contributor of The Affirmative Action Law Advisor blog and frequently presents on pay equity, affirmative action compliance, OFCCP enforcement trends, and government contractor obligations.

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