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.

Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Laura A. Mitchell Laura A. Mitchell

As co-leader of the firm’s ESG group, Laura Mitchell partners with her clients to evaluate, set, achieve and monitor their organizational culture and human capital goals. She focuses her practice on data analytics, including pay equity and other employee analytics, working side-by-side with…

As co-leader of the firm’s ESG group, Laura Mitchell partners with her clients to evaluate, set, achieve and monitor their organizational culture and human capital goals. She focuses her practice on data analytics, including pay equity and other employee analytics, working side-by-side with employers to build programs that benefit employees and create a stable, high-functioning workplace. Understanding that an inclusive, values-based culture provides a crucial competitive advantage in the modern workplace, Laura enjoys counseling companies on the development of proactive and equitable pay and diversity practices.

In Laura’s version of the reimagined workplace, attention to human capital issues, especially DEI and pay equity, would be the rule rather than the exception nationwide and she works with companies across all industries—both new and well-established multi-national organizations of all sizes—to realize this vision for her clients’ ongoing success. She helps clients understand all issues across the spectrum of their journey, helping to establish regular analyses as well as counseling organizations on implementation and compliance obligations, where applicable. Committed to putting her clients’ organizational goals first and foremost, Laura views herself as an extension of her clients’ team, responsible for providing proactive guidance and engaging in transparent, ongoing communication.

Laura also represents companies in OFCCP matters, preparing for and defending OFCCP audits, and counseling employers on issues stemming from OFCCP regulations. She personally oversees the development of hundreds of Affirmative Action Plans for clients each year and is intimately involved in the defense of OFCCP audits. Her approach to compliance is one of facilitation and conciliation while simultaneously advocating in the best interests of her clients.