Dodge These Frequent EEO-1 Report Mistakes Before It's Too Late

June 1 extension gives employers chance to satisfy filing requirements

Allen Smith, J.D. By Allen Smith, J.D. May 14, 2018
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​Now that employers have until June 1 to complete EEO-1 reports, they have extra time to avoid filing mistakes—especially those that commonly arise following mergers and acquisitions or the closure of a location.

The Equal Employment Opportunity Commission (EEOC) was late in responding to e-mail requests for technical assistance on EEO-1 reports from companies that have been merged or acquired. Many of those establishments requested extensions beyond the original March 31 deadline. So the EEOC decided in April to extend the filing deadline to June 1 and added full-time staff to provide technical assistance, it noted in an e-mail to SHRM Online.

Mergers and Acquisitions

If an employer filed reports in a previous year under its own user ID and password but has since merged with another company or has been acquired, the new parent company must file EEO-1s and subsume the acquired company into its data, noted Alissa Horvitz, an attorney with Roffman Horvitz in McLean, Va.

The acquired company should notify the EEOC that it merged or was acquired, or the EEOC will still expect the employer to file an EEO-1 with the previously used user ID and password.

"The process is cumbersome because the employer must notify the EEOC of the organizational changes so that the EEOC can modify the system to reflect the changes," said Matthew Camardella, an attorney with Jackson Lewis in Long Island, N.Y. He said that, given the EEOC's lack of resources, there can be "significant delays to the completion of the EEO-1 reports."

"I have found the process incredibly slow, and those who do respond are not always able to understand some of the intricacies of corporate structures and restructuring," said Cheryl Behymer, an attorney with Fisher Phillips in Columbia, S.C.

An employer that has undergone an acquisition or merger needs to send an e-mail to E1.AcquisitionsMergers@EEOC.gov, said Larry Malfitano, an attorney with Bond, Schoeneck & King in Syracuse, N.Y. For a merger, the e-mail should include the names and company numbers, if known, of all the companies that merged; the name and address of the corporate headquarters; and the name of the new company. For an acquisition, the e-mail should include the names, addresses and company numbers of both the acquiring and acquired companies.

If there has been a spinoff since the last EEO-1 filing, an e-mail should be sent to E1.SPINOFFSSpinoffs@EEOC.GOVgov. The e-mail should include the name, address and company number of the current parent company, including identification of the new headquarters, and a list of all physical addresses for the new company, he noted.

If the employer filed last year and doesn't this year, expecting the acquiring company to do that, and fails to alert the EEOC about the merger or acquisition, the EEOC will wonder where the missing data is and generate a notice of violations, which takes time to answer, Horvitz said.

[SHRM members-only HR Q&A: Can you please explain the filing requirements for the EEO-1 form?]

Closed Locations

A mistake employers commonly make is including a closed establishment in their EEO-1 reports.

Don't include in your workforce "snapshot" any locations that were operating earlier in the year but are now closed, Malfitano noted. The EEOC's methodology is based on a snapshot of a payroll period in the last quarter of 2017, such as one ending Dec. 31. Consequently, the agency does not want to know if the employer had employees at a closed location earlier in the year if they are not employed on the date of the snapshot, he explained.

Since the EEO-1 filing system does not let the user complete the filing without updating each report included in the prior year's filing, the user must delete the establishment and identify the reason it closed, Camardella said.

If an employer fails to mark a location as closed, the EEOC expects data for it, Horvitz observed. If the employer does not mark a location from last year as closed and does not submit an employee count, the EEOC perceives there to be a mismatch, she cautioned.

When a closed establishment is included in an EEO-1 filing, this indicates that the company did not review its data closely before filing, which contradicts statements made when certifying EEO-1 filings, said Jay Patton, an attorney with Ogletree Deakins in Birmingham, Ala. 

Another practical problem is that the Office of Federal Contract Compliance Programs (OFCCP) relies on EEO-1 filings for conducting audits of government contractors. "If a closed establishment is selected for an OFCCP audit on the basis of a current EEO-1 filing, then the company will likely be in a difficult position before the audit even begins," he said.

 

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