Having just submitted your company’s tax returns for 2023—no easy feat as a cannabis business—you may be hoping for a break from regulatory filings. If your business has 100 or more employees, however, you may need to assemble 2023 data for an entirely different purpose as another federal filing deadline looms in June of 2024.
The Equal Employment Opportunity Commission (EEOC), the federal agency that enforces workplace anti-discrimination and anti-harassment laws, requires private employers that had 100 employees in the fourth calendar quarter of 2023 (October 1- December 31) to file an EEO-1 Component 1 report. The report consists of specific workforce data, including job titles and sex, race and ethnicity demographics.
Because many cannabis businesses have only recently seen their headcounts grow beyond 100 employees, this federal requirement may be unfamiliar to many employers in the cannabis industry. The EEOC’s 2023 EEO-1 Component 1 Instruction Booklet is a helpful resource for cannabis businesses navigating the requirement, particularly as first-time filers.
Below we answer some frequent asked questions about the EEO-1 Component 1 filing:
When may EEO-1 reports be filed?
The EEOC’s electronic filing portal for 2023 EEO-1 reports opens on April 30, 2024 and closes on June 4, 2024.
How do I know if I satisfy the 100-employee threshold?
In calculating your headcount for EEO-1 purposes, you must include all employees for whom you withheld social security taxes, regardless of full-time or part-time status. Non-employee personnel, such as independent contractors, do not count.
Cannabis employers involved in a merger, acquisition or spin-off in 2023 may need to consider which entity is responsible for submitting the 2023 EEO-1 report, as the EEOC’s Instruction Booklet explains.
How do I determine if I am a single establishment or multi-establishment filer?
The EEOC has different EEO-1 filing requirements for single vs. multi-establishment employers. Whereas a single establishment employer need only file one EEO-1 Component 1 report, multi-establishment employers must file three types of reports: (1) a Consolidated Report, (2) a Headquarters Report and (3) Establishment-Level Report(s).
The EEOC defines an “establishment” as a single physical location from which a company conducts business. A business operating from different locations generally must file an EEO-1 report for each location, even if it conducts the same type of business at each location. For example, a cannabis retailer with multiple dispensary locations generally needs to file an EEO-1 report as to each dispensary as a multi-establishment employer.
What is my NAICS code?
In the 2023 EEO-1 report, a covered employer must identify the NAICS code applicable to its business. NAICS codes specific to the cannabis industry include 111419 (for cannabis grown under cover), 111998 (for cannabis grown in an open field), 424590 (for cannabis merchant wholesalers) and 459991 (for retail dispensaries, medical or recreational). Employers in the cannabis space also may fall under other NAICS codes not specific to the cannabis industry.
How does the EEOC use the information?
The EEOC uses the data from employers’ filed EEO-1 repots for multiple purposes, including to assess trends in workforce demographics and to investigate allegations of employment discrimination. The EEOC treats EEO-1 data as confidential information.
Large cannabis businesses ought to take steps now to determine if they are required to file an EEO-1 Component 1 report for 2023 and if so, to gather the necessary workforce data well in advance of the June 4, 2024 filing deadline.