Wednesday, April 12, 2023: EEOC Vice Chair Samuels & Commissioner Sonderling Told DEAMcon23 Attendees that EEO-1 Component 2 Survey Will Soon Return
Vice Chair Samuels made national news announcing coming new Pregnancy Act Rules
DE Executive Director Candee Chambers served as “the bipartisan middle” to facilitate an insightful “Fireside Chat” (complete with a burning wood fireplace screen image) with Equal Employment Opportunity Commission (“EEOC”) Vice Chair Jocelyn Samuels (Democrat) and Commissioner Keith E. Sonderling (Republican) on the first day of DEAMcon23 in Chicago. (The DirectEmployers Annual Meeting of Member Companies and those from the public is abbreviated as DEAMcon followed by the year date: i.e., DEAMcon23). Both Commissioners spoke as though the return of EEO-1 Survey Component 2 “Hours Worked and Pay Data” reporting requirement for covered employers (in some form) is inevitable. They also both stated explicitly that they want the public to have a robust notice and comment opportunity for any such proposed requirement.
“I am personally committed and I know that the Chair [Charlotte A. Burrows] is as well, to ensuring that we do something that gives everyone the real opportunity for informed public comment. So, that will take place,” Samuels said.
“And you can be assured that I will be screaming for notice and comment through formal rulemaking if we engage in a [Component 2 pay data collection],” Sonderling interjected. [See below for a further discussion of this point.]
How We Got Here
With the 5-Member bi-partisan Commission likely to soon have a majority of Democrats [see more details discussed below], it appears that the then fully-filled Commission will seek to implement (over the dissenting votes of both Republican Commissioners) a new EEO-1 Component 2 pay reporting requirement. (See our story here for background on Component 2 data collection). [Note also that Sonderling told the DEAMcon22 audience to expect its return.]
In July 2022, the National Academies of Sciences, Engineering, and Medicine (NASEM) issued a report (“NASEM report”) evaluating the quality of the limited-run EEO-1 Survey Component 2 data collection for reporting years 2017-2018. The EEOC commissioned the study by a unanimous vote in 2020. “[We commissioned the study] to take a look at the data that we collected to tell us whether it was useful for evaluating the existence of pay discrimination and enabling us to fulfill our enforcement responsibilities,” Samuels explained during the discussion on Wednesday.
Our story detailing the report is here, including how the five EEOC Commissioners sitting at the time responded with notably different takes. “Keith may have a different view [than I] about how to read this report,” Samuels intoned with great understatement.
In our July 2022 story, we reported that the expert panel assigned to conduct the study found that the Component 2 “data as collected have value” as they are unique among federal surveys by providing employee pay, occupation, and demographic data at the employer level. Samuels focused much of her remarks on these aspects of the findings.
However, the panel recommended that “the value be strengthened by both short-term and longer-term improvements in respondent coverage, data collection protocols, measurement implementation, and conceptual coverage.” Shortly after the report’s release, the expert panel behind the report held a webinar expanding on their views. Among other things, the panel noted that although collecting these types of data has some value, the collection instrument used in 2017-2018 had a flawed design and measurement issues and that the data needed “cleaning.” The panel also emphasized that the EEOC should look to other agencies for examples of how to move forward.
“We had suggestions about how to improve pay data collection if we adopt a new instrument, and we’re looking very closely at those,” Samuels reported.
Commissioners Committed to Public Comment Opportunity
Chambers asked the question on everyone’s mind – prior to adopting any new instrument, will the Commission submit its Component 2 pay data reporting proposal for public notice and comment procedures in accordance with the Administrative Procedure Act and thereafter to the White House Office of Management and Budget (“OMB”) for Paperwork Reduction Act approval?
“If in fact we move forward with pay data collection – and that will be of course subject to a vote of the commission – […] there will be robust opportunities for public comment,” Samuels assured the audience. “And we really will want to hear from all of you,” she continued. “Because our goal at the end of the day is, if we adopt this kind of an instrument, to ensure that it is probative in ways that can be useful to all of you to identify disparities that bear further investigation. But also, to make it as minimally burdensome as possible. And you are the people on the ground who can help to educate us about how we can meet those goals. So, this is a continuing dialogue. I’m sure you will hear more from us. But I really look forward to continuing to discuss it.”
Chambers pointed out that under President Biden’s recent “Modernizing Regulatory Review” Executive Order, the economic threshold for a “significant regulatory action” subject to “rigorous” regulatory cost-benefit analyses increased to those actions that have an annual effect on the economy of $200 million or more – up from the previous $100 million. (Note also that the threshold will be adjusted for GDP growth every three years.) Therefore, Candee asked whether the estimated burden for an upcoming Component 2 proposal would meet this new threshold.
“[The NASEM report] suggested that it would be less burdensome for employers to produce individualized data, anonymized of course,” Samuels pointed out. She added: “[w]e want to hear from you. Is that true? Is that correct? Then what steps can we take so that we can address any concerns about our ability to keep the information confidential because we understand that this is sensitive proprietary information. And we want to make sure that we put safeguards in place so that we can respect appropriate confidentiality protections and not in any way create competitive disadvantages as a result of collecting this data. So, you have a wealth of information that can be really helpful to us as we go through this process.”
As noted above, Sonderling emphasized that he would advocate for a formal rule-making process. “I’ll be pushing for a formal Notice of Proposed Rulemaking [published in the Federal Register], he stated.
Don’t Wait to Look at Your Pay Data, Sonderling Advised
“I’m not prejudging anything that the EEOC is going to do or doing related to [a future Component 2 collection],” Sonderling noted. He added: “[b]ut my own personal opinion is for all of you as employers out there you don’t need the federal government collecting your private payroll information, taking that valuable information for you to be able to address this issue internally. You could be doing this through pay equity audits and looking at your payroll in advance of any enforcement or any pay data collection. And I think that is really important not to lose sight of.” “You don’t have to wait to see what Washington, D.C. will do about collecting your private payroll information,” he advised. “You could be doing that now because it is illegal to discriminate in pay as in many other areas.”
He continued, “Component 2 pay data collection will be up for debate like it was before and we will see where it goes. But for now, look at this issue. It is in our strategic enforcement plan. You’re seeing a lot at the state level. And a lot gets confused into the pay transparency issue that is being dealt with across the country. […] Right now, these laws apply. And you can be looking at your own payroll data before the EEOC potentially looks at it.”
Commission Composition – Present and Future
While the Commission has seats for five Members leading it – three for the party currently in the White House, and two for the opposition party – it currently has only two members from each party. On March 28, 2023, the U.S. Senate Committee on Health, Education, Labor, and Pensions (“HELP”) Committee voted to advance the nomination of Kalpana Kotagal to fill the fifth slot. If (and likely when) the full Senate votes to approve the Kotagal nomination, Democrats will, for the first time in the Biden Administration, have a 3-2 voting majority on the Commission.
Samuels described the confirmation process as “kind of Byzantine.” Sonderling reported that it took 14 months for the Senate to confirm his nomination. “Our hope is that she will be considered expeditiously by the full Senate, perhaps as soon as this month,” Samuels said.
“I think that the Commission operates best when we are at full strength,” Samuels remarked. “We work better when we benefit from the perspectives of five really experienced thoughtful people.”
It’s not unheard of to have empty seats on the Commission, Sonderling pointed out, noting that September 2020 marked the first time since 2016 that all five slots were filled. Moreover, “[i]t was the first time there were three Republicans since 2008,” he observed. He further explained that all Commissioner terms end on July 1 in staggered year appointments (one either rolls off every year or is reconfirmed), but a Commissioner may stay through the end of December [or until the Senate confirms a replacement, whichever comes first].
Chambers pointed out that Commission Chair Charlotte Burrows’ term expires on July 1, 2023. In the event that Biden does not renominate Chair Burrows, and Ms. Kotagal is sworn in as a Commissioner, would Vice Chair Samuels be elevated to the position of Chair, Chambers inquired. “That decision is up to President Biden,” Sonderling responded.
Pregnant Workers Fairness Act Proposed Regulations on the Way
The Pregnant Workers Fairness Act (“PWFA”) passed earlier this year had bipartisan support and is “a win-win for employers and employees,” Samuels said. (Read our story on the law here.) She observed that it is “the first new civil rights law that has been passed in the employment space since the ADA Amendments Act back in 2008.”
“The PWFA will take effect June 27, 2023, and the statute provides that the EEOC must issue finalized regulations to implement it by December 29, 2023,” Samuels reported. “So, working backward, my hope is that we will be able to get out a proposed regulation very shortly within a matter of weeks or months,” Samuels stated. This timing will allow for “a robust opportunity for public comment. And then the time to consider those comments as we finalize the rule,” she explained.
“I really do encourage you to weigh in with us to identify the things that you think we should provide more information about or the questions that you have,” she said. “Of course, applause and praise for the proposed regulation that we issue [is] always welcome,” she joked.
What is behind the PWFA?
The PWFA is closely modeled on Title I of the Americans With Disabilities Act of 1990 (“ADA”). The new law – for the first time – requires accommodations for pregnant employees due solely to their pregnancy unrelated to an underlying medical condition. It requires employers with 15 or more employees to provide such accommodations unless it would pose an undue hardship to the employer. The definition of “undue hardship” under the PWFA is the same as the ADA’s definition, Samuels pointed out. “But to the extent that there are questions about what the scope of the obligation is or what undue hardship means, first thing, you’ve got this. You’re already doing it with regard to your employees with disabilities,” she told the audience.
The PWFA fills a gap that had existed in the laws, she explained. “Under Title VII, before [the PWFA], pregnant women could get accommodations, but only if they could identify [non-pregnant] “comparators” [i.e., “similarly situated coworkers” getting a similar accommodation already],” she explained. Samuels continued: “[T]hat comparative standard meant that many people who had real limitations created by pregnancy or a related condition could not get accommodations in the workplace.
Under the ADA, Samuels explained, you have to be a qualified individual with a disability. And most pregnancies, if they are normal, routine pregnancies, do not create disabilities that entitle the pregnant woman to an accommodation under the ADA. “So, there was this vast number of people in the workplace who were often having to choose between doing their jobs and having healthy pregnancies or taking care of themselves. And that is what the [PWFA] was designed to correct.”
“The reason this got bipartisan support and the reason we have a new law for the first time since 2008 [was that there] are pretty significant stories about pregnant workers not being able to take bathroom breaks, not being able to take water breaks,” Sonderling noted. Some employers were already providing such accommodations before, he added, “but now it is required under law.”
Noting the law’s effective date, Samuels advised the audience to “make sure your policies anticipate that the same things you do for [workers with disabilities] are the same things you do for pregnant workers.”
Sonderling Pled for Comments on Specific Industry Impacts
During the public notice and comment period on the upcoming proposed PWFA regulations, it will be “important to hear from you because you’re all in different industries and you all have different needs and may have different questions of how this is going to apply,” Sonderling told the audience. “You have been dealing with the different types of accommodations for years,” he continued. “Tell us how this is going to affect your specific industry so we can address those and give you examples moving forward.”
Lookout for More Action on Artificial Intelligence
“Artificial Intelligence (“AI”) is one of the biggest – if not the biggest – issues facing HR departments,” Sonderling observed. He started off his comments on the topic by giving “a shameless plug” to the recent DE Employment Law Roundtable he participated in on “How to Test Whether the AI You Are Using for Employment Selections Is Lawful.” (The link to this Roundtable is available in DE’s Member-Only portal, “DE Connect.”) “You have two hours of content with DirectEmployers about this topic,” he said. He also noted that he discussed the topic during his keynote address at DEAMcon22.
What’s Been Happening with AI?
We reported in January that the EEOC held a virtual meeting on navigating AI, and the Republican Commissioners expressed frustration over the limited perspectives featured in the choice of panelists. That hearing was held in conjunction with the agency’s AI and Algorithmic Fairness Initiative. That initiative is intended to ensure that the use of software, including AI and other emerging technologies used in hiring and other employment decisions, complies with the federal civil rights laws that the EEOC enforces.
“[I]t is no longer a question [if AI is going to be] in the workplace,” Sonderling said, but rather how an HR practitioner is going to use it, for what purposes, and how do they “comply with the long-standing civil rights laws that apply to [employment] decisions.”
“Ultimately, you will be liable for whatever happens, whatever decision these algorithms or machine learnings or whatever buzzword you want to use related to technology, you bear the liability. That’s how our laws work,” Sonderling cautioned.
“[A]the end of the day, whether it is the AI making the decision or combination of a human making the decision, there will be an employment decision and there will be results. And that’s what we’re going to look at the EEOC,” Sonderling said.
The potential issues with AI in the workplace “are well documented at this point,” he continued. However, “using AI in a sense can actually help us [get to transparency behind employment decisions …]. In short, it can be used to help us with our investigations on transparency [with employers] saying, ‘here are the non-biased metrics we put in’ […]. AI [can] actually help not only eliminate bias but help us with our investigations as well.”
What is Coming Up for AI in the Workplace & the EEOC
Sonderling also told the audience to “be on the lookout’’ because the Commission is “going to be doing more in this space”, especially with the advent of ChatGPT and how that will be used in HR, particularly as to job descriptions.
Noting that she utilized ChatGPT to help write her opening statement for the January 2023 EEOC hearing, Samuels also said “we will be putting out more material on this as we all learn more about how to effectively use these new technologies without running afoul of the EEO laws.”
“There are already a lot of resources out there,” she continued. Among other resources, she noted the White House’s Office of Science and Technology Policy’s Blueprint for an AI Bill of Rights (see our story here), and the National Institute of Standards and Technology’s AI Risk Management Framework (see our stories here and here). While the Commission is not endorsing them, “the more you can consult these kinds of materials, the better educated you will be about the kinds of analyses you need to be doing in order to stay out of trouble,” Samuels said.