White House Postpones EEO-1 Pay Data Initiative Indefinitely

by Buchanan Ingersoll & Rooney PC
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Buchanan Ingersoll & Rooney PC

On August 29, 2017, the White House Office of Information and Regulatory Affairs (OIRA), a division of the Office of Management and Budget (OMB), notified the U.S. Equal Employment Opportunity Commission (EEOC) via memorandum that it was immediately and indefinitely staying the pay data collection aspects (or Component 2) of the revised EEO-1 Report form. A copy of the OIRA memorandum can be found here. The purpose of the stay is to allow the OIRA to review the effectiveness and appropriateness of the EEO-1 revisions under the Paperwork Reduction Act (PRA). The OIRA indicated that multiple issues with Component 2 should be addressed during the review and stay, including the practical utility and potential burdensomeness of the contemplated data collection.

The EEOC has traditionally required certain covered employers and federal contractors to submit EEO-1 reports delineating their workforce by race, ethnicity and gender. In September 2016, the EEOC announced approval of a revised EEO-1 form that required private employers and federal contractors with 100 or more employees to supplement the forgoing Component 1 data with Component 2 summary employee wage and hour information. The EEOC indicated that the new wage and hour data would help it address potential discriminatory compensation practices, and established March 31, 2018 as the deadline to comply with the new reporting requirements.

The OMB originally approved the EEOC’s proposed EEO-1 revisions in 2016, but it has since identified several areas of concern leading to the current stay. For example, the OIRA noted that the EEOC released a data file containing specifications for employers to use in submitting EEO-1 data that were not contained in Federal Register notices published during the public comment process, or outlined in the supportive statement for collection of information. Additionally, the OIRA highlighted that the EEOC’s burden estimates did not account for use of the commission’s data file specifications and, therefore, could be inaccurate. Finally, the OIRA expressed concern that the EEOC’s collection of wage and hour data could be contrary to the standards of the PRA.

While OIRA’s stay of Component 2 reporting is a welcome sign for employers, the specter remains. As part of its review process, OIRA is requiring the EEOC to submit a new information collection package for the EEO-1 form for the OMB’s review. This could result in, among other things, the EEOC providing updated burden estimates to justify the revised EEO-1 form, submitting some other proposed variation of pay data collection, or withdraw the EEO-1 revisions in their entirety.

The EEOC has indicated that it will publish a notice in the Federal Register very soon that will outline employers’ reporting obligations under existing EEO-1 requirements and provide technical assistance. In a statement on the matter, Acting Chair Victoria Lipnic reaffirmed the EEOC’s commitment to strong enforcement of federal equal pay laws and noted that the OIRA’s decision to suspend Component 2 reporting would not alter the EEOC’s enforcement efforts. The EEOC has further advised that covered employers and federal contractors should plan to comply with Component 1 of the EEO-1 report by the previously set March 31, 2018 deadline. Employers should also take the opportunity this stay provides to review their compensation practices and ensure they are applied in a non-discriminatory manner.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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