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eLABORate: Federal Court Gives Green Light to EEOC Pay Data Collection Creating Employer Uncertainty

March 06, 2019

A delayed Obama-era requirement for employers to report their pay data to the Equal Employment Opportunity Commission (EEOC) has been revived by a federal judge, creating uncertainty for employers about their upcoming yearly EEO-1 reporting requirements and any possible changes to the current May 31, 2019 reporting deadline.

The EEO-1 is an annual federally mandated survey. It requires all private employers with 100 or more employees and federal government contractors or first-tier subcontractors with 50 or more employees and a federal contract, sub­contract or purchase order amounting to $50,000 or more to file the EEO-1 report with the EEOC. The survey requires company employment data to be categorized by race/ethnicity, gender and job category.

This story began in 2016, when the EEOC announced that starting in March 2018, it would require employers to report employee pay data and hours worked, with the aim of facilitating EEOC investigations into possible pay discrimination and wage disparity. At that time, then U.S. Secretary of Labor Thomas E. Perez stated, “better data will not only help enforcement agencies do their work, but it helps employers to evaluate their own pay practices to prevent pay discrimination in their workplaces.”

However, in August 2017, the Trump Administration’s Office of Management and Budget (OMB) indefinitely stayed the pay data collection requirement to review the requirements and the burden it would impose on employers. Employee advocate groups, the National Women’s Law Center and the Labor Council for Latin American Advancement, subsequently filed suit in federal court to lift the stay and require the pay data collection. (National Women's Law Center v. Office of Management and Budget, No. 17-cv-2458 (D.D.C. March 4, 2019)

U.S. District Court Judge Tanya S. Chutkan has now ruled that the OMB provided an inadequate basis for its decision to stay the data collection, and ruled the previously approved EEO-1 form, including pay data collection, was reinstated. The District Court’s opinion also highlighted the government’s inconsistency as to the pay data collection requirement and any purported burden on employers:

OMB also failed to demonstrate good cause for the stay . . . OMB’s stated reason when issuing the stay also conflicted with its prior findings that EEOC’s data collection had practical utility, was designed to minimize the burden on reporting employers, and provided adequate privacy and confidentiality protections. OMB failed to explain these inconsistencies. (citations omitted)

It remains to be seen if the government will appeal the District Court’s decision and whether the EEOC will make any adjustments to the current deadline for employers to submit their EEO-1 filings. The deadline was already extended to May 31, 2019 due to the recent U.S. Government partial shutdown. The Phelps team will be monitoring these developments and will provide updates as they become available. Employers should also refer to the EEO-1 website for additional information regarding their reporting requirements.