Federal Court Reinstates Controversial Pay Data Collection Portion of EEO-1

Employers that submit annual Employer Information Report EEO-1 (EEO-1 Reports) will be required to report their employees’ pay data to the Equal Employment Opportunity Commission (EEOC), according to a U.S. District Court for the District of Columbia decision issued March 4, 2019.

The Court did not address the potential impact of its decision on the current reporting period. With the opening date for employers to begin to file their 2018 EEO-1 Reports only weeks away, it is unlikely that the EEOC would be able to timely retool its survey to require pay data submission for this cycle. In addition, the government is likely to appeal the Court’s decision. Consistent with its past practices, the EEOC may clarify by issuing a statement about the Court’s decision on EEO-1 Pay Data Collection.

In September 2016, the Office of Management and Budget (OMB) approved controversial revisions to the EEOC’s EEO-1 Report. The revisions included a new Component 2, which required all submitting employers to add W-2 compensation and hours worked data in 12 pay bands to their annual disclosure of employees’ ethnicity, race and sex.

Before the anticipated implementation of Component 2 in the then-upcoming 2017 EEO-1 survey, however, the OMB decided to review and stay the collection of Component 2 pay data in August 2017. Among other things, the OMB stayed the data collection contending the revisions were unnecessarily burdensome on employers and did not adequately address privacy and confidentiality concerns.

The National Women’s Law Center and the Labor Council for Latin American Advancement sued the OMB, the EEOC and public officials to reinstate the revised EEO-1 reporting requirements, among other forms of relief.

Finding the OMB’s arguments unpersuasive and actions illegal, the Court vacated the OMB’s stay of the revised EEO-1 Report and ordered that the previous approval of the revised EEO-1 Report shall be in effect.

The EEOC recently announced the opening date for employers to begin to file their 2018 EEO-1 Reports is March 18, 2019 and the deadline to submit EEO-1 data has been extended until May 31, 2019.

We will continue to monitor the case and report further details and recommendations regarding the revised EEO-1 Report.