EEO-1 Pay Data Collection May Be Back

For employers who have been sitting on the edge of their seats waiting for news on the EEO-1 pay data collection requirements, wait no longer. For those of you who have not paid much attention to the fact that changes are afoot, now is the time to take note, as barring any new legal actions or orders (which may be in the works), the pay data collection requirement is back! 
 
You may recall that the EEOC revised the EEO-1 a few years ago to require the reporting of summary employee pay data (known as Component 2) by employers with 100 or more employees. The “new” EEO-1 required employers to provide demographic information and data on their employees’ W-2 earnings and hours worked. More specifically, the pay data component required employers to report: 1) the total number of full- and part-time employees during a calendar year in each of 12 pay bands for each of the 10 EEO-1 job categories; (2) the hours worked by the employees in each of those bands and job categories; and (3) the total income for those employees, separated by race/ethnicity and gender, based on the employees’ W-2 income. The goal of the collection was to assist the EEOC and the United States Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) in identifying pay disparities across industries and occupations. The expectation was that, in providing this information, employers would identify pay gaps, which could then be investigated and corrected. 
 
The Office of Management and Budget (“OMB”) approved the new EEO-1 form in 2016, but (after the election) decided to stay its approval of the pay data reporting portion. Employers sighed in relief, because it was going to take a tremendous amount of work to convert their data into the format required by the new form, with little sense of how the information could result in any meaningful analysis by the EEOC or OFCCP. Equal pay interest groups disagreed with the OMB’s stay, as evidence most notably by a lawsuit filed by The National Women's Law Center in the District of Columbia. The judge in that case agreed and, on March 4, 2019, entered an Order reversing the OMB’s decision to stay the effective date of the revised EEO-1 form. 
 
The court’s order, in effect, requires that the EEOC use the approved revised EEO-1 form, with the pay data collection portion, and create a system for collecting the pay data before September 30, 2019, when the approved form expires. The court ordered the EEOC to submit a plan for doing so. In a submission to the court on April 3, 2019, the EEOC stated it will be able to “close” the collection of the pay data by September 30, 2019, which means the deadline for employers to submit the pay data for 2018 will likely be set on that date (unless the court orders otherwise).  Although it is fairly clear from the submission to the court – and subsequent statements made by the Acting Chair of the EEOC in seminar presentations – the EEOC may not actually be prepared to collect the data by September 30, 2019, if the plan is approved by the court, employers now need to dust off (or create) their databases and prepare to report the pay data. 
 
Importantly, this development does not change the general deadline to file the EEO-1 for 2018. Currently, employers required to file EEO-1 reports are still required to file 2018 Component 1 (demographic data) on or before May 31, 2019 and can do so via the EEOC’s “EEO-1 Portal” at www.eeoc.gov/employers/eeo1survey/index.cfm.

We anticipate that even if appeals are filed or other actions are taken to prevent the data collection on September 30, 2019, some form of pay data collection process will be used in the future. Employers should begin preparing for the submission of the pay data now by reviewing their internal systems to ensure they will be able to produce the pay data that will ultimately be required with as little disruption to on-going business operations as possible. Employers should also conduct an audit of their pay practices – preferably with the assistance of legal counsel to help protect the results. The goal of this audit is to identify any pay gaps that are not easily justified by legitimate, non-discriminatory reasons (i.e., use of a seniority or merit system to set compensation; systems that use quantity or quality of production, sales or revenue to set compensation; education, training or experience differences; geographic location where job is performed (for multi-location employers)) so corrective measures can be taken to address these gaps, preferably before the federal government or a future plaintiff, gets its hands on your information. In the meantime, we will continue to watch for new developments that may affect the potential September 30, 2019 pay data collection deadline.
 
For more information regarding EEO-1 reporting or for assistance in conducting a pay practices audit, contact Tami Earnhart, Maureen Maffei or any other member of our Labor, Employment and Immigration Group.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.