Employers Await EEOC Guidance on Pay Data Reporting

Agency mostly mum after court reinstates pay data requirement for EEO-1s

For many large employers, it’s time once again to submit their workers’ demographic data to the Equal Employment Opportunity Commission. But what’s yet unclear is when they will need to send pay data for those workers along with it.

Earlier this month, a federal court reinstated the EEOC’s pay data reporting requirement, which the agency introduced under the Obama administration only to be frozen by the Trump administration. But when the agency opened its online portal on March 18 to accept EEO-1 filings for 2018 data, it didn’t give employers an option to include the pay data component.

In a statement, the EEOC said it “is working diligently on next steps in the wake of the court’s order” to collect employers’ pay data and “will provide further information as soon as possible.”

As the May 31 deadline approaches for these filings, many employers might be preparing the pay data just in case while they await clearer guidance from the EEOC. 

Most private employers with 100 or more employees, along with many federal contractors with a headcount of 50 or more, are required to file an EEO-1 report to the EEOC each year. The EEO-1, which asks companies to list how many employees they have by race, gender and ethnicity across different job categories, was amended during the Obama administration to include the employees’ earnings and hours worked. The new reporting would make it easier for the EEOC to glean which companies might be engaging in pay discrimination.

Many employers decried the EEO-1 pay data reporting as being an administrative burden and posing confidentiality risks once it’s in the government’s hands. The Office of Management and Budget under President Trump cited those reasons when it stayed the EEOC’s requirement in September 2017, months before employers would be submitting their first EEO-1s with pay data.

But on March 4, U.S. District Court Judge Tanya Chutkan of the District of Columbia put the pay data requirement back in play. The court found that the OMB didn’t provide a reasoned explanation for its decision to stay the pay data requirement, thereby violating the Administrative Procedure Act.

Larry Lee, an employment attorney and shareholder at Jones & Keller in Denver, said many employers will likely want to “play it safe” and get the pay data ready to submit with the EEO-1. The key would be to start the EEO-1 process early, especially this year where the pay data addition can make the filing “pretty arduous and challenging” to prepare, Lee added.

Some employers might be thinking they can put off the EEO-1 preparation until April, but that could have them running alongside the corporate tax deadline and other administrative heavy lifts at the company, Lee said. Working on the filing early also means companies should have time to clarify uncertainties they have with filling out this year’s EEO-1, especially with its new component.

“There are always last-minute questions right at or before the deadline that employers can’t always figure out until it’s too late,” Lee said.

The EEOC has already pushed the filing deadline back from March 18 to its current May 31 date, and it remains to be seen whether the agency will delay the deadline yet again in light of the court decision.

The case that got the pay data requirement reinstated, National Women’s Law Center, et al. v. OMB, et al., is ongoing and remains closely watched. In its March 18 request for a status conference, the National Women’s Law Center said the EEOC rebuked its requests for information on how the agency plans to comply with the court’s order. 

The plaintiffs claim the EEOC has been unclear as to why it’s currently accepting the EEO-1’s the demographic data, or “Component 1,” but not the pay data of “Component 2” as ordered by the court.

“Plaintiffs have requested information about EEOC’s timeframe for compliance and plans for alerting the reporting community to the obligation to submit Component 2 pay data,” the plaintiffs said in the filing, “but Defendants’ counsel has not provided any information beyond the content of the notice.”

As a result of Tuesday’s status conference, the EEOC and OMB have until April 3 to submit a timeline for when they will collect employers’ pay data. The plaintiffs may submit their response by April 8. 

In their status conference request, the plaintiffs remarked that it will be increasingly difficult for employers to comply with the pay data requirement the longer the EEOC waits to open the portal for that information.

“[I]n light of the deadline of May 31, 2019 for employers to submit their EEO-1 reports for 2018, further delay in opening reporting for Component 2 pay data, and the possibility of employers submitting Component 1 data without Component 2 pay data, risks logistical difficulties and gaps in employer compliance.”

— Doug Chartier

Previous articleThree Join Holland & Hart’s Tax and Benefits Practice
Next articleWalsh Considering Senate Run

LEAVE A REPLY

Please enter your comment!
Please enter your name here