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EEO-1 Pay Data Rule Rollercoaster – Stay Tuned but Don’t Panic!

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EEO-1 Pay Data Rule Rollercoaster – Stay Tuned but Don’t Panic!

Following shifting executive policies, court decisions, and guidance on the EEO-1 Pay Date reporting requirement, the EEOC has now confirmed that the May 31, 2019 deadline to report pay data is officially on hold (for now).

By way of background, in 2016, under the Obama administration, the EEOC expanded its annual mandatory “Employer Information Report EEO-1” (EEO-1) form to require employers and federal contractors with 100 or more employees to include pay data, categorized by race, ethnicity and gender, in their reports (see Dykema’s previous update here). The EEOC also extended the reporting deadline for calendar year 2017 (the first year requiring the new pay data) to March 31, 2018. The expanded data collection sought to combat pay discrimination by identifying wage disparities

In August 2017, the Trump administration suspended the new reporting rule, citing concerns that aspects of the new form “lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.”

Following the change in policy by the new administration, several advocacy groups brought suit against OMB and EEOC, arguing that OMB's decision to suspend the pay data rule was improper. On March 4, 2019, the U.S. District Court for the District of Columbia vacated the Trump administration’s decision, citing its failure to “provide a reasoned explanation for the change.” The Court’s decision put the pay reporting requirement immediately back into effect.

On Monday, March 18, 2019, the EEOC announced that it was opening its online portal to receive 2018 EEO-1 data without pay data reporting and that the portal would remain open through May 31, 2019. The announcement confirmed that employers would not be required to report on pay data by the May 31st deadline.

However, during a status conference on March 19, the Court ordered the EEOC to inform employers about the status of the pay data disclosures by Wednesday, April 3. The EEOC is required to provide information about how the data will be collected, by what deadline, and how employers should prepare the data.

What Should Employers Do Next?

We expect that the EEOC or OMB will appeal the court’s reversal of the OMB’s stay and seek to delay the collection of the expanded EEO-1 data. However, employers should operate under the assumption that they will have to comply with the revised EEO-1 reporting rules–because, in light of the ruling, the judge could force the EEOC’s hand immediately, or the appellate court, should there be an appeal, may decide that the rule should not be suspended pending appeal.

In light of these considerations, employers should: 1) investigate whether their payroll or HR systems are currently tracking the pay data necessary to complete the revised EEO-1 form, 2) continue to prepare the 2018 EEO-1 forms under the assumption that pay data will be required, and 3) consider conducting a privileged internal analysis to proactively find and fix pay disparities. We strongly encourage employers to consult an attorney during the process as federal and state legislation on pay disparity and discrimination vary.

To ensure compliance for 2018 reporting and onward, employers should stay up to date on further developments in the pending litigation as well as any further guidance from the EEOC. Dykema will continue to monitor and provide updates as events unfold. For more information or assistance with EEO-1 reporting, or any other legal issues in the workplace, contact the author of this blog or the Dykema lawyer with whom you work.