September 6, 2017
Employers can breathe a collective sigh of relief. Last week, the Office of Management and Budget (OMB) announced “a review and immediate stay” of the new EEO-1 pay data requirements that were to be included in employers’ March 2018 reports to the EEOC.
Currently, private-sector employers with 100 or more employees are required to submit yearly reports to the EEOC that include data on the race, gender, ethnicity, and positions of their employees. Under the new requirements now on hold, 2017 reports, due by March 31, 2018, also would have required information about compensation and hours worked from these employers, in addition to other demographic information.
The new pay data requirements had been met with significant criticism from employers and the business community. Chief among the misgivings were that competitors might be able to access federal contractors’ proprietary and confidential data under a Freedom of Information Act request, that the transparency actually would not have any meaningful effect on pay equality, and that it would be too burdensome to collect and report such data.
In response to this final concern, the EEOC estimated that the new pay data requirement would add 6.6 hours to the preparations and submission of an EEO-1 report, and would involve a one-time implementation cost for development means to track pay data of about $377 per respondent. Many employers found these figures to be unrealistically optimistic, and these estimates may have been OMB’s basis for implementing the stay, although this is not clear.
Acting Chair for the EEOC Victoria Lipnic has been opposed to the pay data requirement since its announcement a year ago, but has been unable to persuade the commission to reverse course. This led members of the business community to call upon OMB to retract its approval of the EEO-1 form (granted during the prior administration’s tenure), which it is authorized to do if it later finds that the EEOC’s estimates of added burdens were “materially in error.”
While the “immediate stay” does not conclusively do away with the new pay reporting requirements advanced in 2016, such data will not be required in March 31, 2018, reports. Acting Chair Lipnic has stated that employers instead should plan to file the previously approved EEO-1 form, which does not include compensation data. Stay tuned for further information from the EEOC on whether and/or what compensation information will be required for future filings.
Our Insights are published as a service to clients and friends. They are intended to be informational and do not constitute legal advice regarding any specific situation.