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Posts Tagged ‘EEO-1’

Employers May Need to Submit EEO-1 Pay Data As Early As May 31, 2019, Although the EEOC is Advocating for a Later Deadline of September 30, 2019

Posted on: April 15th, 2019

By: Paige Pembrook

Last month, the U.S. District Court for the District of Columbia reinstated the Equal Employment Opportunity Commission (EEOC) rule requiring employers to report pay information by race, ethnicity and sex with their EEO-1 Report. However, employers still wait for an answer on when they will have to actually file the pay data. If employee advocacy groups have their way, it could be as soon as May 31, 2019. However, the EEOC is pushing for later deadline of September 30, 2019.

The EEO-1 Report is mandatory for businesses with at least 100 employees and federal contractors with at least 50 employees and a federal government contract of $50,000. Such employers must report the number of employees who work for the business by job category, race, sex, and ethnicity on the EEO-1 Report.

In 2016, the EEOC adopted additional EEO-1 pay data collection requirements commanding employers to report employee wages and hours worked by race, ethnicity and sex. In 2017, the Office of Management and Budget (OMB) stayed the pay data requirements. Employee advocacy groups sued to challenge the stay on the basis that the OMB provided inadequate reasoning to support its decision.

On March 4, 2019, the U.S. District Court Judge agreed with the employee advocates and ordered, “the previous approval of the revised EEO-1 form shall be in effect,” including the pay data collection requirements. (National Women’s Law Center v. Office of Management and Budget, No. 17-cv-2458). The Judge also ordered the EEOC to describe when and how it will comply with the order lifting the stay on the EEO-1 pay data collection.

Employers must be aware that the ruling could take immediate effect and require employers to submit pay data as early as May 31, 2019, along with the other 2018 EEO-1 information. However, the EEOC is pushing for a later deadline of September 30, 2019, to allow employers more time to collect the required data.

On April 3, 2019, the EEOC filed court documents proposing that employers be required to submit pay data to the agency by September 30, 2019. The EEOC’s filing also proposed that employers only be required to submit pay data for 2018, rather than 2017 and 2018, and describes the EEOC’s plan to use a data and analytics contractor to develop a new reporting program to collect the data.

On April 8, 2019, the employee advocacy groups told the judge that they want the EEOC to collect employers’ pay data by the same May 31, 2019, deadline that employers must submit other EEO-1 information or show why that is impossible.

After a hearing on April 16, 2019, the Judge will have the final say on the deadline. FMG will continue to watch the EEO-1 Report developments and provide updates to keep employers informed. In the meanwhile, employers should prepare to collect and report the required pay data as soon as possible.

If you have any questions or would like more information, please contact Paige Pembrook at [email protected].

EEO-1 Pay and Hours Data Requirement In Limbo

Posted on: March 21st, 2019

By: Brent Bean

Whether and when covered businesses have to comply with revised EEO-1 requirements for pay and hours worked data remains uncertain as the reporting period opens. Companies with 100 or more employees, along with federal contractors who employ 50 or more employees, are required to submit to the EEOC annual Employer Information Reports, so-called EEO-1 reports. These reports disclose information concerning the number of employees a company employs broken down by job category, race, sex, and ethnicity. In 2016 the EEOC requested approval from the Office of Management and Budget to begin collecting pay and hours worked data. The ostensible aim of these additions was to generate data from which the Commission could begin to identify pay disparities and potential discriminatory practices.

In August 2017 OMB announced a stay of these new collection requirements due to the burden imposed on businesses when weighed against the perceived utility of the data. In response, the National Women’s Law Center brought suit in the District Court for Washington, D.C., challenging the OMB’s basis for taking that action. On March 4 of this year, that court issued an opinion reinstating the pay and work hours reporting requirement, finding the OMB had acted arbitrarily and capriciously in eliminating the requirement. See National Women’s Law Center v. Office of Management and Budget, 2019 U.S. Dist. LEXIS 33828 (D.D.C. Mar. 4, 2019).

EEO-1 reports for 2018 however, are due between March 18 and May 31. Accordingly, this recent ruling and putative change in reporting requirements raise some significant concerns about the practical ability of employers to comply on such short notice. The EEOC’s portal for EEO-1 reports opened on Monday, March 18 without any reference to pay and hours worked data. The Commission stated that it is working diligently on complying with the court’s order and further information regarding pay and hours worked reporting would follow.

While it is expected that the OMB will appeal the District court’s ruling, it is not clear at all whether that appeal will cause a stay of the reporting requirement for pay and hours information for 2018.

So questions remain: will employers have to provide this information in their 2018 reports and if so, when?

At a status conference on March 19, the District Court Judge issued an order that the Commission must explain by April 3 how it will implement the March 4 Order reinstating the collection of pay data. As such, we can expect some additional information from the Commission by then, as well as perhaps a notice of appeal from OMB.

FMG will keep you updated on activity by the Commission and the Courts. But employers should prepare now with a thorough review of their pay structures in order to identify not only any disparities that may raise red flags and draw increased scrutiny, but also to understand what legitimate, non-discriminatory reasons exist for their present pay practices.

If you have any questions or would like more information, please contact Brent Bean at [email protected].

EEO-1 Reporting Is Coming and There Are Some Things You Should Know

Posted on: March 11th, 2019

By: Hillary Freesmeier

Employers with 100 or more employees are no stranger to the EEO-1 Report. The EEO-1 Report requires all employers with 100 or more employees, or federal contractors with 50 or more employees awarded a contract of $50,000 or more, to report employee demographics by gender, race, and ethnicity each year. Typically, the report must include data from any pay period from October to December and must be filed by March 31 of the following year. However, in light of the government shutdown, the EEOC has delayed the opening of the EEO-1 reporting period to March 18, 2019 and has extended the deadline to May 31, 2019.

Additionally, a federal court has reinstated previous expansion to the EEO-1 Report, which requires employers to also track and report compensation and hours worked within 12 pay bands based on employees’ gender, race, and ethnicity.

Such expansion dates back to a January 2016 Obama-era proposal that required employers to also provide W-2 earnings and hours worked with their EEO-1 Report in an effort to increase pay transparency and equal pay compliance. Such proposal was approved by the Office of Management and Budget (OMB) in September 2016 and was titled “Component 2.” Before Component 2 could be implemented, the OMB decided to review and stay the collection of Component 2 data.

Shortly after the stay was effected, the National Women’s Law Center and the Labor Council for Latin American Advancement sued to reinstate the Component 2 reporting requirements. On March 4, 2019, U.S. District Judge Tana J. Chutkan in the District of Columbia vacated OMB’s stay and ordered that the Component 2 revisions go into effect.

Although the EEO-1 reporting period is just days away, employers don’t be alarmed. It is unlikely that the EEOC will require Component 2 reporting for 2018 on such short notice. Additionally, it is currently anticipated that the government will appeal the ruling. Therefore, employers’ best course of action is to monitor the EEO-1 reporting requirements closely. FMG will continue to watch the EEO-1 Report developments and provide updates to keep employers informed.

If you have any questions or would like more information, please contact Hillary Freesmeier at [email protected].