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By: Brad Adler and Brent Bean
As we have previously reported, 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. By way of background, companies with 100 or more employees, along with federal contractors who employ 50 or more employees, have long been 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. But with the additional pay data collection requirements, pay data also must be sorted by race, ethnicity and sex.
In August 2017, the Office of Management and Budget announced a stay of this pay data collection requirement, citing the burden imposed on businesses. 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 and seeking to reinstate the pay data collection.
On March 4, 2019, that court ruled that the EEOC must reinstate the pay and work hours reporting component of the EEO-1 Report. See National Women’s Law Center v. Office of Management and Budget, 2019 U.S. Dist. LEXIS 33828 (D.D.C. Mar. 4, 2019). Since that ruling (which was a blow to employers and a surprise to everyone, including the EEOC), the EEOC and the plaintiffs have been battling with each other (and the Court) over the timeline for collection of this data.
The same District Court judge has now ruled that the EEO-1 pay data (sorted by race, ethnicity and sex) must be collected from covered employers by September 30, 2019. The Commission advises that the portal will be open for pay data by July 15, 2019. As such, it is advisable that covered employers prepare now to submit 2018 pay data by September 30, 2019. Be advised, however, that reporting of customary EEO-1 data for 2018 is still due by May 31, 2019.
While there remains the option of an appeal of the District Court’s order, such an appeal may, or may not, have the effect of staying compliance with the order. As a result, we advise employers to start now in preparing for submission of the required pay data. In doing so, employers should work with outside counsel to identify any disparities that may draw increased scrutiny and to understand what legitimate, non-discriminatory reasons exist for their present pay practices.
FMG will keep you updated on activity by the Commission and its actions (and reactions) on this continuing saga.
If you have any questions or would like more information, please contact Brad Adler at [email protected] or Brent Bean at [email protected].