Is the EEO-1 Wage Reporting Rule Back?
Last week’s HR Tip of the Week focused on EEO-1 reporting and some frequently asked questions regarding collecting data and filing those reports. We also mentioned that EEO-1 forms are used by the Equal Employment Opportunity Commission (EEOC) to ensure that unlawful employment practices are not being used or committed by employers based on the collection of employee data by job category, sex, race, and ethnicity. Why is it necessary to recap all of this? Well, a recent court order could change the data that is collected via EEO-1 forms.
THE OBAMA-ERA PAY DATA REPORTING RULE
On March 4, 2019 an order from the United States District Court for the District of Columbia reinstated the EEOC’s ability to expand the amount of data the EEOC can collect via EEO-1 forms to include pay data. Back in 2010, under the Obama administration, the EEOC joined other federal agencies to help determine ways to improve enforcement of federal laws prohibiting pay discrimination. With regard to EEO-1 form reporting, the EEOC commissioned a study collecting pay data from employers by sex, race, and national origin to help uncover possible pay discrepancies by sex, race, and national origin. In September of 2016, after conducting its study, which included convening focus groups and soliciting public comment, the EEOC received approval from the Office of Management and Budget (OMB) to begin collecting pay data from employers via the EEO-1 form. It was the EEOC’s intent to begin collecting pay data for the 2017 reporting cycle, so by the March 31, 2018 deadline.
But, between the EEOC’s approval in September 2016 and its implementation in March 2018 an election happened and changes were made. Less than a year after the OMB approved the EEOC’s proposed pay data collection, on August 29, 2017, the OMB stayed the practice for further review.
IS WAGE REPORTING BACK ON?
Outside groups sued to overturn the OMB’s stay, and this week a court agreed. The order from March 4, 2019 held that OMB’s stay of EEOC’s pay data collection was illegal and that OMB’s reasoning for such a stay lacked support in the record. The ultimate outcome of this order resulted in the OMB’s stay being vacated and the previous EEO-1 form requiring collection of pay data be implemented going forward.
EEO-1 PAY DATA REPORTING IN 2019 OR 2020?
Many employers are likely to be unhappy with this order because it may result in additional work when filing an EEO-1, since employers now have to provide pay data in addition to employee data by job category, sex, race, and ethnicity. The good news is that this additional pay information should be easy to obtain from the company’s payroll provider or its employees’ W-2s. Moreover, there is a good possibility this order will be appealed and the additional requirement will be in limbo until the appeal process is complete. Employers should stay tuned as this process unfolds to ultimately determine if they will need to collect pay data in future filings. In the meantime, companies should focus on filing their current EEO-1 form, without any pay data, by the extended deadline of May 31, 2019.
If you have any questions regarding the March 4th order, the new reporting requirements or EEO-1 form filing in general, please contact your Thompson Coe attorney at (651) 389-5000 or at myHRgenius@thompsoncoe.com. You can also find additional information and tips for your company and HR professionals at https://myhrgenius.co.
Thompson Coe’s Tips of the Week are not intended as a solicitation, do not constitute legal advice and do not establish an attorney-client relationship.