In-Depth Analysis

EEO-1 Pay Data Disclosure Requirement on Hold, Being Reconsidered by EEOC

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Title VII requires employers to make and keep records relevant to the determination of whether unlawful employment practices have occurred or are occurring, and to produce those records to the U.S. Equal Employment Opportunity Commission (EEOC). Accordingly, most employers subject to Title VII, who have 100 or more employees, as well as certain federal contractors, are required to file an Employer Information Report EEO-1 (EEO-1 Report). While the EEO-1 reporting requirement is not new, in 2016, the EEOC proposed revisions to the data collection process that would have required employers to report information on employee pay and hours worked. The EEOC claimed that access to this type of data would improve administrative investigations of possible pay discrimination that contributes to persistent wage gaps for women and minorities in the United States labor market. On August 29, 2017, however, the OMB immediately stayed the new pay data reporting requirement and directed the EEOC to publish a notice confirming that businesses may use the previously approved EEO-1 form in order to comply with their reporting obligations for FY 2017.

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EEO-1 Pay Data Disclosure Requirement on Hold, Being
Reconsidered by EEOC
By Shane T. Muñoz and Viktoryia Johnson,i
FordHarrison LLP


Overview of EEO-1 Reporting Requirement. Section 709(c) of Title VII of the Civil
Rights Act of 1964 (Title VII) requires employers to “make and keep” records relevant to
the determination of whether unlawful employment practices have occurred or are
occurring, and to produce those records to the U.S. Equal Employment Opportunity
Commission (EEOC). Pursuant to this authority, the EEOC in 1966 issued a regulation
requiring most employers subject to Title VII and having 100 or more employees
annually to file with the EEOC copies of Standard Form 100, otherwise known as
“Employer Information Report EEO-1” (EEO-1 Report). In 1978, pursuant to Executive
Order 11246, the U.S. Department of Labor’s (DOL) Office of Federal Contract
Compliance Programs (OFCCP) (the agency responsible for ensuring that federal
government contractors comply with anti-discrimination laws and regulations) issued a
regulation extending this obligation to certain federal contractors.
The EEO-1 Report collects summary data regarding the racial, ethnic, and gender
makeup of an employer’s workforce, categorized by job category. The EEOC and
OFCCP use the reports to identify disparities between the demographics of an
employer’s workforce and the demographics that one would expect to see in the
absence of discrimination, in each of the 10 job categories in the geographic area where
the employer is located. If there are disparities that are statistically significant, that may
be an indicator of discrimination, and may result in further investigation by the agency.
In this manner, the agencies use EEO-1 Reports to study employment patterns and to
help enforce anti-discrimination laws.
Proposed Revisions. On February 1, 2016, the EEOC proposed revisions to the EEO1 Report data collection process. The proposed revisions resulted from a multi-year
effort among the EEOC and other federal agencies (including the DOL) to identify ways
for improving enforcement of federal laws prohibiting pay discrimination. The proposed
revised EEO-1 Report has two components. The first component (Component 1) would
collect the same data that was gathered by the current EEO-1 Report—i.e., employee
race, ethnicity, and gender, separated by job category. The second component
(Component 2) would collect data on employees’ W-2 earnings and hours worked.
According to the EEOC, the access to this type of employee pay and hours information
would improve administrative investigations of possible pay discrimination that
contribute to persistent wage gaps for women and minorities in the United States labor
market.
Under the proposed revisions, covered private employers and contractors would be
required not only to report the number of employees employed in each of the 10 job
categories by ethnicity, race, and gender, but would also be required to report, for each
job category, the number of employees falling within each of 12 pay bands. The bands
range from “$19,239 and under” to “$208,000 and over.” Covered employers and
contractors would also be required to report the aggregate hours worked by employees
in each pay band for the last 12 months, sorted by ethnicity, race, and gender. This
data would allow analysis of pay differences while considering aggregate variations in
hours.
On September 29, 2016, the EEOC announced that, starting in March 2018, it would
officially begin the W-2 data collection. The EEOC set March 31, 2018, as the deadline
for filing the new 2017 EEO-1 Reports, affording companies and contractors subject to
this requirement 18 months to prepare for compliance.
The Revised EEO-1 Is “Immediately Stayed.” On August 29, 2017, however, the
Administrator of the Office of Information and Regulatory Affairs (OIRA), of the OMB,
after a “review,” “immediately” stayed the new pay data reporting requirement
implemented by the EEOC nearly a year prior. Pursuant to a memorandum from
OIRA Administrator Neomi Rao to Acting Chair of the EEOC Victoria Lipnic, the
EEOC was directed to continue collecting only the traditional ethnicity, race, and
gender EEO-1 information. OIRA based the stay on (1) the lack of notice or
opportunity for public comment regarding data file specifications released by the
EEOC subsequent to implementing the revised EEO-1 Report; (2) inaccurate
estimates of compliance burdens; and (3) impracticability, burdensomeness, and
confidentiality issues associated with the new data collection process, given the
sensitive nature of employee data subject to disclosure:
[S]ince approving the revised EEO-1 form on September 29, 2016, ...
EEOC has released data file specifications for employers to use in
submitting EEO-1 data. These specifications were not contained in the
Federal Register notices as part of the public comment process nor were
they outlined in the supporting statement for the collection of information.
As a result, the public did not receive an opportunity to provide comment
on the method of data submission to EEOC. In addition, EEOC’s burden
estimates did not account for the use of these particular data file
specifications, which may have changed the initial burden estimate.
OMB has also decided to stay immediately the effectiveness of the revised
aspects of the EEO-1 form for good cause, as we believe that continued
collection of this information is contrary to the standards of the [Paperwork
Reduction Act]. Among other things, OMB is concerned that some
aspects of the revised collection of information lack practical utility, are
unnecessarily burdensome, and do not adequately address privacy and
confidentiality issues.
In connection with the stay, the OIRA directed the EEOC: (1) to submit to the OMB a
new data collection package for the EEO-1 form; and (2) to publish a public notice
“announcing the immediate stay of effectiveness of the wages and hours worked
reporting requirements contained in the EEO-1 form and confirming that businesses
may use the previously approved EEO-1 form in order to comply with their reporting
obligations for FY 2017.” The new data collection process remains under review.
Conclusion. The implementation of the revised EEO-1 Report and its additional
reporting requirements is stayed until further notice. Companies subject to the EEO-1
reporting requirement should not report aggregate data about their employees’ W-2
(Box 1) income and hours worked (i.e., the information required by Component 2 of the
revised EEO-1 Report). While employers may use the version of the EEO-1 Report
form implemented on September 29, 2016, they should leave the salary information
portion blank. Filers should continue to submit the Component 1 data regarding
employees’ ethnicity, race, and gender, separated by job category. 2017 EEO-1
Reports reflecting Component 1 only are due to the EEOC by March 31, 2018. For
purposes of this report, employers should count their employees in the fourth quarter of
calendar year 2017, between October 1, 2017 and December 31, 2017 (the “workforce
snapshot period”).


i If you have any questions regarding this article, or your company’s obligation for EEO-1 reporting or
other employment law matters, please feel free to contact the authors of this Alert, Shane Muñoz, (813)
261-7803 or smunoz@fordharrison.com, or Viktoryia Johnson, (813) 261-7814 or
vjohnson@fordharrison.com, or the FordHarrison attorney with whom you usually work.