Menu

EEO-1 Pay Data Collection Stay Held "Arbitrary and Capricious"

Labor & Employment   |   Employee Benefits, Compensation & ERISA   |   March 6, 2019
Download   
Share Page

On March 4, 2019, District of Columbia District Court Judge Tanya Chutkan ruled that the government did not properly stay the implementation of the Equal Employment Opportunity Commission's (EEOC's) revised Employer Information Report (EEO-1) for the collection of aggregate workforce pay data. National Women's Law Center et al. v. Office of Management and Budget, et al., 2019 WL 1025867. The decision creates uncertainty regarding employer reporting obligations in the near term.

As we previously reported, in 2016 the EEOC proposed revisions to the EEO-1 report form, which the EEOC requires private employers with 100 or more employees, or government contractors with 50 or more employees, to submit annually. Proposed during the waning days of the Obama Administration, the EEOC's revised collection criteria required employers to tabulate and report the number of employees in each category whose W-2 wage earnings for the prior year fell within each of 12 pay bands, in addition to providing race, sex and ethnicity data in 10 standard EEO-1 job categories. The EEOC's stated purpose for the proposed EEO-1 change was to use the new information to "identify discriminatory pay practices where they exist in order to ensure that fair pay practices are put in place." See Questions and Answers, Notice of Proposed Changes to the EEO-1 to Collect Pay Data from Certain Employers.

The White House Office of Management and Budget (OMB) initially approved the proposed data collection, issuing an OMB control number required under the Paperwork Reduction Act in September 2016. Although slated for implementation in September 2017, the pay data reporting deadline was eventually pushed back to March 2018 to allow employers more time to comply.

Following President Trump's election in November 2016, the OMB changed course without much explanation, and apparently bowing to pressure from business groups who opposed the pay data collection. In August 2017, the OMB issued a memorandum to the EEOC indicating that it was initiating a review and immediate stay of the revised data collection regulation in accordance with its authority under the Paperwork Reduction Act. The OMB ordered the EEOC to publish a notice in the Federal Register announcing the stay. See 82 Fed. Reg. 43362 (Sept. 15, 2017). The EEOC therefore suspended all efforts to collect pay data, directing employers to submit the prior approved EEO-1 report form by March 2018 for the 2017 reporting period.

In November 2017, the National Women's Law Center and the Labor Council for Latin American Advancement sued the OMB, the EEOC and designated officers in the District of Columbia district court, challenging the OMB's reversal. On March 4, the court granted the plaintiffs' summary judgment motion, finding that the OMB's decision to stay enforcement of the revised EEO-1 reports was "arbitrary and capricious" and exceeded its administrative authority. The court issued an order reinstating the data collection rule (now one year past its initial data collection date) and approving the revised EEO-1 form proposed by the EEOC in the original regulations.

The opinion does not explain when or how employers are supposed to respond, and as of this writing, neither the EEOC nor OMB have issued any statements or direction concerning compliance. The EEOC had already pushed back its March 2019 deadline for employer 2018 EEO-1 reports (under non-pay data collection rules) to May 31, 2019, due to the government shutdown earlier in the year. With the 2018 reporting portal not yet opened, it is unknown whether the ruling will impact the current reporting period or what the EEOC and OMB will do in light of this ruling in the short term. We will continue to monitor for developments.

What is clear is that the EEOC's attempt to find ways to identify and rectify prohibited pay discrimination just got a green light from a federal district court. It remains to be seen whether the information to be provided in the revised EEO-1 report will accomplish that goal. Certainly, though, the potential collection and analysis of aggregate employer data may embolden the agency to pursue more pay equity claims in the future.


©2019 Carlton Fields, P.A. Carlton Fields practices law in California through Carlton Fields, LLP. Carlton Fields publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information and educational purposes only, and should not be relied on as if it were advice about a particular fact situation. The distribution of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship with Carlton Fields. This publication may not be quoted or referred to in any other publication or proceeding without the prior written consent of the firm, to be given or withheld at our discretion. To request reprint permission for any of our publications, please use our Contact Us form via the link below. The views set forth herein are the personal views of the author and do not necessarily reflect those of the firm. This site may contain hypertext links to information created and maintained by other entities. Carlton Fields does not control or guarantee the accuracy or completeness of this outside information, nor is the inclusion of a link to be intended as an endorsement of those outside sites.

Subscribe to Publications

Disclaimer

The information on this website is presented as a service for our clients and Internet users and is not intended to be legal advice, nor should you consider it as such. Although we welcome your inquiries, please keep in mind that merely contacting us will not establish an attorney-client relationship between us. Consequently, you should not convey any confidential information to us until a formal attorney-client relationship has been established. Please remember that electronic correspondence on the internet is not secure and that you should not include sensitive or confidential information in messages. With that in mind, we look forward to hearing from you.