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Changes to the EEOC’s Pay Data Reporting Requirements  

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By Melvin J. Davis and Ian D. Mitchell

Employment Liability Newsletter
August 2018

During his campaign, President Donald Trump vowed to overhaul numerous policies set by the Obama administration, leading many to ponder whether he will follow through on those promises now that he is in office. In particular, employers and lawyers that practice in the fields of employment law and business litigation are curious to learn whether President Trump will scale back the scope of the Equal Employment Opportunity Commission in a manner commensurate with his campaign rhetoric.[1]Spearheading this inquiry is the fact that President Trump, immediately after taking office, had the opportunity to name a new EEOC Chair and shift the partisan balance of the Commission in favor of Republicans.

Pro-business lobbyists, sensing an opportunity to roll-back the EEOC’s perceived anti-business policies, have pressed President Trump to repeal, or at least revisit, the EEOC initiatives they deem most troublesome.[2]Given the overwhelming impression that President Trump and several of his key advisors are motivated to establish more business-friendly policies, it is not surprising that pro-business groups see an opportunity to undermine the EEOC’s expanded mandate under the Obama administration. Following the completion of the president’s first year and a half in office, it is worthwhile to take stock of at least one critical change that occurred in the EEOC during that time.

One of the critical Obama-era initiatives first believed to be on the chopping block was the EEOC’s campaign to eliminate pay discrimination in the workplace. During his second term, President Obama issued a mandate to the Equal Employment Opportunity Commission to identify and eliminate discriminatory pay practices. In response, the agency proposed several revisions to the EEO-1 Form, which is used to annually obtain demographic information from employers relative to their employees’ race, ethnicity, sex, and job category.[3]In January 2016, the EEOC announced that, going forward, employers would also need to report data on employee pay ranges and hours worked to “assist the agency in identifying possible pay discrimination and assist employers in promoting equal pay in their workplaces.”[4]In particular, both private employers and government contractors would be required to report the number employees (broken down by job category, ethnicity, race, and gender) that fall within twelve (12) pay ranges or “bands.” The revised form was released on September 29, 2016, and the first reporting deadline for employers was scheduled for March 31, 2018.[5]

These revisions were heavily criticized by Republican politicians at the time and some members of the business community as being too burdensome on employers without guarantees that the collected information would actually root out pay discrimination.[6]Private-sector critics likewise advocated that President Trump and the GOP-controlled Congress should make undoing the rule a priority in 2017 due to the costs that would inevitably inure to businesses.[7]However, that mission stood in stark contrast to the Obama administration, which sought to impose more detailed reporting requirements because it considered the free market unable and/or unwilling to address pay discrimination head-on. Indeed, the stated purpose of the proposed EEO-1 revisions articulated the Commission’s belief that employers are more likely to consider and correct pay disparities if they must first confront their own internal data on an annual basis.[8]

Early on in his administration, President Trump issued executive orders for substantial regulatory reform, and pro-business groups continued their intense lobbying efforts for repeal of the EEO-1 pat data reporting revisions specifically.[9]As a result, many believed that the new EEOC Chair and commissioners themselves would revisit the revised EEO-1’s fate during President Trump’s first ninety (90) days but ultimately it was the White House Office of Management and Budget that took the first action to eliminate the Obama administration-designed plan. On August 29, 2017, the Administrator of the Office of Information and Regulatory Affairs, under the OMB, issued an immediate “stay” of the new EEO-1 form and its pay data reporting requirements.[10]According to the OMB, the stay was necessary due to the alleged lack of opportunity for public comment, questions pertaining to inaccurate estimates of compliance burdens, and confidentiality issues associated with collecting and reporting the new information.

Acting chair of the EEOC, Victoria Lipnic, confirmed the same day that she had been notified by the White House that the new form was to be suspended indefinitely.[11]As a consequence, employers will not be required to fill out and submit the revised EEO-1 form that includes the comprehensive data relative to pay disparities associated with protected classes. The EEOC, however, cautioned that the March 31, 2018 date for submission of the traditional EEO-1 information would remain in place, and employers should be mindful of their continuing obligation to report to the EEOC.[12]

Noticeably, the language used by the OMB in issuing its “stay” of the new EEO-1 form does not indicate that the form will never be used, even though many analysts believe that Obama-era initiative is effectively dead. Nonetheless, it is notable that the EEOC issued statements following the form’s suspension to confirm that enforcing pay discrimination laws remains a priority for the Commission.

Accordingly, employers should be cognizant of the fact that the EEOC remains motivated to address the workplace discrimination issues with which it has been statutorily charged to eradicate regardless of a significant change in the tone coming from the White House. To that end, employers should strongly consider the inherent benefits (while certainly weighing the proportionate costs) of performing self-reviews and audits relative to pay disparity in the workplace, if for no other reason, to be prepared in the event the revised EEO-1 form comes back from exile.

If you have any questions regarding your company’s obligations under federal and/or state law for reporting the kinds of information discussed above, or if you are merely interested in discussing an audit of your company’s policies and procedures related to discrimination in the workplace, please contact a member of Reminger’s Labor & Employment Law Practice Group.

[1]Nancy Hammer, Potential Regulatory Rollback in the Works for Trump Presidency, SHRM.org(Dec. 2, 2016), https://www.shrm.org/hr-today/public-policy/hr-public-policy-issues/pages/potential-regulatory-rollback-in-the-works-for-the-trump-presidency.aspx.

[2]See id.

[3]The Commission requires private employers with more than 100 employees, as well as federal contractors/subcontractors with more than 50 employees, to annually report information on their employees’ sex and race/ethnicity on the EEO-1 Form.

[4]EEOC Press Release, Jan. 29, 2016,EEOC Announces Proposed Addition of Pay Data to Annual EEO-1 Reports, available at https://www.eeoc.gov/eeoc/newsroom/release/1-29-16.cfm. As EEOC Chair Jenny R. Yang stated, “Collecting pay data is a significant step forward in addressing discriminatory pay practices.”

[5]Christina A. Pate, New EEO-1 Report Finalized: Employers Required to Report Pay Data Starting with 2017 Report, The National Law Review (Oct. 3, 2016), http://www.natlawreview.com/article/new-eeo-1-report-finalized-employers-required-to-report-pay-data-starting-2017.

[6]Id.; see also Lisa Nagele-Piazza, New EEO-1 Form Requires Companies to Report Pay Data, SHRM.org (Sept. 30, 2016), https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/eeo-1-pay-data-.aspx.

[7]Brian Hamilton, Obama’s misguided rule to reduce pay discrimination, Politico(Nov. 29, 2016, 05:16 AM), http://www.politico.com/agenda/story/2016/11/obamas-misguided-rule-to-reduce-pay-discrimination-000242.

[8]Kevin McGowan, EEOC Chair to Stay On as Commissioner in 2017, BloombergBNA (Dec. 17, 2016), https://www.bna.com/eeoc-chair-stay-n73014448392/.

[9]See Stephania C. Sanon and Stephanie E. Lewis, Business Community Requests Rejection of Revised EEO-1 Report Requiring Disclosure of Pay Data, The National Law Review(May 1, 2017), http://www.natlawreview.com/article/business-community-requests-rejection-revised-eeo-1-report-requiring-disclosure-pay.

[10]Stephen Miller, White House Suspends Pay-Data Reporting on Revised EEO-1 Form, SHRM.org (Aug. 31, 2017), https://www.shrm.org/resourcesandtools/hr-topics/compensation/pages/revised-eeo-1-form-suspended.aspx.

[11]Id.

[12]The deadline for 2018 was subsequently pushed back further to June 1st; however, at present, it is believed that March 31stwill continue to be the reporting date for 2019 and beyond. See Equal Employment Opportunity Commission’s EEO-1 Reporting Committee, EEOC Instruction Booklet, March 2018, available at  https://www.eeoc.gov/employers/eeo1survey/2007instructions.cfm.