Federal Judge Reinstates EEO-1 Pay Data Collection Requirement – Impact on Employers Still Unclear (US)
On March 4, 2019, a federal court issued an order lifting the stay implemented by the White House Office of Management and Budget (“OMB”) regarding the pay data collection component of the EEO-1 report, holding that the OMB failed to demonstrate good cause for the stay.
As we previously reported here, in 2016, the U.S. Equal Employment Opportunity Commission (“EEOC”) changed the pay data reporting requirements under the EEO-1 report, requiring employers with 100 or more employees to annually report employees’ IRS Form W-2 compensation information and hours worked. However, in 2017, following President Trump’s election, the OMB indefinitely stayed the deadline for employers to comply with the Obama-era revisions to the EEO-1 form, pending review of the potential burdens of such data collection under the Paperwork Reduction Act. (See our prior post here).
The stay remained in place until Judge Chutkan of the U.S. District Court for the District of Columbia released her March 4 order rejecting the OMB’s decision to stay the pay data collection requirement. The court reasoned that the OMB failed to prove either that relevant circumstances regarding the data collection had changed, or that the original burden estimates were materially in error. Further, the court held that the stay was arbitrary and capricious. Therefore, the judge ordered that “the previous approval of the revised EEO-1 form shall be in effect.”
The order leaves many open questions concerning how or when employers will be required to respond. The EEOC’s EEO-1 survey will open on March 18, 2019, and the deadline to submit EEO-1 data has been extended to May 31, 2019. It is still unclear whether the EEOC will require employers to submit the pay data information on that deadline, or if the pay data reporting will begin in a future filing cycle. Also, an appeal of the judge’s order lifting the stay is likely, and with that appeal could come a reinstatement of the stay. As this issue is ongoing, we will keep you updated as more developments arise.