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White House Budget Office Suspends EEO-1 Pay Data Reporting Requirement

Employers are now relieved of the requirement to include employee compensation information on EEO-1 reports.

On August 29, the Office of Management and Budget (OMB) suspended the EEO-1 pay data collection and reporting requirement that the US Equal Employment Opportunity Commission (EEOC) had announced in 2016 and planned to implement next year. The reporting requirement would have required employers with 100 or more employees to include employee compensation information on next year’s EEO-1 reports, including details about employee wages and hours worked. Pursuant to OMB’s decision, employers are now relieved of that requirement and will instead need to submit only ethnicity, race, and sex data, as required under the pre-existing version of the EEO-1 form.

An “Unnecessarily Burdensome” Requirement

The EEOC first published a proposal concerning changes to the EEO-1 reporting requirements in February 2016. Under that proposal, employers with 100 or more employees were required to include two categories of information in their annual EEO-1 reports. First, consistent with the pre-existing requirement that remains in effect, employers would submit ethnicity, race, and sex data by job category. Second, under the now-suspended pay data requirement, employers would have been required to collect and submit data regarding employees’ W-2 earnings and hours worked. The proposal was received with a mixed reaction, including strong opposition from Republican lawmakers and the US Chamber of Commerce. Foremost among the complaints of opponents were the potentially significant administrative burdens and privacy concerns posed by the collection and reporting of employee payroll information.

On Tuesday, OMB—which operates within the Executive Office of the President of the United States—informed the EEOC that it was implementing a review and immediate stay of the pay data collection aspects of the EEO-1 reporting requirements. In a letter to EEOC Acting Chair Victoria Lipnic, OMB stated that the pay collection and reporting requirements “lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.” In a subsequent statement, Ms. Lipnic stated that she hoped OMB’s decision to suspend the pay reporting requirement would “prompt a discussion of other more effective solutions to encourage employers to review their compensation practices to ensure equal pay and close the wage gap.” She also reiterated the EEOC’s commitment to “strong enforcement of our federal equal pay laws,” saying, “Today’s decision will not alter EEOC’s enforcement efforts.”

Following OMB’s decision to immediately stay the pay data reporting requirement, employers are no longer required to collect and report to the EEOC the wages and hours worked of their employees. Importantly, however, employers must still comply with the pre-existing EEO-1 reporting requirements concerning ethnicity, race, and sex data. Employers must report those data to the EEOC by March 31, 2018.

Copyright © 2018 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

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About this Author

Krissy A. Katzenstein, Morgan Lewis, Labor and employment attorney
Partner

Krissy A. Katzenstein represents employers in a wide range of employment disputes, with a focus on class and collective actions involving systemic discrimination claims and complex multi-plaintiff matters. She also has experience handling a variety of single plaintiff matters involving discrimination and harassment claims, FLSA and state wage and hour claims, and Family Medical Leave Act claims. In addition, Krissy regularly works with clients on large internal investigations involving sensitive allegations.

202.739.5651
Grace Speights, Morgan Lewis, employment attorney
Partner

Grace E. Speights handles high profile and high stakes workplace matters for many clients and is often called upon by clients for crisis management assistance. She defends clients against employment discrimination claims—particularly class claims—and claims of discrimination in public accommodations. Grace represents clients in systemic investigations and litigation brought by the Equal Employment Opportunity Commission (EEOC). She also counsels on best practices for corporate diversity initiatives. Grace is the leader of the firm’s labor and employment practice, managing more than 250 lawyers across the firm.

202-739-5189