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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 © 2017 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

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About this Author

Krissy A. Katzenstein, Morgan Lewis, FMLA Matters lawyer, Employment Leave Litigation Attorney
Associate

Krissy A. Katzenstein advises and defends corporate clients facing discrimination, retaliation, Family and Medical Leave Act (FMLA), and wage and hour claims. Krissy’s practice focuses on class action and multiparty cases. She also has experience defending against systemic cases at the agency level as well as in US state and federal courts. As well, Krissy advises clients on diversity-related projects and internal audits aimed at promoting inclusive work environments and identifying meaningful diversity initiatives.

202.739.5651
Grace Speights, Morgan Lewis, employment discrimination attorney, corporate law
Partner

Grace E. Speights defends clients against employment discrimination claims—particularly class claims—and claims of discrimination in public accommodations. She also counsels on best practices for corporate diversity initiatives. With litigation and trial experience, Grace has represented clients in the financial services, pharmaceutical, retail, defense, transportation, medical device, and technology industries before US federal courts nationwide and local courts in the DC metropolitan area. She also represents clients in systemic investigations and litigation brought by the Equal Employment Opportunity Commission (EEOC). Grace is Co-Managing Partner of the Washington, DC, office.

Grace remains active in bar association activities and takes on multiple management roles for the firm. She serves as co-chair of Morgan Lewis’s systemic employment litigation practice and co-chair of its Diversity Committee. A member of the firm’s Compensation Committee, she has held a range of recruitment and management roles. Grace served as a member of the firm’s Advisory Board, the Legal Personnel Committee, the Washington Office Management Committee, and as deputy assistant manager of the litigation section of the firm’s Washington office. She also served as chair of the Washington office’s Recruiting Committee.

202-739-5189