On Aug. 29, 2017, U.S. Equal Employment Opportunity Commission (EEOC) Acting Chair Victoria Lipnic announced that the Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA) is initiating a review and immediate stay of the new EEO-1 pay reporting requirements scheduled to take effect with the next filing cycle in March 2018.
As previously reported (see “EEOC’s Revised Annual Collection of Pay Data on EEO-1 Forms”), in 2016 EEOC revised the standard race and gender EEO-1 data reports that certain employers with 100 or more employees must submit annually to the federal government. These revisions required each covered employer to:
- change the “snapshot” data collection period for reporting to Oct. 1 – Dec. 31;
- change the EEO-1 filing deadline for 2017 to March 31, 2018; and
- submit new, detailed W-2 compensation and hours-worked data (i.e., “Component 2” pay data) for its entire workforce, divided into 12 separate pay bands designated by EEOC.
The extreme administrative burden and expense caused by the new pay reporting obligations has been the source of much debate in the business community. As Chairwoman Lipnic stated on Aug. 3, 2017 (see “Acting EEOC Chair Addresses Status of EEO-1 Reporting Changes, Other Issues”), the new EEO-1 “pay transparency” report is “the poster child for the kind of regulation that the president campaigned against.” Chairwoman Lipnic also noted that, given this, she sent a memorandum to the new head of OIRA, Neomi Rao, stressing that “time is of the essence” if the pay reporting requirement is to be suspended pending further review.
Acting on this request, on Aug. 29, 2017, the EEOC announced that OIRA Administrator Rao informed the EEOC “via a memo” that OMB “is initiating a review and immediate stay of the effectiveness of the pay data collection aspects of the EEO-1 form that was revised on September 29, 2016, in accordance with its authority under the Paperwork Reduction Act (PRA).”
According to OMB, the stay is based, in part, on the following:
- “[S]ince approving the revised EEO-1 form on September 29, 2016, OMB understands that EEOC has released data file specifications for employers to use in submitting EEO-1 data. These specifications were not contained in the Federal Register notices as part of the public comment process nor were they outlined in the supporting statement for the collection of information.”
- “EEOC’s burden estimates did not account for the use of these particular data file specifications, which may have changed the initial burden estimate.”
- “OMB has also decided to stay immediately the effectiveness of the revised aspects of the EEO-1 form for good cause, as we believe that continued collection of this information is contrary to the standards of the PRA. Among other things, OMB is concerned that some aspects of the revised collection of information lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.”
This is excellent news for employers and comes before the start of the new 2017 EEO-1 reporting “snapshot” period, which is helpful. Thus, in light of the EEO-1 pay reporting stay, employers should note the following:
- Per the EEOC, “[t]he previously approved EEO-1 form which collects data on race, ethnicity and gender by occupational category will remain in effect.”
- The EEOC also announced that “[e]mployers should plan to comply with the earlier approved EEO-1 (Component 1) by the previously set filing date of March 2018.” In other words, there is no change to the 2017 EEO-1 report filing deadline of March 31, 2018.
- OMB’s administrative suspension of the EEO-1 “Component 2” pay reporting requirements does not change the upcoming Sept. 30, 2017 VETS 4212 filing deadline for applicable federal contractors and subcontractors.
Should you have any questions about the EEO-1 pay reporting suspension or federal employment compliance obligations generally, please contact the author, your McGuireWoods contact, or a member of the firm’s affirmative action or labor and employment teams.