September 30 deadline to collect EEO-1 report pay data approved

On April 25, 2019, a federal judge in Washington D.C. issued an order requiring the Equal Employment Opportunity Commission (EEOC) to collect pay data broken down by the worker’s sex and race on the annual EEO-1 (Employer Information) report.

Background

The EEO-1 report is an annual government survey that must be filed by all private employers with 100 or more employees, and employers with federal government contracts of $50,000 or more who have 50 or more employees. Affected employers must provide a count of their employees by job category and then by ethnicity, race, and gender. The report has been required since 1966.

Component 2 pay data

In 2016, the EEOC aimed to revise the EEO-1 report to collect data on an employee’s W-2 (Wage and Tax Statement) earnings and hours worked in the 12 pay bands for each of the 10 EEO-1 job categories. This pay data is referred to as Component 2 and collection of it was to begin with the 2017 reporting cycle. However, in late-August 2017, the Office of Management and Budget (OMB) decided to initiate a review of stay for the Component 2 pay data.

The lawsuit

The National Women’s Law Center brought a lawsuit against the OMB for its prolonged review of stay for Component 2 pay data. On March 4, 2019, federal D.C. Judge Tanya S. Chutkan ordered that Component 2 pay data be included on the EEO-1 report and required the OMB to “fashion an appropriate remedy.”
On April 3, 2019, the OMB said Component 2 pay data could be collected by the EEOC by Sept. 30, 2019.

The judge’s order offers option to collect 2017 or 2019 pay data. On April 25, 2019, Judge Chutkan issued an order outlining the Component 2 pay data collection process. She ordered that Component 2 pay data must be collected for 2018 by Sept. 30, 2019. Judge Chutkan then gave the EEOC an option to collect Component 2 pay data for either 2017 or 2019. If the EEOC chooses to collect Component 2 pay data for 2017, that due date will be the same as the due date for the 2018 pay data (Sept. 30, 2019).

However, if the EEOC chooses to collect Component 2 pay data for 2019, instead of 2017, that collection must occur in the 2020 EEO-1 reporting period. The EEOC must notify the court and the NWLC by May 3, 2019 if it selects to collect Component 2 data for 2019. The order further requires the EEOC to issue a statement on its website and submit the same for publication in the Federal Register notifying EEO-1 report filers of the Sept. 30, 2019 deadline and also whether it will collect 2017 or 2019 pay data by April 29, 2019, or May 3, 2019, if the decision is not made by April 29, 2019.

At a minimum, the EEOC must notify EEO-1 filers by April 29, 2019 of the 2018 Component 2 pay data collection Sept. 30, 2019 deadline requirement.

Other requirements from the order

In addition, the court order’s the EEOC to provide the court and the NWLC all steps taken to implement the Component 2 pay data requirement and whether it is on track for the Sept. 30, 2019 deadline, beginning on May 3, 2019 and continuing every 21 days thereafter. Finally, the order requires the revised EEO-1 form that includes Component 2 pay data not to expire any later than April 5, 2021.

Concerns for meeting the deadline

The U.S. Chamber of Commerce and a number of employer groups submitted motion to file a summation of the April 16, 2019 hearing because the plaintiffs declined to allow the groups to participate in the April 16 hearing. In their motion, the employer groups noted the testimony of EEOC’s Chief Data Officer, Samuel C. Haffer that the proposed timeline did not account for the impact that the data collection would have on the employers and also that employers have not received key information required to conduct the collection of highly sensitive Component 2 data.

Camille Olson of Seyfarth Shaw LLP, representing the U.S Chamber of Commerce and a number of employer groups stated that: “Unfortunately, the court’s ruling did not appear to take into consideration the burdens/obstacles that employers face in complying with the September 30, 2019 deadline, and it does not appear that the court set the deadlines taking into account the perspective provided by the employer community through its amicus submissions on April 3 and on April 22 (by the US Chamber of Commerce and 11 other leading national industry, employer and human resources associations).”

As reported by Reuters, James Paretti, a shareholder at Littler Mendelson who represents employers said, “Many companies will have difficulty meeting the September deadline.” Paretti noted that the additional data collection may increase the burden on human resources personnel, possibly require the hiring of new staff or contractors.

Undue hardship exemption

Paretti, formerly chief of staff to the EEOC Commission from 2010 to 2018, also noted that there is an exemption available for “undue hardship” for smaller employers.

Extended due date for Component 1 data unchanged

Component 1 data has already begun collection on the EEOC website and employers must submit the EEO-1 survey by May 31, 2019. This deadline was extended due to the government shutdown in late-2018 to early-2019.