Category Archives: EEO-1 Reports

EEOC Says It Will Not Renew Pay Data Collection after September Submissions

Contributed by Allison P. Sues, September 19, 2019

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As employers scramble to meet the September 30, 2019 deadline to submit pay data for years 2017 and 2018, they can find some relief in knowing that the EEOC recently stated that it does not intend to collect pay data for 2019 or after at this time. According to the EEOC’s Notice of Information Collection, the EEOC will only request approval from the Office of Management  and Budget (OMB) to renew its collection of Component 1 data (demographic data), but will not seek approval to continue collection of Component 2 data (pay data and hours worked data). 

Since previously requesting approval from the OMB to collect pay data for 2017 and 2018, the EEOC has created the Office of Enterprise Data and Analytics, which developed a more accurate way to calculate the burden on employers when it comes to complying with EEO-1 filing requirements. The EEOC then concluded that it had previously underestimated the burden on employers in submitting pay data and hours worked data. Without knowing the true utility of the pay data collection, the EEOC has opined that the collection’s effectiveness in fighting pay discrimination is “far outweighed” by the burden that the collection imposes on employers.

This announcement does not affect the deadline to submit 2017 and 2018 pay data by September 30. It also does not affect employers’ continuing obligation to submit Component 1 demographic information, as the EEOC has made clear it intends to request approval to continue collecting this subset of data collection. The future of EEOC’s pay data collection is uncertain. For now, we know that the EEOC is not currently seeking to continue pay data collection. But, the agency did mention that if it ever decided to pursue data collection in the future, it would do so using the notice and comment rulemaking and public hearing process pursuant to Title VII. We will keep you posted

Register Today! EEOC Pay Data Collection and Other Equal Pay Issues – Complimentary Webinar

Join Allison Sues on Thursday, July 18 at 12:00 PM CT for a complimentary webinar as she guides employers on what they need to know before the pay data collection deadline. Employers who are EEO-1 filers must submit pay data for years 2017 and 2018 to the EEOC by September 30, 2019, as provided by the U.S. District Court for the District of Columbia’s recent ruling

Specific topics include:

  • The background of the EEOC’s efforts to collect pay data and the related case National Women’s Law Center v. U.S. Office of Management and Budget
  • Component 2 of the EEO-1 filings
  • Recent case law developments on the Equal Pay Act
  • Information on how to apply EPA precedent to employers’ audit of pay practices to avoid discriminatory pay claims

Who should attend? HR professionals, managers, and business owners

We hope you can join!

 

EEO Pay Data Update: Employers Must Submit Component 2 of the EEO-1 Reports for Both Calendar Years 2017 and 2018 by September 30, 2019

Contributed by Allison P. Sues, May 15, 2019

EEO-1 report filers should prepare to submit Component 2 pay data for both calendar years 2017 and 2018 by September 30, 2019. As we previously reported, the U.S. District Court for the District Court of Columbia previously ruled that employers must submit pay data for calendar year 2018 by September 30, 2019. In this ruling, the court also presented the EEOC with the option to either collect pay data for calendar year 2017 or calendar year 2019. The EEOC recently announced that it will collect pay data for calendar year 2017. Pay data for both 2017 and 2018 will be due September 30, 2019. 

The EEOC will begin collecting employer’s pay data for 2017 and 2018 beginning in mid-July 2019. Filers should continue to use the EEOC’s online portal to report Component 1 data of the EEO-1 reports, which is due by May 31, 2019 unless the employer has received an extension. 

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In light of the September 30 deadline, employers should begin preparing to submit their pay data – a new process that, for many employers, requires compiling information from two different systems if payroll records are maintained separately from a human resources information system.  Recent court rulings and EEOC decisions have created a bit of a moving target as employers work to comply with this new EEO-1 reporting obligation. While we await further information and guidance from the courts and the EEOC, it is helpful to look to the previously approved plan that the EEOC had in place in January 2016 prior to the OMB’s stay as a reference point:

  • Who needs to file Component 2 pay data?  EEO-1 filers with 100 or more employees (both in the private industry and federal contractors and subcontractors)
  • What pay data will be collected? The EEOC sought to collect aggregate W-2 data in 12 pay bands for the 10 EEO-1 job categories. The EEOC advised that employers “will simply count and report the number of employees in each pay band. For example, a filer will report on the EEO-1 that it employs 3 African American women as professionals in the highest pay band.” 
  • Will employers also need to report the hours worked by employees? Yes. The EEOC previously stated that hours-worked data will be reported to account for part-time and partial year employment. The EEOC indicated that it would allow employers to use a proxy of 40 hours per week for full-time employees who are exempt under the Fair Labor Standards Act if the employer does not maintain accurate records on hours worked for these employees.
  • Should employers track the staff time spent to collect and report this pay data? Yes. The EEOC had previously indicated that it would request employers to provide the amount of time spent on complying with Component 2 obligations in order to quantify this survey’s burden on employers. 
  • What will the EEOC do with this pay data? The EEOC has previously suggested that it will use the pay data to improve its enforcement efforts to combat pay discrimination, identify trends, and help employers assess their pay policies and practices. While the EEOC represented that EEO-1 pay data will not be used as the sole basis to find discrimination, the agency stated that the data will be used to better focus its resources and investigations, and that a finding of discrimination could come after an investigation. Employers should audit their pay practices in advance of submitting the EEO-1 pay data. Following the audit, employers should remedy any pay inequities for female or minority workers completing the same work as others outside their protected classes, if the disparate pay cannot be easily explained by a legitimate, lawful reason.

Employers, Get Ready! D.C. Court Rules That EEOC Must Collect EEO Pay Data by September 30, 2019

Contributed by Allison P. Sues, May 1, 2019

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On April 25, 2019, the U.S. District Court for the District of Columbia ruled that employers must submit pay data by September 30, 2019. For a more detailed background on the case at issue, National Women’s Law Center v. Office of Management and Budget (OMB), please see our blog from last month. As a brief background, years ago the U.S. Equal Employment Opportunity Commission (EEOC) set out to collect pay data from employers in an effort to identify and address pay discrimination against women and minority workers. The EEOC already collects data from employers regarding the sex, race, and ethnicity of employees in various job categories (Component 1 of EEO-1 report). In order to also collect pay data (Component 2 of EEO-1 report), the EEOC needed permission from the OMB.

The OMB initially approved the pay data collection, and then stayed its permission in 2017 bringing the EEOC’s pay data efforts to a halt. Women and minority workers advocacy groups filed a lawsuit in the D.C. Circuit court to vacate the OMB’s self-imposed stay. In ruling on motions, the court asked the EEOC to provide guidance on an acceptable deadline by which it would be able to implement collecting pay data from employers. The EEOC said it would not be able to collect this data any earlier than September 30, 2019, and in doing so would need to rely on an outside contractor to perform the data collection.

On April 25th 2019 Court Order requires the EEOC to do the following:

  • The EEOC must collect EEO-1 Component 2 pay data for calendar year 2018 by September 30, 2019.
  • In addition to the pay data for calendar year 2018, the court ordered that the EEOC must either collect:
    • EEO-1 Component 2 pay data for calendar year 2017 by September 30, 2019; OR
    • EEO-1 Component 2 pay data for calendar year 2019 in the 2020 EEO-1 reporting period.

The EEOC must alert the court by May 3, 2019 if it elects to collect 2019 pay data in lieu of 2017 pay data. 

  • The court ordered that OMB’s approval of EEOC’s pay data collection shall expire on April 5, 2021.

Stay tuned as the EEOC is expected to provide further guidance on its pay data collection soon.  In the meantime, employers should plan on submitting Component 2 of the EEO-1 reports for calendar year 2018 by September 30, 2019, and ensure that it submits Component 1 of the EEO-1 reports for calendar year 2018 by May 31, 2019. 

Update on the EEO-1 Pay Data Reporting

Contributed by Allison P. Sues, April 8, 2019

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On April 3, 2019, the EEOC informed a federal district court that the earliest it could complete its collection of pay data from covered employers as part of their EEO-1 data reporting obligations is September 30, 2019. The court still needs to rule on the EEOC’s proposed plan and, therefore, employers have not received a final deadline by which to file the required pay data. However, this filing brings employers one step closer to an answer for an issue that has caused them justified concern given the significant time and resources that will be needed to collect this pay data. 

Here is a quick refresher on the course of events that led up to the EEOC’s April 3 filing:

  • Since 1966, the EEOC has required covered employers to submit an Employer Information Report EEO-1 form, providing data on the number of individuals employed by job category, sex, race, and ethnicity (known as Component 1 of the EEO-1 report). More information on Component 1 reporting can be found in one of our previous blog posts.
  • In 2010, the EEOC commissioned a study to identify ways to improve prohibiting pay discrimination and found that there was potential value in collecting pay data in connection with the EEO-1 reports.
  • In order to collect this type of data, the EEOC needed approval from the Office of Management and Budget (OMB). In September 2016, the OMB approved the EEOC’s proposed collection of pay data (known as Component 2 of EEO-1 reports). Under this approval, employers would first be required to submit the required pay data by March 2018.
  • In August 2017, the OMB stayed the implementation of Component 2 of the EEO-1 reports, with instructions that employers still comply with Component 1 reporting requirements. 
  • In November 2017, two non-profit organizations that advocate for equal pay for women and Latino workers filed a lawsuit, National Women’s Law Center et al. v. OMB et al., challenging the stay in the U.S. District Court for the District of Columbia. 
  • In March 2019, the court vacated OMB’s stay of the Component 2 reporting requirement and provided that the OMB’s prior approval of the EEOC’s collection of pay data “shall be in effect.”
  • The court then asked the EEOC to propose how it would undertake and close the collection of pay data now that Component 2 requirements are back in effect. 

That brings us to the EEOC’s recent April 3 filing. The EEOC informed the court that its current data processes are not capable of collecting employers’ Component 2 data.  Instead, the EEOC will need to rely on an outside data and analytics contractor. The EEOC warned that an expedited collection of this pay data may produce poor quality data for the 2018 calendar year, and that quality concerns will be compounded if employers are also required to provide pay data for calendar year 2017. The court still needs to decide several unanswered questions, such as when employers need to submit their pay data, when the EEOC needs to complete its data collection, and whether employers need to submit pay data for 2017. Check back on this blog for updates.

In the meantime, all employers should ensure that they meet the May 31, 2019 deadline for providing Component 1 of the EEO-1 reports and begin the significant effort of preparing the pay data that will ultimately need to be submitted.   

Employers May Soon Be Required To Report Pay Information in Their EEO-1 Reports

Contributed by Debra Mastrian

Employers, including federal contractors, who are required to file annual Employer Information Reports (also known as EEO-1 reports) with the U.S. Equal Employment Opportunity Commission (EEOC) and the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP), may soon have additional reporting requirements. Currently, employers with more than 100 employees and certain federal contractors with 50-99 employees, have to report the number of full-time and part-time employees by sex, race, ethnicity and job category on their EEO-1 reports.

CashThe EEOC recently announced a revision to the EEO-1 report to add aggregate pay data on pay ranges and total hours worked for employers, including federal contractors, with 100 or more employees. Federal contractors with 50-99 employees would not report the aggregate pay data but would continue to report the other required information. The announcement was made on January 29, 2016 at the White House Equal Pay Event commemorating the anniversary of the Lilly Ledbetter Fair Pay Act. The Chair of that event noted that the EEOC has made equal pay a national priority.

The proposed revision was made after commissioning independent studies and gathering input from various sources. The EEOC and the OFCCP will use the information to detect pay discrimination and trends in occupations and industries. The federal agencies also believe the information will help employers assess their own pay practices.

The pay data would be based on employees’ W-2 earnings. For each of the defined EEO-1 job categories (Executive/Senior Level Officials and Managers, First/Mid-Level Officials and Managers, Professionals, Technicians, Service Workers, etc.), employers would have to include the number of employees by sex, race and ethnicity that fall in certain defined pay bands. In determining which pay band is appropriate, employers would use employees’ total W-2 earnings for a 12-month period looking backward from a pay period between July 1st and September 30th. The total number of hours worked by the employees in each pay band would also be reported.

The EEOC and OFCCP plan to develop statistical software to analyze the reported data. It is not yet clear what will be considered as a discriminatory pay practice. Perhaps most concerning to employers is that non-discriminatory factors (such as differences in experience or education) will not be reflected in any statistical analysis because, under the current proposed rule, there is no provision for collecting that information.

The proposed revision, which is available on the Federal Register website, was published on February 1 and is open for public comment through April 1. The EEOC will consider any public comments and hold a public hearing before publishing the final rule.  The final rule would take effect for the September 2017 EEO-1 reports.