Category Archives: EEOC

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. 

September 30. Vector flat daily calendar icon.

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

September 30. Vector flat daily calendar icon.

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

Flat 3d isometric business analytics, finance analysis

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.   

Supreme Court To Review Title VII’s EEOC Administrative Requirement

Contributed by Brian Wacker, February 4, 2019

Black and white gavel

In an important development for employers defending against discrimination claims across the country, the Supreme Court has agreed to review the Fifth Circuit’s ruling in Fort Bend County v. Davis on the viability of claims brought in federal courts where the claimant has not first filed her claim with the Equal Employment Opportunity Commission (EEOC).  There is currently a circuit split in federal appellate courts on this issue.  Regardless of which side the Supreme Court ultimately takes, the Court’s decision will have a critical impact on the steps a claimant must take prior to filing a federal lawsuit – and the employer’s bottom line.

Title VII of the Civil Rights Act of 1964 requires an employee to first bring his claims of employment discrimination with the EEOC prior to filing suit in federal court.  Known as the “exhaustion requirement,” courts have noted that its purpose is to give the EEOC the opportunity to investigate and resolve credible claims of discrimination, and also to provide employers fair notice and a chance to remedy complaints prior to litigation.

However, over time, the appellate courts have diverged on what the exhaustion requirement actually means.  Is it, as the majority of circuits (eight in total) have concluded: the exhaustion requirement is merely a prerequisite to bringing suit, and therefore subject to defenses of waiver and estoppel?  Or, is it as the minority of circuits (three in total) have read Title VII: that the exhaustion requirement implicates subject matter jurisdiction and therefore cannot be waived?

As the Petitioners in Fort Bend noted in their Petition for Writ of Certiorari, resolution of this split in the circuits “is profoundly important.”  They argued that, according to the EEOC’s own statistics, roughly 60,000 charges are filed with the EEOC under Title VII.  Therefore, if the Supreme Court determines these charges are non-jurisdictional, many claimants could be motivated to bring their claims directly in court, forgoing the EEOC and flooding the Courts with additional litigation. 

While that scenario may not be particularly likely, a Supreme Court decision holding the exhaustion requirement to be jurisdictional could have a significant benefit for employers defending against these claims.  Characterizing the exhaustion requirement as jurisdictional could provide employers an additional vehicle to seek dismissal of claims not supported by an EEOC charge much earlier in the course of litigation than might otherwise be possible.  Characterizing exhaustion as jurisdictional also means that employers could challenge whether exhaustion occurred later on in litigation—and even for the first time on appeal.  On the other hand, if the Supreme Court sides with the majority of federal appellate courts, employers may have less of an opportunity to resolve discrimination claims through the EEOC’s investigation and dispute resolution procedures—and without any litigation at all.  In short, if the exhaustion requirement is ruled not to be jurisdictional, employers could well be forced into immediately defending a host of additional – and costly – federal claims, which the “exhaustion requirement” was arguably designed to avoid.

There is no schedule yet for briefing and argument in Fort Bend.  However, we will continue to monitor the case and update as it progresses.  

The #MeToo Effect on Your Company

Contributed by Beverly Alfon and Allison Sues, November 13, 2018

#MeToo

#MeToo on white paper

As we draw closer to the end of 2018, let’s reflect a bit and look forward with purpose.  The U.S. Equal Employment Opportunity Commission (EEOC) recently released preliminary FY 2018 sexual harassment data that is consistent with the #MeToo movement:

  • Sexual harassment charges increased by more than 12 percent – the first increase in at least eight years;
  • EEOC focused on harassment claims and filed 66 harassment lawsuits; and
  • EEOC recovered nearly $70 million for sex harassment victims (up from $47.5 million in 2017).

These statistics do not include the many charges that individuals have filed with state agencies, internal complaints made with employers, lawsuits filed by employees in state or federal courts, or settlements of those claims.

These notable statistics come just one year after the EEOC released an online resource, Promising Practices for Preventing Harassment, in which the agency focused on a checklist of four core elements to “enhance employers’ compliance efforts” when it comes to addressing workplace harassment.

  • Leadership and Accountability – Consistent and demonstrated commitment of senior leaders to maintain a culture in which harassment is not tolerated. Such commitment should be demonstrated, by allocating workplace time to training on harassment, consistently disciplining any employees who harass others, and seeking out feedback from employees on the effectiveness of the employer’s anti-harassment measures.
  • Comprehensive and Effective Harassment Policy – Policy should be clear and communicated to all employees, at every level of the organization. The policy should explicitly apply to applicants and every type of employee, and must make clear that the employer will not tolerate harassment of employees by anyone, including customers, clients, or any other individuals at the worksite. The policy should be easily understandable and periodically reviewed and updated.
  • Effective and Accessible Harassment Complaint Systems – The system should welcome questions, concerns and complaints. It should encourage employees to report potential problems, and provide for prompt, thorough and neutral investigations. It should be flexible enough to allow employees to choose from multiple channels to make their complaint.
  • Effective Harassment Training – Employees need to be aware of leadership values, the policy and complaint systems.  Regular, interactive, and comprehensive training of all employees must be understandable and tailored to the specific workforce.

These guidelines are significant because they are issued by the federal agency that is charged with enforcing federal anti-discrimination laws – and courts are starting to take notice.  Under Title VII of the federal Civil Rights Act, even if an employee does not suffer an adverse employment action (e.g., demotion, termination, etc.), an employer can be held liable for harassment by a supervisor.  However, the employer may avoid liability if it can prove that (a) the employer exercised reasonable care to prevent/correct any harassment; and (b) the employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.  As a result, most employers have an anti-harassment policy in their handbooks for the purpose of defending against claims.  Recently, however, a federal appellate court acknowledged the existence of an employer’s anti-harassment policy, but specifically asked, “Was the policy in place effective?” In Minarsky v. Susquehanna County, No. 17-2646 (3d Cir. 2018), the plaintiff alleged that she had been harassed by her supervisor for a number of years. The district court granted summary judgment to the employer under the Faragher/Ellerth standard because she never complained to her employer about the harassment. However, the Third Circuit appellate court reversed and remanded the case based on evidence that although the supervisor was reprimanded twice and ultimately fired, the supervisor’s conduct toward the plaintiff was not isolated. Other employees previously complained about similar behavior by the supervisor, and the employer took no action in response. The court held that whether the employer took reasonable care to detect and eliminate the harassment and whether Minarsky acted reasonably in not availing herself of the employer’s anti-harassment safeguards should be decided by a jury. The mere existence of an anti-harassment policy and the plaintiff’s failure to make a complaint pursuant to that policy was not sufficient for the appellate court to uphold summary judgment for the employer.

On the legislative front, California, New York (both city and state), and Delaware, have passed laws that now require employers to train all employees on harassment prevention. New York City requires bystander intervention training. California has specific time and content requirements for its training. Notably, these all seem to be in line with what the EEOC’s Task Force on the Study of Harassment in the Workplace called for in its 2016 report and again in its 2017 compliance guide.  In this growing number of states and cities, employers are no longer allowed to shirk off training for fear of “stirring the pot,” or out of a reluctance to commit resources to anti-harassment efforts.

All of this points to is a rising legal standard for what will suffice to establish an affirmative defense for employers.  A dormant anti-harassment policy in the employee handbook will no longer cut it.

BOTTOM LINE:  In this period of heightened awareness, control what you can by fully implementing the terms of your anti-harassment policies so that your company is in its best defensible position when these harassment claims arise. While we understand that not all employers have the resources to devote to the loftier goals encouraged by the EEOC, there are three concrete steps that you can take to begin mitigating your risks:

  1. Confirm the last time that your company educated all employees on your anti-harassment policy and complaint procedures – and consider another round of training for all levels of employees;
  1. Seek a legal audit of your company’s complaint process;  and,
  1. Seek a legal audit of your company’s investigation procedures (i.e., whether best practices for investigation, documentation and follow-up are being utilized).

 

The Illinois Human Rights Act is Amended: Increased Filing Timeframes, Opt-Out Provisions, and a Restructured Commission. Oh, My!

Contributed by Julie Proscia, August 29, 2018

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Black and white gavel

On August 24, 2018 Governor Rauner signed PA 100-1066 into law thereby amending the Illinois Human Rights Act which revamps, and sometimes streamlines, discrimination complaints on the state level.  This legislation, effective immediately, comes after months of hearings and recommendations from both the Senate and House Task Forces on Sexual Misconduct.  I have had the privilege of sitting on the Illinois Task Force on Sexual Misconduct and take this opportunity to report on these amendments. During the course of the hearings, the Task Force heard testimony from business organizations, individual plaintiffs, and stakeholders regarding their concerns related to the current administrative system. The core discussions focused on changes that would give individuals the right to opt out of the administrative process, create parity between the filing of claims at the EEOC and the Illinois Department of Human Rights, and reduce the backlog of cases before the Illinois Human Rights Commission. The most significant amendments are:

  • The Illinois Human Rights Act is amended to increase the time frame that individuals have to file a charge, from 180 to 300 calendar days, from the date of the alleged civil rights violation;
  • Sets forth opt out provisions in which an individual may, within 60 days of filing a complaint with the Illinois Department of Human Rights, opt out of an investigation at the Illinois Department of Human Rights and proceed to circuit court; and
  • Restructures the Illinois Human Rights Commission in order to decrease the backlog of cases and theoretically prevent a backlog from occurring in the future. Effective January 2019, the Commission will, amongst other initiatives, be comprised of 7 full time members, as opposed to 13 part-time members, with dedicated staff attorneys and training for newly appointed commissioners.

So what does this mean for employers?  Some good, some bad, and some neutral.  The change from 180 to 300 calendar days is not a significant change, although on the surface it appears to be.  In the State of Illinois, an individual currently has, even before the new legislation, 300 calendar days from the date of alleged harm to file a charge with the EEOC.  As such, the new legislation creates parity in deadlines for filing between the state and its federal administrative counterpart.  The inclusion of opt out provisions can potentially increase the flow of discrimination litigation away from the administrative system, while the restructuring of the Commission is designed to decrease congestion.  In either scenario or design, prevention prior to this level of escalation is paramount.  Good policies, procedures, and annual training can reduce the likelihood of having to test the new amendments.

Sixth Circuit Says Transgender Discrimination is Protected Under Title VII

Contributed by JT Charron, March 15, 2018

Last week, the United States Court of Appeals for the Sixth Circuit held—for the first time—that discrimination based on transgender and transitioning status violates Title VII. Although the court has previously held that discriminating against transgender employees because of gender non-conforming behaviors constitutes gender stereotyping in violation of Title VII, this decision takes it one step further—protecting all transgender and transitioning employees regardless of any outwardly observable behaviors or characteristics.

36419114 - hand about to bang gavel on sounding block in the court room

 hand about to bang gavel on sounding block in the court room

In EEOC v. R.G. & G.R. Harris Funeral Homes, Aimee Stephens was fired by her boss—and owner of the funeral home—after she informed him that she was transitioning from male to female. After investigating Stephens’s complaint of sex discrimination, the EEOC filed a lawsuit claiming that the funeral home violated Title VII by terminating Stephens’s employment because of her transgender or transitioning status and her refusal to conform to sex-based stereotypes.

The sixth circuit court of appeals reversed the trial court’s decision in favor of the employer, holding that “[d]iscrimination on the basis of transgender and transitioning status is necessarily discrimination on the basis of sex.” In reaching this conclusion, the court rejected the funeral home’s argument that Title VII’s definition of “sex” does not encompass transgender status, finding that “it is analytically impossible to fire an employee based on that employee’s status as a transgender person without being motivated, at least in part, by the employee’s sex.” The court also cited the U.S. Supreme Court’s decision in Price Waterhouse v. Hopkins, which held that Title VII requires “gender to be irrelevant in employment decisions.” According to the sixth circuit, “Gender (or sex) is not being treated as irrelevant . . . if an employee’s attempt or desire to change his or her sex leads to an adverse employment decision.”

The court also rejected the Funeral Home’s argument that the Religious Freedom Restoration Act (RFRA) precludes the EEOC from enforcing Title VII against it here because doing so would substantially burden its religious exercise. Instead, the court held, as a matter of law, that:

  • “[A] religious claimant cannot rely on customers’ presumed biases to establish a substantial burden under the RFRA”;
  • “[T]olerating an employee’s understanding of her sex and gender identity is not tantamount to supporting it”; and
  • “[B]are compliance with Title VII—without actually assisting or facilitating Stephens’s transition efforts—does not amount to endorsement of Stephens’s views.”

Practical Impact

Employers in Michigan, Ohio, Kentucky, and Tennessee should immediately review and—if necessary—revise policies, procedures, application forms, or other documents to ensure that transgender status is referenced as a protected category. Employers should also consider providing training to managers and other supervisory personnel on how to appropriately respond when an employee indicates that they are transgender and/or transitioning.

The decision also has potential ramifications for employers across the United States. It is the third federal appellate court decision in the past 12 months holding that Title VII prohibits discrimination based on an individual’s LGBTQ status. The first came last year when the seventh circuit issued its decision in Hively v. Ivy Tech Community College of Indiana (as we previously blogged about), holding that discrimination based on sexual orientation is prohibited by Title VII. The second circuit reached the same conclusion on February 26, 2018, in Zarda v. Altitude Express. As courts take a more expansive view of Title VII’s protections, employers everywhere should take proactive measures to ensure they are complying with this evolving area of the law.