EEOC Yanks Its Pay Data Collection Efforts For Future Years

Yesterday, the EEOC announced that it does not intend to renew its request for authorization to collect employers’ pay data on the EEO-1 form in future years. The announcement comes less than three weeks before the September 30th deadline for employers nationwide to submit massive amounts of pay data for 2017 and 2018 (a deadline that is not impacted by the EEOC’s announcement).

The rollercoaster saga of the EEOC’s pay data collection (which we previously reported on including here, here, here, here, here, here, and here) began over three-and-a-half years ago when the EEOC announced in January 2016 its plan to revise the EEO-1 form to collect pay data (Component 2 data). The revised EEO-1 form requires employers to submit data on employees’ W-2 earnings and hours worked across broad job categories, and broken down by ethnicity, race, and sex. While the EEOC contends that the revised EEO-1 form will allow it to better assess pay discrimination, employers have expressed numerous concerns, including that the form may indicate “false positives,” as the broad EEO-1 job categories are not designed to group employees who perform similar work (as defined by federal and state equal pay and anti-discrimination statutes).

The Office of Management and Budget (OMB) initially approved the revised EEO-1 form on September 29, 2016, but following a change in administrations, it stayed implementation of the revisions in August 2017 on the basis that the earlier approval underestimated the burden on employers to comply, and therefore did not properly balance that burden against the revised form’s utility.

The next twist came when a federal district judge ruled earlier this year that the stay was “arbitrary and capricious” in violation of the Administrative Procedure Act, and reinstated the form’s implementation.  The Department of Justice appealed the district court’s decision, but the pay data collection for years 2017 and 2018 was not impacted or stayed as a result.

After scrambling to meet the pay data collection deadline for 2017-18 at the end of the month, yesterday’s announcement by the EEOC should come as a welcome surprise to employers who had anticipated needing to repeat the process next year. The reason for the announcement, the EEOC explained (echoing the OMB’s rationale for staying the collection in the first place), was that it had previously “insufficiently calculated what the burden would be [for employers] to submit data.”  It has no plans to seek renewal or re-authorization for pay data collection unless and until it determines the utility of this year’s pay data collection in its enforcement efforts, and would only consider doing so if the “utility of the data” outweighs “the burden the data collection . . . imposes on the employers who must submit it.”

Stay tuned for future updates on the EEO-1 form. In the meantime, the EEOC’s guidance regarding this year’s submission may be found here.