On September 30, 2020, California Governor Gavin Newson signed SB 973, making California the first state to require employers to submit employee pay data by race and gender. As we previously reported, SB 973 is modeled after the now discontinued federal EEO-1 pay data collection form, which was harshly criticized for its heavy burden on employers and lack of utility in assessing for pay equity or pay discrimination (see prior Equal Pay Pulse blogs here, here, here, and here).
In the wake of the Black Lives Matter movement and a nationwide push towards greater equality, transparency and accountability, the California legislature this week passed a bill (SB 973) that would establish at the state level the equivalent of the EEOC’s discontinued EEO-1 pay data collection form. If signed by Governor Newsom, SB 973 would require that starting March 31, 2021 every California employer with 100 or more employees who files a federal EEO-1 report must annually submit a pay data report to the California Department of Fair Employment and Housing (“DFEH”) that discloses: (1) the number of employees by race, ethnicity, and sex in each of ten broad job categories, and (2) the number of employees by race, ethnicity, and sex whose annual earnings (defined as W-2 income) fall within each of the pay bands used by the United States Bureau of Labor Statistics in the Occupational Employment Statistics survey. Employers with multiple establishments must submit a consolidated report, as well as a report for each establishment. READ MORE
On July 16, the EEOC announced plans to fund an independent study to evaluate pay data submitted by employers for fiscal years 2017 and 2018 through Component 2 of the EEO-1 form, both to inform potential next steps for the data, as well as to guide any potential future collections. As we reported last March, after a tumultuous history, the EEOC decided against renewing its request for authorization to continue collecting pay data under Component 2 of the EEO-1 form, which reflected employees’ W-2 earnings and hours worked across broad job categories, broken down by gender, ethnicity, and race. The EEOC’s decision in March ended a four-year saga – including litigation – over whether the pay data collection would go forward at all. Much of the controversy stemmed from critiques that the burden and confidentiality concerns implicated by the Component 2 submissions outweighed any potential benefit, particularly given the form’s reliance on W-2 earnings (as opposed to base pay or total compensation awarded for work performed in a given year), combined with the breadth of the pay bands and job categories used, as well as the inability for most employers to accurately track or report hours worked by exempt employees (as we reported here, here, here, here, here, here, here, here, and here). Despite last March’s announcement, the EEOC has not stated whether or how it plans to use the data it already has collected. READ MORE
Today, the EEOC formally confirmed that it will not renew its request for authorization to collect employer’s pay data under Component 2 of the EEO-1 moving forward. The notice is consistent with its announcement last September, marking the end of a four-year saga over whether the pay data collection would go ahead (as we reported here, here, here, here, here, here, here, here, and here). Notably, the notice does not explain how the EEOC intends to use the pay data it already has collected, although it makes reference to using it in Title VII proceedings. It does, however, confirm the EEOC’s intentions regarding sharing the EEO-1 pay data, including that the EEOC does not intend to share it with the Office of Federal Contract Compliance Programs (“OFCCP”), but under certain circumstances may share it with state and local fair employment practices agencies (“FEPAs”). The notice also provides guidance regarding a potential pay data collection by the EEOC in the future, including that the EEOC intends to “develop a plan for using pay data before initiating any data collection.” READ MORE
As you’ll recall from our extensive coverage of the EEO-1 pay data collection saga (which we previously reported on here, here, here, here, here, here, here, here, and here), private employers, including federal contractors, have been busy collecting and submitting EEO-1 pay data to the EEOC. The deadline for submissions was initially set for May 31, 2019, but has since been extended multiple times. Earlier this month, U.S. District Court Judge Tanya S. Chutkan ruled that the EEOC must continue its collection efforts until it has collected from at least 98.3% of eligible reporters and must make all efforts to do so by January 31, 2020. READ MORE
Last week, U.S. District Court Judge Tanya S. Chutkan ruled that the EEOC may not discontinue its pay data collection efforts on November 11, 2019, but rather, must continue its collection efforts until it has collected from at least 98.3% of eligible reporters and must make all efforts to do so by January 31, 2020. The ruling is the latest in a lengthy saga regarding whether EEO-1 Component 2 pay data (data on employees’ W-2 earnings and hours worked across broad job categories, and broken down by ethnicity, race, and sex) would be collected—a saga that began with the Office of Management and Budget staying collection efforts, and culminated last Spring when Judge Chutkan ruled the decision to stay the collection lacked the reasoned explanation required by the Administrative Procedure Act (see overview here). After vacating the stay, Judge Chutkan initially set the deadline for data collection for May 31, 2019, but later extended it to September 30, 2019. READ MORE
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). READ MORE
This summer, California pay data reporting bill SB 1284 appeared to be progressing quickly through the legislature, until it was tabled by the Assembly Appropriations Committee on August 16, 2018. The bill, which we reported on earlier this year, would have required employers with 100 or more employees to annually report pay data from employees’ W-2 forms for specified job types and pay bands, broken down by sex, race, and ethnicity. The bill passed the Senate, and was working its way through the Assembly, where it was amended earlier this month. READ MORE
This month, the California Senate held a hearing regarding SB 1284, which would require California employers with at least 100 employees to annually report certain demographic pay data to the Department of Industrial Relations (DIR). Notably, this bill was sponsored by Senator Hannah-Beth Jackson, who also sponsored California’s Fair Pay Act (FPA) (on which we previously reported here, here, here, and here). It was also introduced just a few short months after the Office of Management and Budget’s memo mandating a review and immediate stay of similar reporting requirements at the federal level for the Equal Employment Opportunity Commission (EEOC)’s revised EEO-1 form. The California Senate Judiciary Committee has explained that SB 1284 is “modeled closely” on the revised EEO-1 form. As a result, it suffers from similar flaws. READ MORE
Yesterday, the EEOC announced that it had finalized a regulation that will increase disclosure requirements regarding employee compensation for thousands of businesses. The new rule, which we’ve blogged about previously, requires all businesses with 100 or more workers to submit pay data by gender, race and ethnicity on their EEO-1 forms. Specifically, employers will now need to provide: