New EEO-1 Reporting Requirements Put on Hold Until Further Notice
Last year the Equal Employment Opportunity Commission (EEOC) issued a new EEO-1 form which, for the first time, would have required employers to submit extensive compensation data as part of its annual EEO-1 Report (in addition to workforce demographic already required). For those (understandably) struggling with these new requirements, you can now breathe a sigh of relief: the White House Office of Management and Budget (OMB) recently stayed implementation of the new EEO-1 form, meaning that – until we hear otherwise – these new requirements will not go into effect. Moreover, given the OMB’s authority over these matters and given its pro-business leanings, these new reporting requirements will probably never take effect, at least not under this administration.
Importantly – also until further notice — the revised filing deadline for all 2017 EEO-1 Reports remains March 31, 2018.
Despite the OMB’s intervention to stop these new requirements, employers should still understand what the EEO-1 form would have required in the event the OMB surprises everyone and allows the new requirements to take effect. Accordingly, here is the relevant background.
Every year, employers with 100 or more employees (and federal contractors with 50 or more employees) are required to submit an EEO-1 Report which includes various details about its workforce demographics, such as race, gender, and ethnicity. In addition to this demographics data, the new EEO-1 would have required employers to provide detailed compensation information about its employees.
This new pay information – according to the EEOC – would have helped identify and eradicate issues of pay inequity and pay discrimination. But various business and trade groups vehemently disagreed, claiming that there are numerous explanations of pay differences which could probably never be adequately explained through information submitted in the new EEO-1. These groups also complained about the substantial costs of compliance and potential violations of employees’ privacy rights, among other criticisms. Ultimately, the OMB heard these complaints and acted accordingly.
The OMB stayed the new EEO-1 requirements under authority provided by the Paperwork Reduction Act, which requires federal agencies to obtain OMB approval prior to collecting information from the public (including employers) so it can determine whether the benefit of the information outweighs the burden (in this case, the burden would include for example the additional compliance costs). The OMB is performing this utility and cost/benefit analysis as we speak, purportedly.
So what does this all mean for employers going forward? For one, employers must still comply with its EEO-1 reporting requirements, just as they have always done. For now however, the compensation sought by the new form need not be provided. In addition, as noted above, the new deadline for the collection period ending December 31, 2017 has not been changed – that date has been pushed back to March 31, 2018.
Finally, employers should stay tuned to see if OMB does a sudden 180 on this issue, and decides to implement the new reporting requirements. As noted above, this is unlikely, if not very unlikely. Indeed, the OMB has already indicated it seriously doubts the value of this information in identifying and eradicating pay inequity and discrimination (never mind the additional burden placed on employers).
…then again – as with all things employment law related – you never know. MEA will of course continue to monitor the situation, and will let you know if anything changes.
Ciana Williams, Esq., SPHR
MidAtlantic Employers’ Association
*This Alert is provided for general informational purposes only and does not constitute legal advice.