In a move that will surprise few, the federal Office of Management and Budget (“OMB”) has “stayed” the upcoming EEO-1 compensation data reporting requirement, pending further review. As we previously wrote about here, in 2016, the Equal Employment Opportunity Commission (“EEOC”) implemented a rule requiring employers with 100 or more employees (and federal contractors with 50 or more employees) to include compensation data in their annual EEO-1 reports. Covered employers were already required to file an EEO-1 report tracking race/ethnicity and sex; the stay does not impact this requirement.
The pay data collection requirement has stirred controversy since it was first proposed by the Obama-era EEOC. Employers argued that collecting and reporting on comprehensive pay data would create an undue burden. In response, the government moved the proposed EEO-1 filing deadline from September 30, 2017, to March 31, 2018, to provide employers with additional time to comply with the new requirement.
Then, on August 29, 2017, the Office of Information and Regulatory Affairs (“OIRA”), a branch of the OMB, pressed pause on the compensation data requirement. In a memorandum to EEOC Acting Chair Victoria Lipnic, the OIRA wrote that some aspects of the new requirement “lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.” The memorandum directs the EEOC to submit a new information collection package for the EEO-1 form for the OMB to review.
So what should employers do until the stay is lifted? First, covered employers still must file a “traditional” EEO-1 form on March 31, 2018, with information on their employees’ race/ethnicity and sex. However, they are not required to file information on compensation data at this time. Employers can even use the updated EEO-1 form and simply leave the salary information blank. Second, companies should not discard their pay data information just yet, in case the government lifts the stay.
We will continue to track this development, so keep checking the blog for the latest updates!