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September 12, 2019

EEOC May Abandon EEO-1 Compensation Data Collection After First Reporting Period

The Equal Employment Opportunity Commission (EEOC) is not currently seeking renewed approval to collect compensation data after its first and only reporting period, according to a notice published in the Federal Register on September 12, 2019.

As of now, private employers with 100 or more employees who submit the Employer Information Report (EEO-1) must also submit information regarding their employees’ 2017 and 2018 compensation data (known as Component 2 data) to the EEOC by September 30. The EEOC’s authorization from the Office of Management and Budget (OMB) to collect EEO-1 data for three years also expires on the same date.

OMB’s initial approval in 2016 to revise the EEO-1 report was highly controversial and raised significant employer concerns, including its burdensome reporting requirements. On August 29, 2017, the OMB halted the pending collection of Component 2 data by issuing a memorandum staying the initiative while it assessed its effectiveness. Among other things, the OMB contended the revisions to the EEO-1 report were unnecessarily burdensome on employers and did not adequately address privacy and confidentiality concerns.

Dormant until March 4, 2019, the reporting requirements were unexpectedly reinstated by the U.S. District Court for the District of Columbia’s decision in National Women’s Law Ctr. v. OMB, Civil Action No. 17-2458 (D.D.C.). The court vacated the OMB stay and subsequently ordered employers to report two years of their employees’ W-2 wage information and total hours worked in 12 pay bands by gender, race and ethnicity on the new Component 2 of the EEO-1 report. The court also declared that approval for the revised EEO-1 report including Component 2 data shall expire no later than April 5, 2021. Pending appeal, the EEOC scrambled to comply with the court’s orders, ultimately using the University of Chicago’s National Opinion Research Center (NORC) to collect the pay data.

In the interim, the EEOC re-examined its methodology for calculating the burden of collecting EEO-1 data and concluded that it was inaccurate, resulting in an extremely low estimate of the burden on employers. As a result, the EEOC will further consider information from the ongoing Component 2 data collection before deciding whether to submit a pay data collection to OMB. At this point, the EEOC is seeking to only renew Component 1 of the EEO-1.

Component 2 compensation data remains due for the current reporting period on September 30. And, the EEOC still intends to continue its future collection of the traditional Component 1 data regarding the gender, race and ethnicity of a reporting employer’s workforce.

We will continue to monitor and report developments on EEO-1 data as additional information is issued by the EEOC and the appellate court in National Women’s Law Ctr. v. OMB, No. 17-2458 (D.D.C.).

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