New England Biz Law Update
The U.S. Equal Employment Opportunity Commission has begun the collection of payroll data broken down according to the sex, race and ethnicity of employees following the Trump administration’s loss of a legal challenge to reporting requirements adopted under President Obama.
On July 15, the commission announced the opening of its web-based portal for the collection of pay and hours worked data for calendar years 2017 and 2018. The portal is located here.
Employers, including federal contractors, are required to submit “Component 2” compensation data for 2017 and 2018 if they have 100 or more employees during the 2017 and 2018 workforce “snapshot” periods.
The workforce snapshot period is an employer-selected pay period between Oct. 1 and Dec. 31 of the reporting year. Federal contractors and other private employers with fewer than 100 employees are not required to report Component 2 compensation data.
In addition to the data collection portal available for all filers, the EEOC said a data file upload function and validation process is expected to be available no later than Aug. 15 as an alternative data collection method for employers who prefer to utilize data file upload capability.
Already mandated “Component 1” data simply groups employees by job category, race, sex and ethnicity. Component 2 data involves reporting hours worked and pay information from employees’ W-2 forms by race, ethnicity and sex.
The EEOC’s action is in conformity with orders entered earlier this year by U.S. District Court Judge Tanya S. Chutkan, who sits in the District of Columbia.
In her March 4 order in National Women’s Law Center v. Office of Management and Budget, Chutkan vacated a stay issued by the OMB on revised pay-data reporting guidelines announced by the EEOC in September 2016.
The revised guidelines for the first time required employers to report Component 2 data for a three-year trial period.
Under Chutkan’s orders, filers of the Employer Information (EEO-1) Report must submit Component 2 data for calendar years 2017 and 2018 by Sept. 30.
Before the 2016 revisions, the EEOC simply required employers to submit Component 1 data.
On Sept. 29, 2016, the EEOC announced that, beginning in March 2018, private employers with 100 or more employees — including federal contractors and subcontractors — would be required to report Component 2 summary pay data.
The agency said that the new requirements were designed to collect data to expose “persistent wage gaps” and “improve investigations” of possible pay discrimination.
The agency set March 31, 2018, as the initial deadline for employers to file using the revised form for the annual EEO-1 compliance survey.
However, the Trump administration made the revocation of the payroll reporting requirement a priority as part of its agenda of regulatory changes.
On Aug. 29, 2017, the OMB issued a stay of the revised EEO-1 reporting requirement, notifying the EEOC that it had commenced a regulatory review of the revisions the commission had adopted in 2016. On Sept. 15, 2017, the EEOC announced the stay and instructed employers to follow the old reporting requirements until further notice.
In November 2017, the National Women’s Law Center and the Labor Council for Latin American Advancement sued the OMB. The lawsuit alleged the OMB had exceeded its authority under the federal Administrative Procedure and Paperwork Reduction Acts by staying the collection of pay data as part of the EEO-1 filing requirement.
Chutkan found in her March 4 decision that the OMB’s September 2017 stay order was illegal in that it was not in accordance with the agency’s regulations and was otherwise arbitrary and capricious.
