As you may recall, in 2016, the Equal Employment Opportunity Commission (“EEOC”) issued a Rule requiring private employers with more than 100 workers to include certain pay data, based on gender, race, and ethnicity, on their Form EEO-1s. The Rule, which purportedly was aimed at encouraging employers to ensure that compensation was directly related to jobs being performed and as a means of combating pay disparities, was slated to go into effect with the filing of EEO-1 forms in March 2018.
Under President Trump, the Office of Management and Budget (“OMB”) blocked enforcement of the Rule and announced that decision in August 2017.
On March 4, 2019, Judge Tanya Chutkan of the United States District Court for the District of Columbia, in response to a 2017 lawsuit filed by advocacy groups including the National Women’s Law Center, issued an Opinion and Order directing that the OMB reinstate the EEOC’s 2016 pay reporting Rule. Judge Chutkan found that the “OMB’s decision to stay the collection of information totally lacked the reasoned explanation that the APA [Administrative Procedures Act] requires,” and therefore was not entitled to deference. The ruling faulted the agency’s justification for staying the rule, finding that it contradicted its own prior findings that collection of gender pay data was useful, that steps had been taken to minimize the reporting burden on employers, and that adequate privacy protections were provided.
Judge Chutkan’s March 4 ruling, if left undisturbed, would resuscitate the Rule, requiring the collection and reporting by large companies of aggregated W-2 data and hours worked in 10 job categories, across 12 pay ranges, for each of a company’s physical locations. At this time, there is no consensus on whether employers must comply with the reporting Rule by May 31, 2019, the recently extended deadline to annually report EEO-1 data. Given the Trump administration’s position, it seems likely that the OMB will appeal the decision and seek a stay pending an appellate ruling. If there is no appeal, it will be interesting to see if the EEOC will extend the deadline for the filing of 2019 EEO-1s, which must include the expanded pay data, beyond May 31. Our best advice is that covered employers should begin collecting the data requested by the Rule and be prepared to include it in their filings later this Spring. We will continue to monitor the situation and will provide updates as they become available.