Federal Court Reinstates Reporting Of Compensation Data On EEO-1

Private employers with more than 100 employees must annually file a report with the U.S. Equal Employment Opportunity Commission (EEOC) known as the EEO-1. The window for filing the EEO-1 opens on March 18, 2019 and will close on May 31, 2019. The EEO-1 has historically required company disclosure of workforce data categorized by race/ethnicity, gender and job category. The EEO-1 has not required companies to report their compensation data, but that could change.

In July of 2016, the EEOC sought approval to revise the EEO-1 form in order to collect additional information regarding compensation data. The Office of Management and Budget (OMB) approved the revised EEO-1 in September of 2016 and the EEOC was slated to begin collecting compensation data for the year 2017 that companies would begin to report on their EEO-1 filing in 2018. The Obama Administration sought to expand the EEO-1 survey to include employee compensation data to better assess allegations of compensation discrimination. The new reporting of compensation data would have collected information regarding employee W-2 wages and hours worked by employees within 12 pay bands and further broken down by job category, race/ethnicity, and gender.

You may recall, however, in late 2016 there was a national election and in early 2017 there was a change in the administration of the executive branch.  A change in executive branch administrations begets change in the leadership of executive branch agencies, and so began changes in leadership and policy at OMB and the EEOC. In August of 2017, in consultation with the EEOC, the OMB announced that it was conducting a review of the EEO-1 form and issued a stay on the collection of compensation data that was to begin in March of 2018. 

In November of 2017, the National Women’s Law Center (NWLC) sued the OMB and EEOC, primarily alleging the federal government exceeded statutory authority by staying the collection of compensation data as part of the EEO-1. In effect, the NWLC sued the federal government to reinstate the collection of private employer reporting of workforce compensation data.

On March 4, 2019, the U.S. District Court in Washington, D.C. agreed with the NWLC. The District Court denied the federal government’s motion to dismiss and vacated the stay of the EEOC’s revised EEO-1 form. The Court ordered that the previously approved EEO-1 form (the form requiring private employer workforce compensation data) be in effect. [See National Women’s Law Center v. Office of Management and Budget, et al, Civil Action No. 17-cv-02458-TSC.] In practical terms, the Court’s decision means that employers will be required to report their workforce compensation data on the EEO-1 before May 31, 2019.

What should an employer do with regard to the filing of their EEO-1?

As of today, the EEOC has provided no information regarding the court decision (noted above), whether the EEO-1 form will be amended, or what information employers will be required to submit this year.

The Court’s ruling in the National Women’s Law Center noted that companies have been on notice for years that this requirement was coming and should be more than ready to comply. The only problem with that is that lower court rulings on subjects involving political ideology, policy, or the powers and responsibilities of the separate branches of government are impossible to predict and predictably appealed.    

With the stay of compensation data in effect last year, most employers have not collected the data to report on this year’s EEO-1 report (of 2018 data). Also, the larger the employer, the more difficult it is to comply. 

Since the EEOC has thus far remained silent on the Court’s ruling, it is likely that the government will appeal the court’s decisions. It is also likely that an employer that cannot collect the compensation data in time will file suit seeking to delay the reporting of compensation data. 

While no one can predict how a court will decide, employers required to file an EEO-1 would be advised to immediately begin an analysis of their internal data and develop a plan to collect their employee compensation data (which is often tracked separately from the normal demographic data) on the EEO-1. Depending on the size of the company, some may want to be proactive in the collection and reporting of the data. Others may want to proceed with a plan but take more of a wait-and-see approach. Since the ruling is likely to be appealed or challenged, and since the EEOC will have to eventually provide some clarity on the topic, the maxim of “stay tune – there is more to come” could not be more applicable.

Please contact Dean & Fulkerson if you have questions as to how to implement a plan, collect compensation data, or ensure compliance with EEO-1 reporting.
Employment and Labor Law at Dean and Fulkerson