In an April 3, 2019 filing in the federal district court that had ordered reinstatement of EEO-1 pay data reporting requirements, the Equal Employment Opportunity Commission (EEOC) explained its inability to comply with the court’s ruling on its present timeline, stating that it would be able to comply on an extended timeframe. Specifically, the EEOC informed the court that it would not be able to collect compensation data from employers (the so-called “Component-2” of the EEO-1 form) by May 31, 2019, but that, via the use of private contractors, the agency would be able to collect such data (for calendar year 2018) by September 30, 2019.  The EEOC further informed the judge that an attempt to collect two years of data (2018 and 2017 retrospectively) would likely result in decreased response rates and an unacceptable risk to the quality of data received.

The use of a third party to collect and hold such sensitive data is of obvious concern to employers.  Employers trust EEOC to maintain the confidentiality of their data because Section 709(e) of Title VII makes it a crime for any officer or employee of the EEOC to make EEO-1 data public.  Whether the EEOC can properly comply with this congressional mandate to maintain confidentiality while delegating the collection process to a third party is not clear.

Notably for employers, with respect to the traditional “Component-1” data (workforce demographics by job category, race, ethnicity, and gender), nothing is impacted by this filing.  The EEO-1 portal is open for the collection of Component-1 data, and employers should be preparing to submit that data in normal course to the EEOC by May 31, 2019.

Plaintiffs in the case have until Monday, April 8, 2019, to respond to the EEOC’s filing.  We expect the court to issue a ruling to address what data must be collected and when very shortly thereafter, and will provide updated information as we receive it.  It appears increasingly likely, however, that employers will be expected to file data on employee compensation and hours worked at some point this year. 

It is unclear whether the agency will ultimately seek to appeal the court’s ruling, and whether or when such an appeal may come.  Littler's Workplace Policy Institute (WPI) continues to analyze options with respect to the court’s earlier ruling; those interested in these efforts should contact any of the authors listed above.  

We will keep you apprised of relevant developments as we obtain further information. 

Background

This issue has its origins in an Obama administration decision to require employers to provide information on compensation and hours worked as part of their EEO-1 reporting.  This decision was widely criticized because of the burdens involved in reporting this data and the EEOC’s inability to establish that the data being requested would support any meaningful analysis.

Although the Office of Management and Budget (OMB) originally approved the revised EEO-1 report, it subsequently decided to stay and reconsider that decision in order to address these concerns.  OMB’s decision was challenged in a lawsuit brought by several advocacy groups and, on March 4, 2019, a federal district court judge vacated OMB’s decision to stay approval of the revised EEO-1 form.  The court then ordered the EEOC to explain how it was going to comply with the court’s apparent intention to require implementation of the revised EEO-1 survey.

In its April 3 filing, the EEOC acknowledged the burden to employers of having to compile and file Component 2 pay data and the inability of the Commission to collect and process such data as part of the 2018 EEO-1 reporting process.  Recognizing these obstacles to implementation of the reporting requirement, the EEOC stated that it would require employers to provide 2018 Component 2 data but give them until September 30, 2019 to file.  In addition, EEOC stated that it was not capable of collecting the Component 2 data itself and would, therefore, have to retain a data and analytics contractor to provide the processes, procedures, and systems to undertake and close the collection by September 30, 2019.  EEOC estimated that this endeavor would come with a cost to taxpayers in excess of $3 million.