Even as the deadline looms for employers of 100 or more workers to submit 2017 and 2018 pay data to the Equal Employment Opportunity Commission (EEOC), the EEOC has announced that they do not intend to renew this requirement for any years going forward.
As we reported in EEO-1 Pay Data is Now Due By September 30, the Obama Administration adopted “Component 2” of the EEO-1 report requiring the submission of comprehensive data on employee pay and hours worked to the EEOC. This required approval from the federal Office of Management and Budget (“OMB”), and approval was granted to obtain the data for years 2017 and 2018.
EEOC Says Never Mind
With the change in administrations in Washington, the OMB stayed the implementation of the Component 2 requirement but various advocacy groups sued in federal court to get the stay lifted. In April 2019, a federal district court judge concluded that OMB did not have a valid basis for blocking the implementation of the Component 2 requirement and ordered covered employers to submit the Component 2 data by September 30, 2019.
Meanwhile, OMB’s approval of the overall EEO-1 Report is set to expire at the end of this month. This prompted EEOC to file this week with OMB to renew their request to require completed EEO-1 reports (which require data on race and gender within designated job groupings). However, the EEOC request clarified that they are NOT seeking to renew the request for Component 2 data collection. This very likely signals the end of Component 2 reporting.
The EEOC explained their non-renewal of Component 2 reporting by noting that they are obligated to “balance the utility of the data it collects against the burden the data collection…imposes on the employers who must submit it.” The burden in this instance stems from their original prediction that the total cost for completing both Components 1 and 2 of the EEO-1 was between 53 and 54 million dollars. However, EEOC now says that their “more accurate methodology” for calculating the burden places it at over 600 million dollars for both 2017 and 2018. They concluded that the limited value of the Component 2 data did not justify this enormous expense for employers.
Accordingly, covered employers still need to meet the September 30 deadline for submitting the 2017 and 2018 data but after that, the coast seems clear.
The end result is that even though the current administration was not interested in the data, a court forced them to collect it anyway. It is unlikely that they will use the data and they do not intend to seek it in the future, meaning that all those employers who developed systems for collecting and sorting the data now find those systems already obsolete. To top it off, the total cost for this grand experiment was more than 10 times the original estimate.
One final kicker – the court decision finding that OMB did not have a valid basis for staying implementation of Component 2 data collection is still on appeal. If the Appeals Court does not find the issue moot, they could reverse the district court and conclude that OMB actually did have the right to stay implementation. This would mean that the Component 2 data that the administration did not want to collect should not have been collected at all, and that all of the time, effort and expense of collecting it could and should have been avoided.
What a long strange trip it’s been.