The Office of Management and Budget (OMB) has announced an immediate stay and review of an Obama-era policy requiring pay information to be included on form EEO-1. The revised form was set to take effect with the next filing cycle in March 2018.
The Equal Employment Opportunity Commission (EEOC) has always required companies to report data on the race and gender of their employees, but this impending new rule expanded that requirement to provide wage and hour data for the employer’s entire workforce, divided into 12 separate pay bands designated by the EEOC. The policy was applicable to private employers with 100 or more employees and federal contractors with 50 or more employees. By collecting data to identify patterns of pay discrimination across industries and occupations, the Obama administration had hoped the policy would help close the wage gap and ensure equal pay among all groups of people.
The Trump administration, along with the U.S. Chamber of Commerce and others, has stated its belief that the costs of the data collection program would outweigh the benefits, finding it would be too burdensome for employers and would not be effective enough in fighting wage discrimination to warrant those burdens. The OMB stated that the data collection lacks practical utility, is unnecessarily burdensome, and does not address privacy and confidentiality issues. The OMB further concluded that the revised form contained data file specifications that had not been included in the Federal Register during the public comment process.
Despite the suspension of the new policy, EEOC Chairwoman Victoria Lipnic stated that the EEOC “remains committed to strong enforcement of our federal equal pay laws” and hopes that this decision will “prompt a discussion of other more effective solutions to encourage employers to review their compensation practices to ensure equal pay and close the wage gap. I stand ready to work with Congress, federal agencies, and all stakeholders to achieve this goal.”
The practical upshot is that employers will continue to use the existing EEO-1 to comply with the next filing deadline.