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EEOC sets September deadline for reinstated payroll reporting rules.

Byline: Pat Murphy

Large employers now must comply by Sept. 30 with once-shelved payroll reporting guidelines adopted during the Obama administration that require a breakdown of wages and salaries according to the sex, race and ethnicity of their employees.

The U.S. Equal Employment Opportunity Commission has announced the immediate reinstatement of the "Revised EEO-1: Pay Data Collection" guidelines.

"EEO-1 filers should begin preparing to submit Component 2 data for calendar year 2017, in addition to data for calendar year 2018, by September 30, 2019, in light of the court's recent decision in National Women's Law Center, et al., v. Office of Management and Budget, et al.," the EEOC stated in a notice posted on the agency's website May 2.

"Component 1" data simply groups employees by job category, race, sex and ethnicity. "Component 2" data involves reporting hours worked and pay information from employees' W-2 forms by race, ethnicity and sex.

In National Women's Law Center, U.S. District Court Judge Tanya S. Chutkan vacated a stay issued by the OMB on revised pay-data reporting guidelines announced by the EEOC in September 2016. The revised guidelines for the first time required employers to report Component 2 data for a three-year trial period.

Chutkan, who sits in the U.S. District Court for the District of Columbia, found in her March 4 decision that the OMB's September 2017 stay order was "illegal" in that it was not in accordance with the agency's regulations and was otherwise arbitrary and capricious.

On April 4, the government filed a submission proposing how it would undertake and close the collection of Component 2 pay data under the revised guidelines now back in effect under the judge's March 4 order.

In its filing, the government stated that the EEOC Acting Chair Victoria A. Lipnic "has determined that it is necessary to exercise her Title VII administrative authority to adjust the collection deadline to September 30, 2019, in order to accommodate the significant practical challenges for the EEOC to collect Component 2 data in response to the Court's Order."

Taking into account the "practicalities" of administering the reinstated reporting guidelines, in an April 25 order Chutkan directed the EEOC to "immediately take all steps necessary" to complete the EEO-1 Component 2 data collections for calendar years 2017 and 2018 by Sept. 30.

The judge further said that the government's decision to stay the revised reporting guidelines had the effect of tolling the three-year trial period. Accordingly, the judge declared that approval for the revised EEO-1 form, including Component 2 pay data, "shall expire no later than April 5, 2021."

In response to the judge's April 25 order, the EEOC announced that it expects to begin collecting EEO-1 Component 2 data for calendar years 2017 and 2018 in mid-July.

The agency said it will notify filers of the precise date the survey will open on the agency's online portal "as soon as it is available."

"Filers should continue to use the currently open EEO-1 portal to submit Component 1 data from 2018 by May 31, 2019," the agency said.

Before the 2016 revisions, the EEOC simply required employers to submit data on the ethnicity, race and sex of workers according to job category.

On Sept. 29, 2016, the EEOC announced that, beginning in March 2018, private employers with 100 or more employees including federal contractors and subcontractors would be required to report Component 2 summary pay data.

The agency said that the new requirements were designed to collect data to expose "persistent wage gaps" and "improve investigations" of possible pay discrimination.

The agency set March 31, 2018, as the initial deadline for employers to file using the revised form for the annual Employer Information (EEO-1) Report.

The Trump administration made the revocation of the payroll reporting requirement a priority as part of its agenda of regulatory reforms.

On Aug. 29, 2017, the OMB issued a stay of the revised EEO-1 reporting requirement, notifying EEOC that it had commenced a regulatory review of the revisions the EEOC had adopted in 2016. On Sept. 15, 2017, the EEOC announced the stay and instructed employers to follow the old reporting requirements until further notice.

In November 2017, the National Women's Law Center and the Labor Council for Latin American Advancement sued the OMB. The lawsuit alleged the OMB had exceeded its authority under the federal Administrative Procedure and Paperwork Reduction Acts by staying the collection of pay data as part of the EEO-1 filing requirement.

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Author:Murphy, Pat
Publication:Massachusetts Lawyers Weekly
Date:May 3, 2019
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