OMB Suspends New EEO-1 Reporting Data Requirement

Employers throughout the nation who have been preparing to comply with the revised Employer Information Report (EEO-1) will be pleased to learn that the Office of Management and Budget’s Office of Information and Regulatory Affairs (“OIRA”) has indefinitely suspended the new report’s compliance date.

By way of background, as explained hereEEOC Picture, in February 2016, the U.S. Equal Employment Opportunity Commission (“EEOC”) announced a major revision to the EEO-1 Form reporting requirements, requiring all employers with more than 100 employees (and federal contractors with more than 50 employees) to submit compensation data based on certain demographic information such as gender, race, and ethnicity to the EEOC beginning in 2017.  Following that announcement, employers in all industries voiced numerous concerns about those changes, including the increased time and money that would be required to complete the new report, confidentiality issues, data security and privacy issues, the range of false positives that would result from the submission of pay data, and the enforcement actions that would inevitably arise from these false positives.  Although the EEOC thereafter issued a “revised” Final Rule in September 2016, the revised rule changed very little from the original, aside from moving the due date for submission to March 31, 2018.

However, on August 29, 2017, the OIRA stopped the new EEO-1 rule in its tracks, stating in a memorandum to the EEOC that among other things, it is “concerned that some aspects of the revised collection of information lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.”

In response, EEOC acting Chair Vicki Lipnic said that the EEOC remains committed to strong enforcement of the country’s federal equal pay laws and that OIRA’s decision will not alter the EEOC’s enforcement efforts.  Lipnic further confirmed that the EEOC will review its options, and that she 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.

Overall, the OIRA’s announcement is a huge reprieve for the business community, as employers now will not be required to spend time, money and energy to ensure compliance with the revised EEO-1 Form reporting requirements.  While this new development does not prevent the EEOC from attempting to reinstate these requirements or instituting a rule requiring similar information in the future, it is certain that, at least for the time being, employers will not be forced to comply with these new reporting requirements.   Thus, for now, businesses simply need to comply with existing EEO-1 obligations, which require filing by March 31, 2018.

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