OMB Blocks Collection of Pay Data On New EEO-1 Reports – For Now…

By: Melanie Dunajeski, Drewry Simmons Vornehm, LLP

Employers with more than 100 employees and certain federal contractors and subcontractors are familiar with the annual EEO-1 form, by which they identify how their workforce is comprised by race and gender.  Revisions made in 2016 drastically expanded the data collected from employers on that form, to include summary pay data by job category, separated into 12 pay “bands” for each category.  While the rationale for collecting the data was to identify areas where equal pay issues may be the most prevalent, employers and business groups were highly critical of the intrusiveness of the new requirements as well as the data gathering and reporting burden that the new form placed on employers.  While EEO-1 forms have historically been due in September, no forms were due in September 2017, with the next report (including the burdensome pay data) due in March 2018.

However, on August 29th, the White House Office of Management and Budget (“OMB”) told the EEOC that it has initiated “a review and immediate stay of the effectiveness of the pay data collection aspects” of the revised EEO-1 form.   While this development does not kill the pay collection requirements, it indicates that an in-depth review will be taken, and possible changes demanded.  This is in line with the outspoken criticism of the pay collection scheme by business and industry groups.  The OMB must approve forms required by administrative agencies – and an approval was granted during the Obama administration.  The action by the current administration’s OMB may face some administrative and legal hurdles as to whether a once-approved form can be rejected by the OMB in a later administration.  But, there is at least an argument to be made that the current administration’s OMB could revoke the approval if it finds that the EEOC’s estimates of the burden placed on the stakeholders to gather information and complete the forms was previously “materially in error”.

In any event, anything could happen before the March 2018 due date for the filing.  So, stay tuned if you are an employer subject to EEO-1 filing requirements.