U.S. Office of Management and Budget initiates review and immediate stay of the government’s pay data collection process
In keeping with President Trump’s promise to cut regulations to promote business growth, on August 29, 2017, the Office of Information and Regulatory Affairs announced that the Office of Management and Budget was initiating a review and immediate stay of the government’s pay data collection process, specifically, the enforcement of an Obama-era rule which revised EEO-1 reports.
Companies with more than 100 employees and federal contractors with at least 50 employees are required to file EEO-1 forms annually with the Equal Employment Opportunity Commission (“EEOC”). During Obama’s presidency, the EEOC revised the EEO-1 forms to collect more information about salary data. Specifically, the new forms required these employers to provide summary compensation data to the EEOC in each EEO-1 category, divided into “pay bands,” and classified by sex, race, and ethnicity.
The compensation data collection initiative was controversial when it was originally rolled out by President Obama in 2016. Critics of the revised forms including EEOC acting Chairwoman Victoria Lipnic believed that the additional compensation data would not assist in determining whether pay disparities were the result of unlawful discrimination or some other reason. The stay of the use of the revised forms comes as a relief to employers, as the total cost to businesses to compile this data was estimated to be $400 million.
In years past, employers were required to file EEO-1 reports by September 30; however, the new deadline for employers is March 31, 2018. The EEOC has indicated that it will publish “as soon as possible” a Federal Register notice explaining employers’ obligations under the existing EEO-1 requirements. Employers responsible for reporting workforce data must still report this information by the March 31 deadline. Federal government contractors must file VETS-4212 forms by September 30, 2017.
If you would like to discuss this client update and its implications further - or if you have legal questions relating to labor, employment, employee benefits and ERISA – please contact practice group lead Mark Knoth or Katherine Cser via email or at (313) 961-0200.