New Ruling Means Employers Must Report Pay Data

Employers need to prepare for their pay practices to be placed under a microscope.
By: | March 5, 2019 • 3 min read
pay data

Late Monday night, the U.S. District Court for the District of Columbia vacated a prior Office of Management and Budget’s order staying the implementation of the Obama-era revised EEO-1 Report which required employers to report W-2 wage information and total hours worked.

So how did we get here? According to a new legal alert from Fisher Phillips, over the past few years, there has been an ongoing battle at the federal level to determine whether the EEO-1 would also be used as a pay-data reporting tool.

According to the alert, the pendulum began to swing in 2016, when the EEOC proposed changes to the EEO-1 report that would require employers to include pay data and the number of hours worked for their workforces. The proposed reporting expansion was intended to identify pay gaps, which the agency could then use to target specific employers and investigate pay-discrimination practices. The revised form, revealed in October 2016, was to be submitted by employers by March 31, 2018, using a “workforce snapshot” of any pay period between Oct. 1, 2017 and Dec. 31, 2017.

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But the pendulum swung back in employers’ favor in August 2017, when the White House scrapped the revised EEO-1 report. The Office of Management and Budget announced that it had significant concerns with the revised reporting requirements, among them that “some aspects of the revised collection of information lack practical utility, are unnecessarily burdensome and do not adequately address privacy and confidentiality issues.”

The National Women’s Law Center and the Labor Council for Latin American Advancement sued both the EEOC and the OMB in November 2017 in order to revive the beefed-up EEO-1 report.

From the Fisher Phillips alert: “On Monday night, Judge Tanya S. Chutkan of the U.S. District Court for the District of Columbia issued a 42-page opinion in National Women’s Law Center v. OMB reviving the revised EEO-1 report. Chutkan determined that the OMB did not have good cause to change course because it could not demonstrate that any relevant circumstances warranting the action had occurred between the time the proposed rule was finalized and the time the revisions were cast aside. And although the OMB indicated that it did not believe the public had ample opportunity to review the proposals and offer meaningful comment, Judge Chutkan rejected this argument as ‘misdirected, inaccurate and ultimately unpersuasive.’ ”

So what’s next for employers?

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