On April 25, 2019, the U.S. District Court for the District of Columbia ordered the U.S. Equal Employment Opportunity Commission (EEOC) to collect detailed data on employee compensation and hours worked from covered employers as part of their EEO-1 reporting by September 30, 2019.  Employers must report Component 2 pay data for both 2017 and 2018. 

Employers are also required to submit 2018 Component 1 data by May 31, 2019, unless they request a two-week extension, in which case they will have until June 14, 2019 to provide the 2018 data. 

Component 1 of the EEO-1 form asks for the number of employees who work for the company by job category, race, ethnicity and gender.  Component 2 data includes hours worked and pay information from employees’ W-2 forms by race, ethnicity, and gender.

Background Information

Generally, employers with at least 100 employees, and federal contractors with at least 50 employees and $50,000 in contracts, must file the EEO-1 form, providing the EEOC with data on the number of individuals employed, their distribution by legal entity and location, and their demographic characteristics.  

During the Obama administration, the EEOC sought to expand government records on pay gaps by gender and race by collecting pay data that could be correlated to employee demographic groups.  In September 2016, the EEOC announced that starting in March 2018, it would collect employee pay data from certain employers on revised EEO-1 reports.  That decision was widely criticized because of the burdens involved in reporting the pay data and the EEOC’s inability to establish that the data being requested would support any meaningful analysis.

In 2017, the Office of Management and Budget (OMB) suspended the pay-data collection provisions.  The National Women’s Law Center (NWLC) subsequently challenged the hold on those provisions.  On March 4, 2019, the U.S. District Court for the District of Columbia lifted the stay, and on April 25, 2019, the court set a September 30, 2019 deadline for the EEOC to collect pay-data information.  

On May 3, 2019, the Department of Justice filed a Notice of Appeal of the district court’s decision.  The EEOC, however, posted a statement informing companies that despite the appeal, they are still required to submit pay data by September 30, 2019, as the Notice of Appeal “does not stay the district court orders or alter EEO-1 filers’ obligations to submit Component 2 data.”

Recommendation for Covered Employers

Employers who are required to report their pay data should ensure the information is either readily available or that they can analyze and gather the data by the September 30, 2019 deadline.  Employers should also consider conducting a privileged pay equity audit in order to amend pay practices before reporting is necessary. 

Do you have questions about how this update may affect you?  For further information contact:

Emily J. Fox (EFox@wilsonturnerkosmo.com)

Michael S. Kalt (Mkalt@wilsonturnerkosmo.com)

Lois M. Kosch (LKosch@wilsonturnerkosmo.com)

Morgan P. Suder (MSuder@wilsonturnerkosmo.com) 

Wilson Turner Kosmo’s Special Employment Alerts are intended to update our valued clients on significant employment law developments as they occur. This should not be considered legal advice.