EEO-1 Report’s compensation data requirement stayed

As anticipated, the Office of Management and Budget (OMB), on August 29, 2017, issued an immediate stay of the of the pay data collection aspects of the EEO-1 form added near the end of the Obama Administration. The deadline for the remaining portion of the 2017 Report is still March 31, 2018.

On the evening of August 29, 2017, the EEOC issued a statement reporting that Neomi Rao, Administrator, of the OMB’s Office of Information and Regulatory Affairs (OIRA) informed the EEOC via a memo earlier that day of the stay and that the OMB is initiating a review of the effectiveness of that pay data collection component. The OMB took this action in accordance with its authority under the Paperwork Reduction Act (PRA).

Report components

Federal regulations require that all employers in the private sector with 100 or more employees, and some federal contractors with 50 or more employees, annually file the EEO-1 Report, with the Joint Reporting Committee—a joint committee consisting of the EEOC and the OFCCP. The report requires covered private sector employers to provide workforce profiles by race, ethnicity, sex, and job category. The EEOC refers to this data as “Component 1.” Rao’s memo to Lipnic states that the EEOC may continue to use this component of the EEO-1 Report form during the review and stay.

On September 29, 2016, the EEOC announced that the first deadline for the 2017 EEO-1 Report, which would have, for the first time, added the collection of summary pay data from employers with more than 100 employees, was slated for March 31, 2018. However, since that controversial pay data reporting requirement was added by the Obama Administration, there has been speculation in the employer community that the Trump Administration would withdraw this new requirement. The pay data reporting requirement, which the Commission says was formulated in partnership with the OFCCP, would have added aggregate data on pay ranges and hours worked to the form, in addition to the Component 1 data. The EEOC referred to this added data collection as “Component 2.”

In previous years, the annual deadline for employers to file their EEO-1 Reports was September 30, but Lipnic’s statement clarifies that the previously set March 31, 2018, deadline will remain in force for the 2017 EEO-1 Report.

OMB’s explanation of the decision

In the memo, Rao explains that the PRA authorizes the OMB to review an approved collection of information if OMB determines that the relevant circumstances related to the collection have changed and/or that the burden estimates provided by EEOC at the time of initial submission were materially in error. The OMB determined that those conditions were met as to the pay data reporting requirement.

“[S]ince approving the revised EEO-1 form on September 29, 2016, OMB understands that EEOC has released data file specifications for employers to use in submitting EEO-1 data,” Rao states in the memo. “These specifications were not contained in the Federal Register notices as part of the public comment process nor were they outlined in the supporting statement for the collection of information. As a result, the public did not receive an opportunity to provide comment on the method of data submission to EEOC. In addition, EEOC’s burden estimates did not account for the use of these particular data file specifications, which may have changed the initial burden estimate.”

“OMB has also decided to stay immediately the effectiveness of the revised aspects of the EEO-1 form for good cause, as we believe that continued collection of this information is contrary to the standards of the PRA,” Rao’s memo continues. “Among other things, OMB 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 these circumstances, the regulations at 5 CFR 1320.10(f) and (g) require EEOC to submit a new information collection package for the EEO-1 form to OMB for review. In addition, the regulations require EEOC to publish a notice in the Federal Register announcing the immediate stay of effectiveness of the wages and hours worked reporting requirements contained in the EEO-1 form and confirming that businesses may use the previously approved EEO-1 form in order to comply with their reporting obligations for FY 2017.

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