Earlier this year, a federal judge revived pay data reporting requirements for employers with 100 or more employees. Adopted under the Obama administration, the requirements had not been enforced under President Trump; however, the Equal Employment Opportunity Commission (EEOC) is now facing a court order to collect the required data by September 30, 2019.
Although Judge Tanya Chuktan of the U.S. District Court for the District of Columbia rendered the decision on March 4, the EEOC did not have the requisite technical capabilities to collect the required information at that time. As a result, when it opened up its annual reporting system to employers two weeks later, it did not provide a way for employers to comply with their reinstated reporting obligations. Following additional court battles, Judge Chuktan ruled that the EEOC must produce employers’ pay data by September 30, and this means that a deadline has been set for employers to comply with their reinstated obligations as well.
So, is your company required to comply? And, if so, what do you need to know?
What Companies are Subject to the Court’s Ruling?
The court’s ruling applies to most companies that are required to file Standard Form 100 (the EEO-1 Survey) with the EEOC. This includes essentially all private employers with 100 or more employees, as well non-exempt government contractors with 100 or more employees (while non-exempt government contractors with 50 or more employees are required to file Standard Form 100, the reinstated pay data rules only apply to those with 100 or more employees). For covered employers, filing the EEO-1 Survey is mandatory, and employers that fail to file can face fines and federal imprisonment. Covered employers can also be compelled by court order to file the EEO-1 Survey at the request of the EEOC. According to Bloomberg Law, the ruling affects more than 60,000 employers across the country.
What New Information is Required?
Under the reinstated pay data reporting rules, covered employers must now report employee pay data in 10 job categories across 12 pay bands, and these data must be categorized by employees’ ethnicity, race, and sex. These are referred to as “Component 2” data on the EEO-1 Survey. The 10 job categories are:
- Executives/Senior Officers, and Managers
- First/Middle Officers and Managers
- Sales Workers
- Administrative Support Workers
- Craft Workers
- Laborers and Helpers
- Service Workers
Employers can access the EEOC’s EEO-1 Job Classification Guide to see a list of employment positions falling within each of these categories. The 12 pay bands include annual compensation (for the applicable reporting period) of:
- $19,239 and under
- $19,240 to $24,439
- $24,440 to $30,679
- $30,680 to $38,999
- $39,000 to $49,919
- $49,920 to $62,919
- $62,920 to $80,079
- $80,080 to $101,919
- $101,920 to $128,959
- $128,960 to $163,799
- $163,800 to $207,999
- $208,000 and over
When Can an Employer Begin Submitting the Newly-Required Information?
While the deadline to submit this newly-required information is September 30, the EEOC is currently expecting to begin collecting employers’ pay data sooner. According to the EEOC’s website:
“EEO-1 filers should begin preparing to submit Component 2 data for the calendar year 2017, in addition to data for the calendar year 2018, by September 30, 2019, in light of the court’s recent decision in National Women’s Law Center, et al., v. Office of Management and Budget, et al., Civil Action No. 17-cv-2458 (D.D.C.). The EEOC expects to begin collecting EEO-1 Component 2 data for calendar years 2017 and 2018 in mid-July, 2019, and will notify filers of the precise date the survey will open as soon as it is available.”
Due to the amount of time and effort likely to be involved in collecting and categorizing the required pay data, large employers will need to begin the process of preparing to submit their Component 2 data to the EEOC as soon as possible.
Importantly, the extension of the deadline to file Component 2 data to September 30 does not affect covered employers’ general obligation to file their 2018 EEO-1 Surveys by May 31. If necessary, employers can request a two-week extension to June 14.
Is it possible that the Court’s Decision Will Still Be Overturned?
Currently, yes. As the court decision reinstating covered employers’ pay data reporting obligations remains fairly new, the possibility still exists for the federal government to file an appeal. If an appeal is filed, this could result in an indefinite (and potentially final) stay of employers’ pay data reporting obligations. Individual employers may choose to file legal challenges as well, particularly if compliance represents an undue – if not insurmountable – burden. That said, employers should not rely on the September 30 deadline being extended or withdrawn, and they should proceed as if they will be required to submit their Component 2 data to the EEOC by September 30.
Why is the EEOC Collecting Employers’ Pay Data?
Among the reasons for the collection of employers’ pay data – and the primary reason why the National Women’s Law Center and other equal rights organizations challenged the suspension of the pay data reporting requirement – is the premise that it will shed light on any pay disparities between similarly-situated employees of differing ethnicities, races, and sexes. As a result, when preparing to file their Component 2 data with the EEOC, some employers may need to be cautious in order to mitigate their risk of subsequent legal action. Working with legal counsel to prepare the required disclosures and assess any potential exposure can provide the protection of the labor attorney-client privilege, and it can ensure that any issues are addressed appropriately in order to avoid the risk of additional liability.
Contact Gignilliat, Savitz & Bettis LLP | South Carolina’s Employment & Labor Law Firm
If you have questions about your company’s reporting obligations or would like help preparing your EEO-1 Survey responses, we encourage you to contact us for a confidential initial consultation. To speak with one of our highly-experienced South Carolina employment lawyers, please call 803-799-9311 or inquire online today.