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April 20, 2017
Business Groups to White House: Block New EEO-1 Pay Reporting Requirements

Both business groups and Republican lawmakers have in recent days urged the White House to block the U.S. Equal Employment Opportunity Commission’s (EEOC) new EEO-1 compensation reporting requirements.

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Compensation recordsThe Office of Management and Budget (OMB) initially approved the commission’s revised form and its increased requirements but some stakeholders say it should now rescind that approval.

Background

Beginning in March 2018, private employers with at least 100 employees (and some federal contractors) will have to include compensation information on their EEO-1 filings. While the report was previously used by the EEOC to look for various types of discrimination, it now also will be used to look for pay discrimination.

Employers will have to include hours worked and “summary pay data,” which the EEOC says is the total number of full- and part-time employees they had during that year in each of 12 pay bands listed for each EEO-1 job category. Employers do not report individual pay information.

For reporting years 2016 and before, the “workforce snapshot period” was July 1 to September 30. But starting with the EEO-1 report including 2017 data, the period will be October 1 to December 31. Each employer may choose any pay period during this 3-month period to count its full- and part-time employees. For more details on the reporting requirements, see New Compensation Reporting Requirements Begin March 2018.

The new form was adopted under President Obama but Trump’s EEOC can’t just reverse course. The commission’s acting chair, Victoria A. Lipnic, said she voted against the new requirements and believes the changes should be revisited. But Lipnic acknowledged during a recent panel discussion that “the commission operates by a vote,” and that Democratic commissioners will outnumber her until at least late summer.

OMB Intervention

The U.S. Chamber of Commerce first called on the OMB to step in several weeks ago. The office approves such forms, among other things, and has the authority to rescind its approval of the new EEO-1, according to the Chamber. Regulations implementing the Paperwork Reduction Act (PRA) allow the OMB to do so under various circumstances, including a discovery that the agency’s burden estimates were “materially in error,” the organization said in a letter to that office.

The EEOC estimated that it would cost employers about $53.5 million to comply with the mandate; the Chamber has argued that the number is actually around $400 million. “[The] OMB must either rescind its approval of the EEOC submission or stay the effectiveness of its approval until the EEOC acknowledges the actual burden and justifies its imposition pursuant to the requirements of law,” the organization wrote.

Sens. Lamar Alexander (R-TN) and Pat Roberts (R-KS) sent the OMB a similar request April 12, arguing that the new requirement will cause “significant paperwork, reporting burdens, and new costs” for businesses. They also expressed concern about the discrepancy between the EEOC’s and the Chamber’s financial burden estimates.

“We respectfully request that you take all appropriate action to rescind OMB approval of the EEOC’s misguided EEO-1 Form revisions,” the senators said. “Congress vested the OMB Director with broad statutory authority … to take action if warranted, and this would be an appropriate use of that authority.”

The National Women’s Law Center and 82 other organizations, however, wrote to the OMB that same day, arguing that the standard for review has not been met. It called the Chamber’s characterization of the EEO-1 requirements “misleading at best” and urged the OMB to leave its approval of the form in place.

The OMB did not respond to a request for comment.

Kate TornoneKate McGovern Tornone is an editor at BLR. She has almost 10 years’ experience covering a variety of employment law topics and currently writes for HR Daily Advisor and HR.BLR.com. Before coming to BLR, she served as editor of Thompson Information Services’ ADA and FLSA publications, co-authored the Guide to the ADA Amendments Act, and published several special reports. She graduated from The Catholic University of America in Washington, D.C., with a B.A. in media studies.

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