The requirement to include pay data in the EEO-1 report is back. On Monday, the federal district court for the District of Columbia vacated the Office of Management and Budget’s (OMB) decision to stay the collection of W-2 wage and hour data in the annual survey.
The EEO-1 (formally known as the Employer Information Report EEO-1) requires employers with 100 or more employees to report the number of individuals employed by job category, sex, race and ethnicity. The Obama administration changed the EEO-1 reporting form in September 2016 to include pay data in an effort to counter pay discrimination. The Equal Employment Opportunity Commission (EEOC) said that access to pay equity data is central to effective enforcement of equal pay laws.
The new provisions required covered employers to report income and hours categorized by race, ethnicity and sex. Many employer groups argued that the new requirements were excessively burdensome, and would cost employers up to $1.3 billion per year.
In September 2017, in response to an OMB memo stating that it was initiating an immediate stay and review of the form’s pay data component, the EEOC told employers not to report aggregate data about W-2 (Box 1) income and hours worked when filing their EEO-1 report.
In vacating the OMB’s decision, the federal court found that the OMB had failed to provided adequate reasoning to support its move to stay the data collection. Therefore, the court ruled, the decision to stay the collection of information was “arbitrary and capricious.”
Under the ruling, employers will be required to file their pay data with this year’s EEO-1 report, which has a May 31 filing deadline. However, the EEOC is widely expected to delay the deadline to give employers time to collect the pay data.
Related Article: EEO-1 Pay Data Reporting – What to Expect
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