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Sep 05, 2017

Alert: OMB revokes pay data portion of EEO-1 Report

Wage and Hour 

To the relief of employers across the country, the Office of Management and Budget (OMB) has yanked approval for the controversial new pay data portion of the revised EEO-1 Report that would have taken effect in 2018. The OMB’s Office of Information and Regulatory Affairs informed the U.S. Equal Employment Opportunity Commission (EEOC) in a memo dated August 29, 2017, that the OMB is immediately placing the revisions on hold while it initiates a review. The memo stated: “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.”
 
As a result, covered employers won’t have to submit data on W-2 wages and hours worked for their employees. Instead, they’ll submit the traditional EEO-1 Report that was previously in place, generally consisting of a simple chart for each location showing the number of employees sorted by race/ethnicity and gender in 10 job categories. That basic report will still be due by March 31, 2018, using a snapshot from a payroll date in the fourth quarter of 2017. In general, covered employers include those with at least 100 employees, as well as those with at least 50 employees and $50,000 in federal contracts or subcontracts.
 
Acting EEOC Chair Victoria Lipnic (a Republican), who voted against the expansion of the EEO-1 Report last year, had been lobbying the OMB to rethink its approval of the Obama-era expansions. After receiving the memo, she issued a statement expressing her “hope that this decision will prompt a discussion of other more effective solutions to encourage employers to review their compensation practices to ensure equal pay and close the wage gap.” She also reaffirmed the agency’s commitment to enforcing equal pay laws.
 
Tips: The EEOC is headed by five commissioners who are political appointees, consisting of three aligned with the President’s party and two aligned with the opposing party. The EEOC is currently in transition, with one seat vacant (while Trump nominee Janet Dhillon awaits Senate confirmation as EEOC Chair) and another seat that will become vacant in September. Once a majority of the Commissioners are Republicans, we anticipate that the agency may explore alternative options for equal pay enforcement, but it is unlikely to try to revive the reporting requirements for wages and hours worked. Vigilant will keep members informed of any new developments.

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