Employment & Labor Insider

I have written here and here about the court order directing the Equal Employment Opportunity Commission to require employers to submit compensation data with their annual EEO-1 reports.

The order came about in a lawsuit filed against the federal Office of Management and Budget and the EEOC by public interest groups, who claimed that the Trump OMB's suspension in 2017 of the Obama-era comp data requirement was unlawful.

After the court's order was issued on March 4, the plaintiffs in the lawsuit decided that the EEOC wasn't acting expeditiously enough to comply. The parties had a status conference on March 19 with the judge, who directed the EEOC to provide more information about its intentions by yesterday.

As of close of business yesterday, nothing had been filed with the court. But late last night, the EEOC filed a "submission" and a declaration (affidavit) from its Chief Data Officer.

The EEOC proposes to require employers to submit their EEO-1 compensation data ("Component 2") for 2018 by September 30, 2019. The EEOC proposes not to require employers to submit 2017 data.

The plaintiffs will have an opportunity to respond to this, and it's unclear what the final outcome will be. I also still think the OMB and EEOC will appeal the judge's March 4 decision and move to stay (suspend) it pending resolution on appeal.

But for now, the timetable for employers appears to be as follows:

May 31 - Deadline to submit 2018 "Category 1" EEO-1 data (the usual stuff).

September 30 - Deadline to submit "Category 2" compensation data for 2018.

The Category 2 information consists of 12 pay bands for each of the 10 EEO-1 categories, broken out by race, ethnicity, and sex. 12 times 10 times 3 = 360 fields of information. Here is an excellent 2017 post from Cara Crotty, chair of our Affirmative Action/OFCCP Compliance Practice Group, explaining what employers need to do. (Cara's post originally had a link to the Category 2 form, but that link is no longer working.)

Oh, and I almost forgot to tell you about that declaration from the EEOC's Chief Data Officer. He says the EEOC is not equipped to handle whatever comp information it gets. 

I am not kidding. Check this out:

The proposed timeline for undertaking and closing a collection of Component 2 data by September 30, 2019, raises significant issues with data validity and data reliability. . . . The EEOC has not conducted a true pilot study of the Component 2 data collection measures, instrument, or processes. . . . [I]t is likely that undertaking and closing the collection of Component 2 data by September 30, 2019 would raise major data validity and reliability issues. [NOTE FROM ROBIN - Yes, he said that twice.] Under the circumstances, I perceive a significant risk that employers would not be reporting comparable data that can be used by the government or others in meaningful comparisons or analyses.

(Declared under penalty of perjury.)

According to the declaration, because the EEOC is incapable of handling the comp data in 2019, it will have to contract the work out this year to an independent contractor affiliated with the University of Chicago. The Chief Data Officer says the EEOC should have its act together by 2020, in time to receive comp data for 2019.

And the declaration estimates the cost to the EEOC of collecting Category 2 information in 2019 to be $3 million. $3 million for information that is likely to be useless. Not to mention the cost to you unfortunate employers who are subject to the requirement.

You may ask yourself, "Why did the EEOC impose this compensation data requirement in the first place if it didn't have the capability to handle what it got?" It's a great question, and the best answer I can give you is that the Chief Data Officer wasn't hired until 2017, roughly a year after the EEOC issued the requirement. Apparently the agency didn't know how outdated its data collection and analysis processes were until he had a chance to look under the hood.

Needless to say, we will stay on top of all developments and keep you posted.