On August 29, 2017, the White House Office of Management and Budget announced that it would immediately pause the pay-data collection requirement of the revised EEO-1 form that was scheduled to take effect in March 2018. The data collection requirement would have significantly expanded employers’ reporting obligations to the EEOC to include pay data by gender, race and ethnicity on the annual EEO-1 form. The EEO-1 is required of employers with 100 or more employees and federal contractors and subcontractors with 50 or more employees.
The expanded EEO-1 reporting requirements had their genesis in an April 8, 2014 Presidential Memorandum, which directed the Secretary of Labor to propose “a rule that would require Federal contractors and subcontractors to submit to DOL summary data on the compensation paid their employees, including data by sex and race.” In a January 29, 2016 fact sheet, the Obama administration explained that the heightened EEO-1 reporting requirements would “help focus public enforcement of our equal pay laws and provide better insight into discriminatory pay practices across industries and occupations.”
President Trump’s OMB sees things differently. In its memorandum halting implementation of the proposed rule, OMB says that the heightened reporting requirements “lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.” Further, these burdens outweighed any benefit that might come from implementing the expanded requirements at this time. OMB directed the EEOC to submit a new information collection package for the EEO-1 form for OMB’s review and to publish a notice in the Federal Register confirming that businesses may use the previously approved EEO-1 form in order to comply with their FY 2017 reporting obligations.
The implementation and rescission of the EEO-1 reporting requirements illustrates how changes in the political climate impact federal contractors. A similar policy change occurred during the Bush administration when the OFCCP rescinded its Equal Opportunity Survey requirements, which were introduced during the Clinton administration. This survey had required contractors to collect and report information about personnel activities, compensation and tenure data, and certain information about their affirmative action programs.
Employers should be aware that the OMB’s announcement is temporary and that it does not permanently prevent the EEOC from requiring contractors to gather and collect additional data. Until such permanent guidance is published, employers should plan to comply with the earlier approved EEO-1 form and to submit data regarding race, ethnicity, and gender by occupational category by the filing deadline of March 31, 2018. The VETS-4212 form, required of certain federal contractors and subcontractors, remains due on or before September 30, 2017.