Court Orders EEO-1 Pay Data Collection by September 30

By Lehr Middlebrooks Vreeland & Thompson, P.C.

April 25, 2019

When we left the saga of the EEO-1 pay data collection legal battles last month, a federal court had given the EEOC until April 3 to detail how and when it planned to implement its order reinstating the collection of pay and hours information (aka Component 2 data) from employers. The EEOC originally announced in 2016 that it would require submission of the expanded EEO-1 form from employers beginning in 2018, but an administrative stay in 2017 paused that plan and a court battle ensued. After being ordered in March 2019 to collect Component 2 data, the EEOC opened its online portal to receive Component 1 only. Component 1, the original EEO-1 form, lists the number of employees of a company by job category, race, ethnicity, and sex. Depending upon size, this data also may be required by location. Component 2 includes hours worked and pay information by race, ethnicity, and sex.
 
In its April 3 response to the court, the EEOC advised that it could accomplish the ordered data collection from employers by September 30, citing "significant practical challenges for the EEOC." The agency stated it would need nine months to make "necessary updates, enhancements, security testing, load and performance testing, data validations and verifications, and application testing" if the work was done in-house. However, at a cost of $3 million, it could contract a third party to collect the data in less time. The EEOC then warned that data gathered within its proposed shorter timeline might not have "sufficient integrity to support data comparisons or other analyses because of the limited quality control and quality assurance measures."  
 
The National Women's Law Center and other groups who originally urged the court to reinstate the expanded EEO-1 report have now asked that it reject the EEOC's plan and order it to collect Component 2 information during the same time frame as Component 1 - by May 31. (The online portal for receiving Component 1 data has been open since March 18). In support of this request they state that the EEOC "appear(s) not to have taken seriously plans for compliance to date - based on their earlier failures to alert plaintiffs and the court to issues that they now assert require delay, their failure to act promptly following the March 4, 2019, order, and their ongoing failure even now to alert the employer community to the renewed requirement to gather and submit Component 2 data. They also cite the Office of Management and Budget's (OMB) prior assertion that Component 2 collection could begin within one day if so ordered. OMB is the agency that initially approved the expanded EEO-1 form and then stayed that approval. The group further requested that the EEOC be required to collect the hours and pay information for 2017 since employers did not submit it while the stay was in effect. In the alternative, it should collect data for 2019 - the original OMB rule authorized data collection for only three years, expiring October 1, 2019.
    
The U.S. Chamber of Commerce, in conjunction with a number of business groups, responded by advising the court that "gathering data retroactively for 2018 in Component 2 form is simply impractical" and claimed they need at least 18 months lead time. They further expressed concerns regarding the security of pay data and regarding the EEOC's plans to have an outside contractor receive it as the agency "has not explained or put in place appropriate protocols."  
 
During an April 16 hearing, the court reminded the EEOC that it had known from the start of the litigation it could be ordered to collect the pay/hours data and wanted "to know why the EEOC deleted fact info forms from its website and why it hasn't been put back up." The agency said it had focused its limited resources on other priorities before the stay was lifted last month and that reposting the information would cause it to be overwhelmed with questions from employers that it cannot yet answer. The EEOC also claimed that its data collection contractor would abandon the project if the deadline is sooner than September 30.  
 
The parties were given until April 22 to submit proposed orders with supporting caselaw to the court. In a hearing on that date the EEOC announced its plans to open its portal to collect Component 2 submissions for 2018 from July 15 thru September 30, 2019. The EEOC's Chief Data Officer also testified that, although the content of the report will remain as previously posted on its website, the reporting format will change. The agency plans to publish instructions for filing the report on July 1. The court asked many questions about the lack of information received from the EEOC and OMB during these proceedings and got few answers. That lack of information led the court to clearly express concern over their intentions even the veracity of the Department of Justice attorney representing them.    
   
Earlier today, the court accepted the EEOC's plan to collect 2018 pay data from employers by September 30, 2019 and instructed it to inform employers of this decision by April 29. It also ordered EEOC to decide by May 9 whether it will gather the same data for 2017 or 2019. Reports for the second year will be due at some later date.
 
Although there are still many unanswered questions about Component 2 data collection at this time, we know that Component 1 data must be submitted by May 31. So, for those employers who must submit the Employer Information Report (EEO-1), the same information as was required last year is required this year in the same format and in the same manner. Guidance on filing Component 2 data is to be posted and distributed to employers by July 1. If an appeal to this order is filed, or when more information becomes available, we will keep you informed.