Judge Reinstates EEO-1 Wage Data Reporting Requirement

By Melissa Sobota and Bill Pokorny - Franczek PC

March 7, 2019

On March 4, 2019, a federal court reinstated an Obama-administration rule requiring that private employers with 100 or more employees submit information on their workers’ wages and hours, broken down by race, sex, and ethnicity, to the U.S. Equal Employment Opportunity Commission.

As we previously reported, on January 29, 2016, President Obama announced that the EEOC was revising its Employer Information Report (EEO-1) guidelines to  require private employers and federal contractors to report employees’ total hours worked and W-2 earnings (including tips, taxable benefits, and bonuses) for a 12-month period, broken down by race, ethnicity, and gender.

However, as we previously reported, the Trump administration stayed the reporting requirement in September 2017. When issuing the stay, the Trump administration stated that it was 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.” Due to this stay, employers have only been required to continue to report demographic data for their employees, not wage and hour data.

However, on March 4, Judge Tanya S. Chutkan of the U.S. District Court for the District of Columbia found that the administration failed to articulate an adequate justification for the stay, and that the stay was therefore “arbitrary and capricious.” The Court therefore ordered that the Obama-era revised EEO-1 reporting requirements be reinstated.

So what should employers do now? The answer is unclear as the story is still developing and it is unknown whether the Trump administration will appeal the ruling. The Judge did not say when the collection of pay data will go back into effect, but did rather bluntly hint that it could be as soon as the 2018 EEO-1 reporting deadline on May 31. In ordering the pay data collection and reporting back into effect, the Judge noted that employers had ample notice of the requirement in 2016 and 2017, and could have anticipated that the revised EEO-1 reporting could be reinstated.

While an appeal seems likely and the court’s ruling could be stayed during the appeal, employers should be prepared for the new reporting requirements, should they go into effect. We will continue to monitor the case and provide updates as they become available.