Agency’s Tactics For Battling The Gender Pay Gap Now Uncertain
In a not-entirely surprising September 12, 2019 notice in the Federal Register, the EEOC announced that it plans on not renewing an Obama-era rule requiring employers to provide pay data as part of their annual employer information (EEO-1) report until after it assesses whether the two years’ worth of pay data a federal court ordered it to obtain under the rule is useful to its efforts to address gender pay gap.
As we reported in March, the court decided in the case National Women’s Law Center v. OMB that the Trump Administration could not freeze application of the new rule, which revises the annual EEO-1 report to require employers to include a “Component 2” compensation data report containing W-2 wages and hours worked for all employees within 12 pay bands for each of the 10 EEO-1 job categories.
As a result of an April ruling by the same court, certain EEO-1 filers must submit their Component 2 data for calendar years 2017 and 2018, by September 30, 2019. Specifically, employers, including federal contractors, are required to submit Component 2 compensation data for 2017 if they had 100 or more employees during the 2017 workforce snapshot period.
Likewise, employers, including federal contractors, are required to submit Component 2 data for 2018 if they had 100 or more employees during the 2018 workforce snapshot period.The workforce snapshot period is an employer-selected pay period between October 1 and December 31 of the reporting year.
A month after the rulings, on May 8, 2019, the US Senate confirmed President Trump’s pick to chair the EEOC, Janet Dhillon, beginning a leadership term scheduled to last until July 1, 2022. Prior to Ms. Dhillon confirmation, she had expressed concerns about the new EEO-1 data collection rules, causing many to speculate that her Chairwomanship would lead to the eventual rescission of the pay data requirements.
As predicted, only four months into Chair Dhillon’s term, the EEOC announced that it had significantly undershot the compliance cost estimate for businesses to submit yearly pay data when it passed the rule in 2016, and it is therefore not seeking to renew Component 2 of the EEO-1 after it complies with the court’s order to collect data this month.
Despite the EEOC’s decision, employers must still make their 2017 and 2018 Component 2 submissions by September 30, 2019. The EEOC may also restore Component 2 later.
The full EEOC announcement can be read here.
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Gary Savine is an Illinois employment lawyer and founder of Savine Employment Law, Ltd. in Chicago. Gary regularly advises human resources professionals on recently enacted employment laws.