Employers should start gathering their 2018 compensation information if they haven’t already.

My last post covered the court decision issued on March 4 in the case of National Women’s Law Center v. Office of Management and Budget, which directed the Equal Employment Opportunity Commission to require employers to submit compensation data with their annual EEO-1 reports.

The requirement was imposed in 2016 during the Obama Administration, but in 2017, the Trump OMB suspended the requirement before it was to take effect. The plaintiffs in the lawsuit claimed that the OMB suspension was unlawful, and U.S. District Court Judge Tanya Chutkan of the District of Columbia agreed.

After Judge Chutkan’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 April 3.

Late that night, the EEOC filed a “submission” and a declaration from its Chief Data Officer.

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

The declaration of the EEOC’s Chief Data Officer said that the EEOC was not equipped to handle whatever comp information it received:

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. 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.

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

The declaration estimated the cost to the EEOC of collecting Category 2 information in 2019 to be $3 million. That figure does not include the cost to employers who are subject to the requirement.

But wait! There’s more!

This week, on April 16, the parties had a hearing before Judge Chutkan. The transcript is not yet available to the public, but according to news reports, the Judge questioned the EEOC’s decision to remove from its website instructions for employers on how to submit their Category 2 information. According to the Chief Data Officer, who was at the hearing, the instructions were removed because “we’re not sure what the data collection process would look like.” He also said that the EEOC was trying to avoid being inundated with calls from employers asking how to submit their compensation data.

Meanwhile, the plaintiffs in the lawsuit argue that the deadline for submission of compensation data should be May 31 – the same as the deadline for the information that employers normally provide in their EEO-1 reports.

The Judge did not rule in favor of the EEOC on its proposed September 30 deadline, nor did she order that the EEOC set a different deadline.

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

May 31 – Deadline to submit 2018 “Category 1” EEO-1 data (the information normally provided every year).

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 – or 360 fields of information.

Tune in tomorrow . . .

April 17, 2019/by Labor