No Pay Collection by EEOC in 2020 (Or Likely Thereafter for a While) - American Society of Employers - Anthony Kaylin

No Pay Collection by EEOC in 2020 (Or Likely Thereafter for a While)

EEOC logoAlthough for 2019, employers with 100 or more employees are required to report Box 1 W-2 pay and hours worked for 2018 and 2017, that won’t be the case in the coming year.  The EEOC is under a court order, although appealed, to collect this data.  The EEOC is determined to collect both 2017 and 2018 data by end of September as opposed to pushing the reporting requirements to 2020 by collecting 2018 and 2019 pay data.

On September 12th, the EEOC filed a request with the Office of Management and Budget (OMB) for a three-year approval of its current EEO-1 Component 1 information collection under a new control number. This longstanding part of the Employer Information Report collects employment data on race/ethnicity, gender, and job category. In this filing, the EEOC said that it does not intend to seek renewal at this time of the Component 2 information, pay data, because that collection under the current control number (the same one as the current Component 1 collection) will expire by court order  April 2021.

It is very confusing.  However, the Judge had ordered in the National Women’s Law Center, et al. v. Office of Management and Budget, et al. case, that is on appeal currently, that EEOC’s authority to collect Component 2 pay data will expire no later than April 5, 2021, but also only required the EEOC to collect two years of data, which is why the EEOC is currently collecting 2017 and 2018 data at once.    Therefore, assuming that the EEOC complies with the Court order, the EEOC’s authority to collect Component 2 data will also expire on September 30, 2019.

According to the notice, EEOC has serious doubts about the previously reported burden on employers to collect and file Component 2 data. The OMB had stayed collection because it believed that the EEOC’s previous burden estimate was not correct.  The EEOC under the current Chair agrees and stated in the notice that the previous burden reported was “an extremely low estimate of the burden on employers . . . EEOC now concludes the burden estimate associated with the EEO-1 is higher than it has previously estimated.”  The EEOC wants to take a step back and rereview the question of whether the actual burden outweighs the value of the data. The Agency has elected to pause so it can “balance the utility of the data to its enforcement programs against the burden the data collection as structured imposes on the employers who must submit it.”

In 2016, the EEOC had estimated the burden at roughly $54 million. The revised estimate is $614 million for the 2017 data, and an even more –– $622 million for the 2018 data.

The EEOC then stated that “[t]he Commission now concludes that it should consider information from the ongoing Component 2 data collection before deciding whether to submit a pay data collection to OMB. At this point in time, the unproven utility to its enforcement program of the pay data as defined in the 2016 Component 2 is far outweighed by the burden imposed on employers that must comply with the reporting obligation. Therefore, the EEOC is not seeking to renew Component 2 of the EEO-1.”

Therefore, the EEOC will not collect future pay data without first analyzing the current collection to determine its true value and representation of pay issues.  Data based on Box 1 W-2 would not represent pay differentials except on the basis of personal choice, e.g. contribution to retirement plans or health savings accounts, if applicable, or share of pre-tax health care premiums among other things.  The EEOC, if down the road decides to reinitiate the pay collection, will take a more measured approach as to the data collected, analyzed, and securitized in their systems as well as burden on employers.

 

Source:  Jackson Lewis 9/12/19, Constangy Smith Brooks and Prophete LLP 9/13/19

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