Uniform federal wage data collection from employers across the United States may be a one-time requirement.
The Equal Employment Opportunities Commission will not renew controversial wage data collection as part of its annual workforce diversity report, according to a 9/11 opinion published in the Federal Register. The EEOC says the burden of collecting the data, known as “component 2” of the EEO-1 report, is higher than expected and deserves further consideration before the agency seeks approval from the House Blanche for more salary reports.
The current wage collection is scheduled to expire on September 30, the same day more than 60,000 employers are due to submit their workforce wage and hour information for the first time. The EEOC proposed the reporting requirement under the Obama administration, intending to help narrow the pay gap for women and minorities.
“The Commission now concludes that it should review the information from the ongoing data collection of Component 2 before deciding to submit a wage data collection to the OMB,” wrote the EEOC President, Janet Dhillon, in the notice. “At present, the unproven utility of its compensation data enforcement program as defined in Component 2 of 2016 is more than outweighed by the burden placed on employers in complying with the duty to pay. declaration. “
For decades, the agency has collected employee data, disaggregated by race, gender, and ethnicity from companies with 100 or more employees, but it has never collected wage data as part of the report. EEO-1 before this year.
The ongoing wage data collection is the result of a federal court order ordering the Trump administration to reinstate the collection it blocked in August 2017. The National Women’s Law Center and the Labor Council for Latin American Advancement sued in November 2017, and a federal judge ordered the collection to be completed by September 30.
The EEOC appeals the judge’s decisions, but employers are still required to meet the deadline.
New load analysis
The EEOC’s new office of business data and analytics reassessed the burden employers would have to bear to complete data submission and found the previous estimate to be insufficient, according to the advisory.
“Consistent with the updated methodology used in the notice, the EEOC estimates that the burden associated with submitting Component 1 and 2 data for 2017 would be $ 614 million and $ 622 million for 2018,” indicates an official press release. “In contrast, in 2016, the EEOC estimated that the burden on employers for filing Component 1 and 2 reports would be $ 53.5 million in 2017 and 2018.”
The new analysis method “deconstructs the total number of reports submitted by type of report and by type of declarant, then estimates an average load based on the number and types of reports submitted”, according to the opinion.
Every three years, the commission must obtain approval from the OMB to collect employer data through the EEO-1 report, as required by the Paperwork Reduction Act. The agency is always looking to renew the diversity component of the report’s workforce, known as “Component 1”.
Employer representatives said they always knew the cost of collecting wage data for employers and the EEOC would be much higher than what the agency had originally predicted and the proposal was far too burdensome. .
The collection has always been “a very controversial thing,” said James Paretti, a former EEOC lawyer who now works with Littler Mendelson. Lawyers on the management side have consistently said that the burden required to collect the data outweighs the usefulness of the information.
“I don’t think the information gathered will help the agency enforce pay discrimination laws because it just isn’t helpful in doing so,” Paretti said. “It was the wrong tool for the job.”
National Women’s Law Center chief legal officer Sunu Chandy disagreed, saying stakeholders, including the agency, courts and lawyers, felt the information was important to collect.
“After years of study and expert analysis, it was decided that requiring large employers to provide this information would be beneficial,” Chandy said.
In fact, not having the data makes it harder for stakeholders to do their jobs, she said.
“This means that the EEOC or other agencies that have access to this information will be less effective at researching trends in pay discrimination, violations or thinking about cases to bring,” she said. “This process could have moved the ball forward towards greater transparency and greater equality in the workforce.”
Marc Freedman, vice president of employment policy at the US Chamber of Commerce, said the organization was “satisfied” that the EEOC decided to review the plan for collecting wage data .
Employers and business organizations had warned the agency that the process would cost both parties more than the EEOC initially estimated, he said.
This is a “significant miscalculation” on the part of the agency, he said.
Democrats weigh heavily
The EEOC’s decision was immediately condemned by Sen.
Dhillon is due to appear in a House Education and Labor Committee oversight hearing on September 19, according to a committee aide. The agency’s decision on the collection of salary data will be the subject of the hearing.
“The people appointed by President Trump use an agency tasked with protecting workers’ rights to protect companies instead and help them sweep pay discrimination under the rug,” said Murray, a senior member of the Senate committee health, education, work and pensions. “We need to close the wage gap that causes so many women and people of color to be paid less to do the same jobs as others, and let me be clear: you don’t solve problems by hiding them and you are not fighting for workers by protecting companies from all liability.
“Our federal agencies must actively engage and crack down on bad actors, not sit on the sidelines while women and people of color are paid less for the same work,” she said in a statement to Bloomberg Law.
—Ben Penn contributed to this story