Employment & Labor Alert
(by Stephen Antonelli and Alexandra Farone)
Large and certain mid-size employers must provide demographic data to the EEOC by September 30, 2019 regarding the 2017 and 2018 earnings paid to employees categorized by sex, race, and ethnicity. On April 25, 2019, the U.S. District Court for the District of Columbia ordered the EEOC to collect two years of employers’ pay data by this September deadline, reviving an Obama-era regulation that was stayed by the Trump administration. This requirement will apply to all employers with at least 100 employees, and federal contractors with at least 50 employees.
For more than 50 years, the EEOC has required large and mid-size employers to submit an annual report known as the EEO-1 Report, which identifies the number of employed workers in job categories based on sex, race, and ethnicity. This data is now known as “Component 1” data. The Obama-era EEOC proposed requiring an additional component to this annual report that would require employers to disclose the earnings of these employees, in an effort to identify pay disparities. Known as “Component 2” data, the newly collected information should include employees’ W-2 earnings as well as hours worked in 12 pay bands for each of the 10 EEO-1 job categories. In 2016, the Office of Management and Budget approved the proposed requirement, and the requirement was slated to take effect in 2018. However, in 2017 the Trump administration stayed the implementation of this requirement, citing the burden of compliance upon employers. The validity of the stay on implementation of Component 2 data collection has been the subject of litigation since November 2017. The District Court vacated the stay in March 2019, and recently ruled to extend the Component 2 reporting deadline four months until September 30, 2019.
The Court’s ruling has no effect on the May 31, 2019 standard deadline for employers to submit their 2018 EEO-1 Reports for Component 1 data. Employers must submit their 2018 EEO-1 Reports by the end of May and are encouraged to begin compiling and planning to report 2017 and 2018 Component 2 data—specifically W-2 earnings and hours worked—for compliance with the September 30, 2019 deadline in the event that this deadline is not lifted pursuant to an appeal. The EEOC expects to begin collecting Component 2 data for calendar years 2017 and 2018 in mid-July 2019, and employers can likely expect a process similar to the manner in which they currently upload EEO-1 Reports annually.
Babst Calland’s Employment and Labor Group will continue to keep employers apprised of further developments related to this and other employment and labor topics. For more information about the EEO-1 Report and what is required of reporting employers, contact Stephen A. Antonelli at (412) 394-5668 or santonelli@babstcalland.com, or Alexandra G. Farone at (412) 394-6521 or afarone@babstcalland.com.
