Federal Court Reinstates EEO-1 Pay Data Reporting Requirement

On March 4, 2019, a federal court in Washington, D.C., ordered the Trump administration to reinstate an Obama-era rule that had been placed on hold. The court ruling will require employers to annually report pay data by gender, race and ethnicity to the Equal Employment Opportunity Commission (EEOC).

EEO-1 Disclosure Requirements

For decades, the EEOC has required private employers with 100 or more employees to annually file an EEO-1 report, which breaks down the number of employees in different job categories by gender, race and ethnicity. Federal government contractors and subcontractors with 50 or more employees also are subject to this reporting requirement.

In 2016, after receiving approval from the White House Office of Management and Budget (OMB), the EEOC issued a rule expanding EEO-1 reporting requirements to include W-2 wages and total hours worked in the prior year for all employees in 12 proposed pay bands. The EEOC's stated intent of the proposed requirement was to "identify discriminatory pay practices where they exist in order to ensure that fair pay practices are put in place." The requirement was set to take effect with the EEO-1 reports to be filed by employers in 2018. However, in August 2017, the OMB put the measure on hold, on the grounds that it was unnecessarily burdensome for employers and the OMB needed additional time to review the new requirement.

The National Women's Law Center and the Labor Council for Latin American Advancement sued the OMB to reinstate the revised reporting requirements, and on March 4, 2019, the U.S. District Court for the District of Columbia ordered the OMB to do just that. The court held that the OMB did not assert a proper justification to block a measure that it previously approved, finding that the decision was "arbitrary and capricious" and exceeded the OMB's administrative authority. Accordingly, the court lifted the hold, reinstated the pay data collection rule and ordered that the previously approved EEO-1 form, which included pay data...