As discussed in our previous advisory, covered employers have until September 30, 2019 to comply with the reinstated EEO-1 Component 2 pay data reporting requirements for calendar years 2017 and 2018. This data pertains to workforce pay and hours worked, broken down by job category, race, ethnicity and sex.
Earlier this month, the U.S. Equal Employment Opportunity Commission (EEOC) announced in the Federal Register that it will not seek to renew collection of pay data past September 30, 2019. However, the EEOC also clarified that it will continue its collection of Component 1 employee data, which is broken down by the same categories.
The intent behind collecting pay data is to assist the EEOC in identifying potential discriminatory compensation practices. But the EEOC must also consider the burden that data collection imposes on employers. And according to the EEOC, the original methodology used to assess the burden greatly underestimated the time and resources required for employers to collect and report the data, especially for employers with multiple establishments in different locations.
The EEOC will revisit this issue once it assesses the utility of its pay data enforcement program in light of the information collected for calendar years 2017 and 2018. If the EEOC later decides to renew pay data collection, it plans to proceed with notice and comment rulemaking as well as a public hearing. This should give employers plenty of time to prepare.