The White House Office of Management and Budget (OMB) put the new summary pay data requirements on hold in August, and many Democrats and equal pay advocates are expressing their displeasure.
It was nearly a year ago that the Equal Employment Opportunity Commission (EEOC) advised in its final revisions to the new EEO-1 Form, fields would be included for the first time to include pay data broken down by gender, race, and ethnicity. This change would apply to those employers with 100 or more employees who complete the EEO-1 Form. The 2017 form filing deadline was also moved from September 30, 2017 to March 31, 2018 in an effort to provide more time to compile pay data.
However, the OMB stayed the implementation of the new form in August in accordance with its authority under the Paperwork Reduction Act (PRA) of 1995. The OMB will now conduct a review of the effectiveness of those aspects of the EEO-1 form that were revised on September 29, 2016. In acknowledging the OMB announcement, the EEOC said the current EEO-1 Report must be completed by companies, including federal contractors, with 100 or more employees by the new deadline of March 18, 2018.
More than 100 Democratic members of Congress penned a letter to both the EEOC and OMB opposing the decision to halt the use of the new EEO-1 Form and demanding their rationale for putting the collection of pay data on hold. “With new data from the revised EEO-1, businesses will be able to empower their human resources departments to make data-driven changes, avoiding more costly interventions down the road,” stated the letter. “Thus, the announcement that OMB is stopping the collection of this information is all the more puzzling. We are particularly concerned that the actions taken by OMB to halt this effort to increase transparency regarding wage equality was itself conducted with little transparency.”
Advocacy groups like the National Women’s Law Center (NWLC) and the Lawyers Committee for Civil Rights Under the Law also expressed their concerns. In a Freedom of Information Act (FOIA) request, the two groups seeking information about the procedures used by the Office of Management and Budget (OMB) when it decided in August to halt the EEO-1 equal pay data collection.
In a press release, the groups stated: “The equal pay data collection—an initiative requiring large companies to confidentially report to the Equal Employment Opportunity Commission (EEOC) information about what they pay their employees by job category, sex, race, and ethnicity—had been approved last year after a thorough and transparent process by the EEOC with multiple avenues for stakeholders, including businesses, to submit public comment. In contrast, OMB’s decision transpired in secret after corporate groups, including the Equal Employment Advisory Council and the U.S. Chamber of Commerce, requested review and rescission of the previously approved pay data collection. OMB’s decision to review and halt the previously approved equal pay data collection offered no opportunity for public notice and comment.”
Not everyone is upset with the OMB’s decision. Earlier in the year, the U.S. Chamber of Commerce had requested the OMB undertake a review of the EEO-1 pay data requirements under the Paperwork Reduction Act. Sen. Lamar Alexander, R-Tenn., chairman of the Senate Committee on Health, Education, Labor and Pensions, and Sen. Pat Roberts, R-Kan., also submitted a letter to the OMB asking it to rescind its approval of the measure on the stated basis that it would place an unreasonable burden on businesses.
As the OMB proceeds, employers should recognize that some states have updated their equal pay legislation. Whether your state is becoming more active in addressing pay equity issues, there are steps all employers can take to prepare for potential pay equity issues:
Update yourself on what the local governments in the states in which you do business are doing to address pay equity issues.
Consider conducting a pay equity analysis of your employees under attorney client and privilege. Use the results to identify and address any wage differentials that might be cause for charges of pay discrimination.
Review hiring practices to be sure that applicants’ past compensation is neither solicited nor plays a role in compensation offers to new hires.
Document hiring processes, as well as employee performance, to identify any legitimate reasons for pay disparities that comply with the laws under which your company operates.
To learn more about achieving pay equity, and to receive a free pay gap risk assessment, click here.