While the updated methodology increased the burden for filing just Component 1 information, the EEOC asserts that it's "proven utility" justifies its continued collection. (Photo: Shutterstock)
The U.S. Equal Employment Opportunity Commission has published a notice in the Federal Register that it will not seek approval from the Office of Management and Budget to renew the requirement that employers with 100 or more workers collect pay data based on gender, ethnicity and race, added to the EEO-1 reports by the Obama administration.
However, the agency will ask permission to renew the requirement that employers collect other worker demographic data per the Title VII of the Civil Rights Act of 1964.
In a separate statement explaining its rationale, the EEOC said that it had updated the methodology used to calculate the burden on employers for collecting both sets of information, officially known as EEO-1 Component 1 (the older requirement) and EEO-1 Component 2 (the newer requirement).
In the former methodology used by the Obama administration in 2016, the EEOC estimated that the burden to employers for filing Component 1 and 2 reports would be $53.5 million in each of 2017 and 2018. However, in the agency's updated methodology under the Trump administration, the EEOC estimates that the burden for 2017 would be $614 million, and $622 million for 2018.
The difference between the methodologies? The agency under the Obama administration treated all employers alike regardless of their size or the number of reports that an employer was required to file, the agency under the Trump administration now asserts.
"Since multi-establishment employers are generally required to file reports for each of their locations (subject to size limitations) plus a headquarters and consolidated report, the amount of effort that multi-establishment employers must expend to comply with the EEO-1 data collection requirements is often greater than the effort expended by a single-establishment employer," the EEOC writes in its explanation. "This burden is magnified by the number of data fields required in a single Component 2 report (3,360 fields) versus a single Component 1 report (140 data fields)."
While the updated methodology increased the burden for filing just Component 1 information, the EEOC asserts that it's "proven utility" justifies its continued collection.
Component 1 "serves as a valuable resource for EEOC's analysis of industries and regions as well as for investigators in assessing allegation of discrimination," the agency writes. "Therefore, the EEOC believes that the continued collection of Component 1 is necessary for the proper performance of the agency's functions and fulfillment of the agency's mission."
The agency's decision not to renew Component 2 would only impact data collection for 2019 and beyond. Employers will still have to collect such data for the years 2017 and 2018, per the court's March decision on the lawsuit filed by the National Women's Law Center after the OMB in 2017 blocked the requirement.
In a statement released after the EEOC notice, Fatima Goss Graves, president and CEO of the National Women's Law Center, writes if it not for the group's lawsuit, the EEOC "would simply allow employers to continue to hide their wage gaps by gender, ethnicity and race."
"This is outrageous," Graves writes. "We now know that Trump's newly constituted EEOC leadership is planning to abandon its own mission to ensure equality, including equal pay, in the workplace. We won't allow it."
Legal experts who represent employers told HR Dive that few employers had prepared to cull their pay data despite the chance that a court could reinstate Component 2.
"In reality, filers likely have all the data they need available to them, and the process may be relatively straightforward if they know where to pull that data, sources previously told HR Dive," the publication writes.
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Katie Kuehner-Hebert
Katie Kuehner-Hebert is a freelance writer based in Running Springs, Calif. She has more than three decades of journalism experience, with particular expertise in employee benefits and other human resource topics.
