Lipsky Lowe, LLP discusses how the EEOC recently scrapped a rule regarding collecting pay data.

EEOC Scraps Rule to Collect Pay Data

By Douglas Lipsky

The on-again, off-again collection of pay data by the Equal Employment Opportunity Commission (EEOC) is off again, now that the EEOC has announced it will not renew the Obama-era rule. While it remains to be seen whether the Commission will reconsider collecting pay data in the future, employees have legal protections under the federal Equal Pay Act and applicable local and state pay equity laws. The best way to enforce your right to equal pay for equal work is to consult an experienced employment law attorney. 

A Setback in the Equal Pay Effort

According to a notice published in the Federal Register, the EEOC will not renew the collection of EE0-1 Component 2 pay data from employers. Nonetheless, businesses with 100 or more employees and certain federal contractors must still submit Component 2 data for the 2017-2018 calendar years in accordance with a court order earlier in 2019.

Additionally, the EEOC noted that it must obtain approval on a three-year extension of EEO-1 Component 1 data from the Office of Management and Budget (OMB). This comes after the office of Enterprise Data and Analytics, a division of the EEOC found that the agency’s cost-benefit analysis insufficiently calculated the burden of data collection for employers. The agency says its new methodology is more accurate and that it intends to renew the collection of Component 1 data, but will not do so for Component 2.

Under the previous rule, employers with more than 100 employees were required to supply additional pay data, breaking down workers by race and gender across 10 broad job categories. However, the EEOC noted that the Paperwork Reduction Act requires the agency to balance the usefulness of data collection with the burden imposed on employers. In this regard, the EEOC said the unproven utility of the pay data program far outweighed that burden and scraped collection of the Component 2 data. 

The OMB froze the data collection in August 2017, which prompted the National Women’s Law Center (NWLC) to file a lawsuit against the OMB. The NWLC prevailed, obtaining a court order reinstating Component 2 reporting requirements. Now, the advocacy group has raised concerns that the EEOC will not act on the Component 1 data being collected and questions the agency’s commitment to exposing unequal pay.

Fatima Goss Graves, president and CEO of NWLC, said in a statement had it not been for the NLWC winning its lawsuit, the Trump Administration would allow employers to conceal their wage gaps by gender, race and ethnicity. She called the EEOC’s suspension of the Component 2 data collection “outrageous.” 

The Takeaway

Whether the EEOC’s announcement is a death knell for collection of pay data and a setback for the pay equity initiative remains to be seen. In the meantime, it takes a skilled employment law attorney to protect your rights to equal pay.

About the Author
Douglas Lipsky is a co-founding partner of Lipsky Lowe LLP. He has extensive experience in all areas of employment law, including discrimination, sexual harassment, hostile work environment, retaliation, wrongful discharge, breach of contract, unpaid overtime, and unpaid tips. He also represents clients in complex wage and hour claims, including collective actions under the federal Fair Labor Standards Act and class actions under the laws of many different states. If you have questions about this article, contact Douglas today.