Employers will recall that in 2014, President Obama issued a memorandum directing the Equal Employment Opportunity Commission (EEOC) to develop a pay data collection. In September 2016, after receiving approval from the Office of Management and Budget (OMB), the EEOC announced that this pay data collection would be implemented in December 2017 (15 months later) through a revision of the annual EEO-1 report filed by many employers. After the election of President Trump, however, the OMB paused the rule, pending review under the Paperwork Reduction Act, in order to assess the burden of such a data collection on employers. The National Women’s Law Center and the Labor Council for Latin American Advancement sued the OMB in November 2017, claiming that the OMB’s stay was unlawful.

In a surprising development on March 4, 2019, the U.S. District Court for the District of Columbia issued an order lifting the stay of the pay data collection component of the EEO-1. In the order, Judge Tanya S. Chutkan rejected the OMB’s decision to stay the pay data collection requirement, finding that the OMB failed to show justification for the stay.  Accordingly, she ordered that the stay of the pay data collection requirement be vacated.

Key Takeaways

EEOC has already announced that the EEO-1 website will open on March 18, 2019, in preparation for the 2018 EEO-1 filings that are due on or before May 31, 2019, and which do not include pay data. Before Judge Chutkan’s order was issued, employers did not anticipate that the 2018 EEO-1 filing could include reporting on pay data that will be difficult to gather in accordance with EEOC requirements in less than 90 days. In fact, it is not clear from the order whether Judge Chutkan intends that the EEOC immediately begin collecting pay data from employers or whether the pay data collection will begin with a later EEO-1 filing cycle.

It remains to be seen whether the Justice Department, which defended this case, will appeal or seek clarification of Judge Chutkan’s order, and whether the EEOC and/or the OMB will take further action.