OMB Issues an Indefinite Stay of the Revised EEO-1 Form Intended to Address Wage Disparity for Women and Minorities

Since 1966, employers with 100 or more employees, as well as federal contractors and subcontractors with 50 or more employees, have been required to annually report employee demographic information to the EEOC using the EEO-1. The EEO-1’s expanded reporting requirements, had they taken effect in March 2018 as planned, would have obligated covered employers to also submit summary pay data for their employees categorized by gender, race, and ethnicity. 
 
The OMB’s stay of the revised EEO-1 is the Trump Administration’s latest effort to roll back Obama-era Executive Orders and regulations intended to address disparities in pay for women and minorities. The EEOC released the new EEO-1 in response to an April 2014 presidential memorandum issued by President Obama, which asserted that more robust comparative wage data would make it easier for the agency to identify and direct its enforcement resources toward employers who might be in violation of statutes prohibiting pay discrimination. The EEO-1’s new reporting requirements were met with concern by the business community, citing the anticipated costs of compliance and resources required to compile the data. 
 
President Obama’s April 2014 memorandum was followed not long thereafter by his issuance of the Fair Pay and Safe Workplaces Executive Order (EO 13673), colloquially known as the “blacklisting” Executive Order. As implemented by final rules published by the FAR Council and the Department of Labor in August 2016, EO 13673 required federal contractors and subcontractors to (among other things) report labor law violations to federal agencies for procurement officials to consider as part of the responsibility determination phase of the bid process. 
 
Following last year’s election, it was anticipated that President Trump would act quickly to rescind the final “blacklisting” rule as part of his effort to minimize what he considered to be overly burdensome regulations, and in fact, his administration did just that on March 27, 2017. The fate of the new EEO-1, however, was not immediately clear. Although Republicans in Congress and the acting chair of the EEOC indicated in February 2017 that they would be interested in reevaluating the new wage reporting requirements, no action was taken to revisit the changes to the EEO-1 until the OMB’s recent stay. In its August 29 memorandum, the OMB based its decision on concerns that “some aspects of the revised collection of information lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.” As such, the new EEO-1 form is stayed indefinitely pending further review, and covered employers should complete and submit the prior version of the EEO-1 by March 31, 2018 to comply with their reporting requirements for the 2017 calendar year. 
 
Despite the reversal of federal pay equity measures, the past several years have seen a flurry of activity at the state and local levels, as a number of state, counties, and municipalities have enacted or proposed legislation imposing or expanding prohibitions on discriminatory pay practices. California, New York, Maryland, Massachusetts, and Oregon have passed laws restricting an employer’s ability to prohibit employees from disclosing compensation information, prohibiting retaliation against employees who make inquiries regarding compensation decisions or practices, and expanding the remedies for employees who raise pay discrimination claims. A number of states and local jurisdictions have also taken steps to restrict an employer’s ability to ask job applicants regarding their salary history until after a job offer has been extended. Given that several other states have equal pay statutes that have been proposed or are pending, it is likely that legislative activity at the state and local level will continue for the foreseeable future.