The U.S. District Court for the District of Columbia issued an opinion on March 4, 2019, that reinstated component 2 of the EEOC’s collection of employees W-2 pay data, as part of the annual EEO-1 Report filing. The EEOC initially announced the proposed revisions to the EEO-1 Report on January 29, 2016.
On September 29, 2016, OMB approved the proposed collection of employers pay data via Component 2 of the EEO-1 Report. The collection of pay data for employers with 100 or more employees and federal contractors/subcontractors with 50 or more employees, would begin with the 2017 reporting cycle. Employers were required to submit their reports by March 31, 2018.
August 29, 2017, the OIRA Administrator, sent a memorandum to the Acting Chair of the EEOC, informing the agency to stay the Component 2 pay data collection. The reasoning behind the stay was due to the EEOC’s decision to change the data file specifications, which the OMB had previously approved; the changes were not part of the public comment period.
Besides, OMB concern that the EEOC’s collection of the pay data “lacked practical utility,” did not address privacy and confidentiality, and was unnecessarily burdensome to employers.
September 15, 2017, the EEOC published an immediate stay of the pay data collection as mandated by the OMB memorandum.
November 15, 2017, the National Women’s Law Center (“NWLC”) and the Labor Council for Latin American Advancement (“LCLAA”) (collectively the “Plaintiffs”) filed separate lawsuits claiming that the actions of the OMB harmed their organizations, due to their not having access to the W-2 EEO-1 Report Wages of employers.
The Courts Finding
The court determined that the OMB’s decision to stay the EEOC’s collection of W-2 pay data violated their own regulations and was arbitrary and capricious, and lacked a reasonable explanation. The court granted the Plaintiff’s summary judgment. OMB and EEOC must now advise employers on how the pay data will be collected and when.
It is important to note that due to the far-reaching impact of the W-2 wage data collection, the court’s decision will most likely be appealed.