Small businesses are advised to prepare pay data on employees...

Small businesses are advised to prepare pay data on employees for submission to the EEOC. Its website is to be ready to start collecting the data by mid-July to meet a Sept. 30 deadline.  Credit: Getty Images/iStockphoto/designer491

What's changed on reporting business data to the government?

Regarding workforce pay, a fall deadline has been set by the U.S. Equal Employment Opportunity Commission for employers of 100  or more workers  to comply with a stalled Obama-era requirement to report pay data by race, ethnicity and gender.  The requirement was recently reinstated by a federal judge;  the data has not been required before.

It  had not been clear when employers would need to provide the wage data  to the EEOC, but the agency has advised the court it will   collect the information  by Sept. 30. 

Critics have called pay data collection a costly burden for business,  and the U.S. Department of Justice recently  filed a notice of appeal regarding the reinstatement of the requirement, but employers are still advised   to move forward to meet the deadline. 

“According to EEOC, the appeal does not have any effect on the Sept. 30 deadline for ... data collection,” says Joy Chin, a principal at Jackson Lewis law firm in Melville.

The new requirement, aimed at combating pay discrimination, was stalled by the Trump White House's Office of Management and Budget before it was to take effect March 31, 2018. 

But in a ruling on March 4, 2019, it was reinstated by U.S. District Court Judge Tanya S. Chutkan in Washington, D.C., Chin says.  Since then the EEOC has hired a third-party contractor to help the agency prepare its website to accept the pay data. The website should be ready to start collecting the data by mid-July, says Chin. 

Prior to Chutkan’s ruling, private companies with 100 or more employees and federal contractors with 50 or more employees and a contract of at least $50,000, already had to file workforce data — not including pay — annually to the EEOC by race, gender and ethnicity across 10 job categories, says Chin. This data, called Component 1,  are due May 31.

As part of the new requirement,   firms with 100 or more employees must now report 2017 and 2018 W-2 wages in 12 specific pay bands for each of those job categories by Sept. 30, says Chin. The new pay data are called Component 2.  

The DOJ declined to comment. 

EEOC Acting Chair Victoria A. Lipnic issued this statement: “We, at the EEOC, understand the difficulties of these first-ever pay data collections in this time frame. But we are committed to meeting the court’s order, working with employers and making this happen by the end of September.”

 Still, some uncertainty lingers, even with the deadline, says Lynne Anderson, a partner at Drinker Biddle & Reath in Florham, Park, New Jersey.

The DOJ could file an application for a “stay” (ie. temporary stop) of the collection efforts pending appeal, or it could say it would like to collect the data in a different manner or way, she says. The five-person EEOC Commission up until recently has been operating with only two members, but Janet Dhillon was recently confirmed by the U.S. Senate as chair of the EEOC, restoring a quorum in the agency, says Anderson. “There’s a lot of moving parts still in terms of what may happen.” 

She advises employers to continue to “monitor the situation” and keep on top of legal developments, but to stay the course with efforts to compile the data  because there’s a legal obligation to do so.

Subsequently, in regards to the September deadline, “our clients would prefer not to wait,” says Christina Zaberto, HR manager with Associated HCM in Plainview.  “They’re smart and proactive and want to ensure compliance, so most are preparing now, or at least have it on their radar for completion in the third quarter.”

Associated HCM is readying its clients' pay data. “Our departments are working on providing the [data] that is due by Sept. 30, ” says vice president Yvette Hector. 

Adds Zaberto, companies don't want to get stuck scrambling. 

Hear Ye, Hear Ye

The EEOC said that, in order to collect the pay data by September 30, 2019, it must engage a third-party vendor (NORC at the University of Chicago) at a cost of in excess of $3 million to modify the agency’s data collection capabilities.

Source: Joy Chin/Jackson Lewis

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