Efforts to study gender and racial disparities in pay and promotions in the United States were put in place under the Obama Administration. They are not being continued with Trump in office.
Employers must report workers’ demographic and pay data to the U.S. government by Jan. 31 under an Obama administration-era rule that took effect this year. But unsurprisingly with another president in Washington, the new requirements won’t be sticking around.
Additional employment data reporting requirements initiated by the U.S. Equal Employment Opportunity Commission in 2016 took effect this fall after several delays and a federal lawsuit. Under the new reporting requirements, private employers with 100 or more employees must file new EEOC-1 Component 2 data on employees’ pay and hours worked for 2017-18 by Jan. 31. Though the EEOC announced it will not renew its request to collect the additional data moving forward, employers must provide 2017-18 data to be in compliance.
“This is not voluntary—this is something they have to do,” says Dianne DiNapoli Einstein, attorney and owner of Westerville-based Einstein Law, which concentrates on employment law.
Since 1966, the EEOC has collected Component 1 employment data annually from private employers with 100 or more employees. Employers must report on the race, ethnicity and gender of employees, as well as job categories such as executive/senior level officials, first mid-level officials, sales workers, craft workers and service workers.Stay up to date with the region’s movers and shakers, top employers, philanthropic causes, real estate developments and thriving creative and startup scenes. Subscribe to Columbus CEO’s weekly newsletter.
Mandated by federal regulation, the EEOC collects employment data through the EEO-1 Report and uses it to “analyze employment patterns, such as the representation of women and minorities within companies, industries or regions,” according to the EEOC website. The new Component 2 reporting requirements add information on hours worked and pay, including both wages and bonuses.
Einstein says the original EEO-1 survey to collect Component 1 data was designed to prevent discrimination in the workplace under Title IX.
“It’s due every May. Almost like a tax return, they [employers] have to do it,” she says.
Under the Obama administration in 2016, the EEOC announced plans to add new Component 2 reporting requirements and collect information on employees’ pay and hours worked in addition to job categories, race, ethnicity and gender.
Jim Petrie, partner and chair of the Labor and Employment Group with law firm Bricker & Eckler, says the goal of the additional Component 2 requirements was data that more specifically looks for disparities in pay and how various protected groups are faring from a statistical standpoint.
The Office of Management and Budget stayed the new Component 2 data requirements in 2017 under the Trump administration. That decision was challenged in a 2017 lawsuit by the National Women’s Law Center. In April 2019, the U.S. District Court reinstated employers’ obligation to report the Component 2 employment data.
The original deadline for employers to submit Component 2 data was May, which moved to September as the EEOC prepared to accept the data and employers worked to comply. As of September, the EEOC did not have enough data, and it extended the compliance deadline to Jan. 31.
“Businesses hate start-and-stop and uncertainty,” says Petrie. “This has been a journey for them since 2016.”
Private employers with 100 or more employees can report their Component 2 data by filing electronically via the EEO-1 Report-Standard Form 100 before the Jan. 31 deadline. The default “workforce snapshot period” is Oct. 1 to Dec. 31, but Petrie says the EEOC will also allow employers to choose a different period “to make this as administratively easy as possible.”
He says compliance with the EEO-1 Report is high, so he suspects final compliance on the Component 2 data will be well over 90 percent.
EEOC must collect 2017-18 data as a result of the ruling on the National Women’s Law Center’s lawsuit against the Office of Budget and Management, but it will not seek to collect the Component 2 data moving forward. Petrie notes that the request for Component 2 data was initiated during the Obama administration, and the focus of the current administration is not on pay equity issues.
The additional reporting requirements come at a heavy cost for larger employers. Petrie says the EEOC got push-back from employers on the amount of work the new—and retroactive—reporting requirements would create. For larger employers, the administrative burden could require hiring an additional human resources employee or using a consultant.
“The amount of time it takes people to gather the information—that’s where the costs come in because they’re not doing other things,” Petrie says. “With thousands of employees, you can imagine how difficult it would be to gather the information.”
Companies that have switched payroll systems in the past several years also face added obstacles to gathering the retroactive data.
The EEOC found the aggregate cost to employers to collect the data far exceeded its original estimate. The initial estimate was $53 million compared to updated estimates of $614 million.
Einstein says the goal of the data collected by the EEOC is to provide general reporting on the workplace related to race, gender and ethnicity rather than identifying specific instances of discrimination. Federal statute prohibits the EEOC from making the data public.
“In 23 years of practice, we’ve done a lot of discrimination work through the EEOC. I’ve never seen a client that has determined discrimination through data,” Einstein says.
Petrie says employers still have concerns with how their individual data could be used. Data may be less statistically significant for smaller employers. For all employers, the specific data employers must report and the way they are required to report it may affect the accuracy of the picture it paints.
“One of the concerns is that the government is going to require the data and then start coming after people saying the data looks funny – that they’re discriminating against someone or a group of people,” Petrie says, adding that there’s also no guarantee about how data could be used moving forward.
“Once that data’s in there, it’s in there. People can change their mind about what someone is going to do with this data.”
Darrick Hamilton, executive director of Ohio State University’s Kirwan Institute for the Study of Race and Ethnicity and professor in the John Glenn College of Public Affairs, says data can be critical with regards to trends, but that “it can be a difficult endeavor to use retroactive information to detect discrimination.” He see proactive efforts rather than reactive efforts being bigger potential agents of change.
Mary Sterenberg is a freelance writer for Columbus CEO.