As we move into the summer months, many of us involved in all things EEO tend to start thinking about the upcoming EEO-1 filings. As we know, all private employers with 100 employees or more, and Federal Contractors with 50 or more employees and $50,000 in contracts must file EEO-1 reports with the EEOC. In years gone by, companies have picked a pay period between the start of July and last day of September and filed employee counts per EEO-1 category, by the last day of September.
Then, in January of 2016 (on the seventh anniversary of the Lily Ledbetter Fair Pay Act), President Obama announced the EEOC-led EEO-1 Revisions, which widened the scope of data collection within the EEO-1 reports.
Starting in 2017, filers with 100 or more employees (both private industry and Federal contractor) are required to submit data at the establishment level for employees’ W-2 earnings and hours worked. Federal Contractors with 50 to 99 employees still submit data that is gathered by the “old” EEO-1 filing – in other words, no hours worked and W-2 earnings data.
With the new report, companies must choose a payroll period selected by the employer, between October 1 and December 31 of 2017, and employees must be counted by sex, race, ethnicity, pay and hours worked. In addition, every employee identified in the workforce snapshot must be accounted for in one of the twelve pay bands, within one of ten EEO-1 job categories, per establishment. The data must be filed on the EEOC website between January 1 and March 31, 2018.
While those are the basics of the changes of filing requirements, one big question has been swirling around these new regulations and that is whether President Trump will repeal them. Since the proposal of these changes, the contractor community has considered them onerous, overly burdensome, and with questionable effectiveness as a tool to investigate potential pay discrimination. Much of candidate Trump’s campaign rhetoric, and President Trump’s Executive Order activity, has targeted the removal of “red tape” that he sees as constrictive to business.
So, it would appear that it would be a matter of a short period of time before these regulations were rolled back. But here we are, 161 days into the Presidency (as of June 30, 2017) and coming up on the time when the EEO-1 filing period has commenced in previous years, and we still have the “new” filing regulations in place.
One reason cited by some was the delayed appointment of Secretary Acosta to the Department of Labor (DOL). Acosta was appointed on April 27 after the original pick Andrew Puzder withdrew. The DOL was without a Secretary for three months, which resulted in somewhat of a delay in getting DOL’s affairs in order. However, while the OFCCP (a sub-division of the DOL) and the EEOC would be working together to utilize the data obtained from the new EEO-1 filing, the EEOC is an independent agency that stands separately from the DOL; it should not be directly affected by the appointment of Secretary Acosta.
Can the New EEO-1 Regulations be Rolled Back?
The regulations could be repealed in a couple of scenarios within the EEOC. One is the “Reducing Regulation and Controlling Regulatory Costs” Executive Order of January 30, 2017 whereby “whenever an executive department or agency publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least two existing regulations to be repealed.”
It is unclear if this Executive Order applies to independent agencies like the EEOC. Acting Chair Lipnic seems to think that they do, so therefore they could be expected to be rolled back. So why haven’t they already? Maybe it really isn’t clear if the EEOC has the legal authority to do so, and as a result the EEOC is acting cautiously.
What appears to be more telling is the fact that a repeal of the regulations could only happen if there was a majority vote to do so by the EEOC commissioners. Former Burlington Stores, Inc., EVP of general counsel, Janet Dhillon was nominated (as of June 29, 2017) to Chair the EEOC and take over from current acting Chair, Victoria Lipnic. The EEOC’s leadership is composed of the Chair, Vice Chair, and three Commissioners. Dhillon’s nomination needs to be confirmed by the Senate, so she is by no means a shoe-in.
It is uncertain whether acting Chair Lipnic would become a Commissioner or take over the vacant Vice Chair position, but it is reasonable to assume that she may take over the Commissioner position that will soon be vacated by Jenny Yang. Yang’s term ends on July 1, 2017, but she can be in the position for an additional 60 days, which might cover the time required to approve Janet Dhillon by the Senate. That means that the potential makeup of the Commission would be two Republicans (nominee Chair Dhillon, and Commissioner Lipnic), and two Democrat Commissioners (Feldblum, and Burrows), with the vote ending in a two-to-two tie.
However, if there was an appointment of another Republican as a Commissioner or Vice Chair sometime between July 2017 and January 2018, the votes will be there to repeal the regulations, but that person would still need to be confirmed by the Senate, just like nominee Dhillon.
How Should Contractors Move Forward?
It appears that the new EEO-1 regulations could well stay in place, and with the “old” EEO-1 filing date typically starting in July, there is no sign of a contingency plan to go down the “old” road. However, keep eyes locked on the Dhillon nomination and a potential second Republican nomination. If that happens in a timely manner, all bets are off.
If we do move forward with the collection of the new EEO-1 data, we will likely have at least one Commissioner who has been openly and vocally critical of these regulations. At the 2016 NILG (National Industry Liaison Group), Commissioner Lipnic shared with the attendees that she voted against the EEO-1 pay data report proposal, explaining that, as a policy matter, she felt “it was past its prime and should be relegated to the heap of bad policy ideas once and for all.”
Commissioner Lipnic acknowledged and agreed there is an unexplained wage gap but felt the focus should not be on collecting pay data from employers that confirms the pay gap, but instead on addressing what have been identified as the predominant reasons for the gap: that women generally come in and out of the workforce and self-select into lower paying positions.
As we currently stand, we should move toward collecting the new EEO-1 data at the end of 2017, with a view to filing in the first quarter of 2018. But, that then raises the question of what will be done with the data if we have EEOC Commissioner(s) who believe that the data collected is worthless.