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Federal Court Ruling Could Result in Pay Disclosure Requirements by May 31

    Client Alerts
  • March 18, 2019

On March 4, a federal district court held that the Office of Management and Budget did not have the authority to stay implementation of Obama-era regulations that changed the annual EEO-1 employer disclosures to include salary information based on employee race and gender. The court agreed with employee advocate groups which argued that the stay lacked the required legal basis to stop finalized EEO-1 rules, meaning that the pay data could be required as early as this year’s EEO-1 filings.

The new rules provide that employers with more than 100 employees must provide information about employee pay based on 12 pay bands, linked to already-required employee demographic information. The disclosures would give the EEOC and private advocacy groups information about the pay practices of larger employers, presumably for enforcement purposes. Employers complained about the burden of collecting such information tied to demographics, along with the lack of context or explanation of business reasons for any apparent disparity.

EEO-1 forms are typically due on March 31, Due to the recent federal government shutdown, the 2019 deadline was extended until May 31. The federal government may appeal the district court decision, and seek a stay of the pay disclosure requirement. Given the short time between now and the end of May, the EEOC may also conclude that it simply cannot accept pay data until the next EEO-1 cycle in 2020. Employers filing EEO-1s for 2019 should monitor developments with this decision.