On September 12, 2019, the Equal Employment Opportunity Commission (“EEOC”) published a formal notice in the Federal Register that it does not intend to renew collection of EEO-1 Component 2 pay data at this time. The EEOC is pausing the requirements after discovering it severely miscalculated the cost burden to employers of collecting the data. The EEOC initially estimated that the annual burden costs for employers to collect Component 1 and Component 2 data would be $53.5 million; however, after reviewing and updating its methodology the EEOC determined the actual burden would be roughly $614 million. The EEOC has a duty to balance the utility of the data to its enforcement programs against the burden the data collection imposes on the employers who must submit it. The EEOC concluded that the benefit of collecting the Component 2 data utilizing the EEOC’s current methodology for collection is outweighed by the cost of the burden imposed on employers.
What does this mean for employers?
Required filers must still submit EEO-1 Component 2 data for 2017 and 2018 by September 30, 2019. Recall that this includes wages and hours worked for all employees by race, ethnicity and sex. However, employers will not be required to submit Component 2 data for future years unless the EEOC resumes the requirements or a lawsuit is brought against the agency to enforce the requirements.
Also, note that the EEOC explicitly stated that it plans to continue collection of Component 1 data. Therefore, required filers will have to continue filing Component 1 data in future years.