Coming Soon? EEOC Pay Data Collection (Again)

The EEOC announced plans to issue a proposed rule early next year to collect pay data from employers as part of its EEO-1 report. Data would likely not be collected until 2026 at the earliest, and collection could be halted by a new Republican administration, Republican control of Congress, or by a court decision.

Everything old is new again: The Obama-era EEOC originally sought to collect employer pay data back in 2016. That effort was halted when Republicans took control of the Commission during the Trump administration, then resumed by court order after lengthy litigation. After the terms of the court order were fulfilled, the Trump-era EEOC stopped collecting data and did nothing with the data it had already received. A subsequent National Academy of Sciences study, which HR Policy contributed to, found significant flaws in the way the data was collected.

New collection on the way? As part of the Biden administration’s latest regulatory agenda, the EEOC plans to issue a new proposed rule that would resume collection of employer pay data. Although there are no other details on what the proposed rule might look like thus far, if it resembles what we saw under the Obama-era EEOC, employers will be required to submit pay data to the EEOC broken down by race, ethnicity, and job category as part of their annual EEO-1 report. Sexual orientation and/or gender identity could be a new required category, given the EEOC’s new focus on these protected characteristics following the Supreme Court’s decision in Bostock which explicitly extended Title VII protections to those categories. 

Data collection a long way off: At the earliest, a proposed rule would be issued in early 2025. Under a traditional notice and comment rulemaking period, that would mean a final rule would likely not arrive until late Spring/early Summer 2025 at the absolute earliest, with actual data collection then likely not starting until 2026. 

Will it even happen at all? Assuming all of the above goes according to plan for the EEOC (which is unlikely), there are still several avenues through which the data collection could be nixed either before it even beings or shortly after. A Republican victory in the Presidential election in November would mean a Republican-majority EEOC by the end of 2026, which would almost certainly do away with any final rule, and/or halt any data collection that has already begun. Further, should Republicans gain control of both chambers of Congress, they could rescind the rule through a Congressional Review Act resolution which would also preclude any future rule requiring pay data collection. Finally, a federal court could invalidate the rule even if the Democrats retain control of Congress and/or the Presidency – a fate that is now more likely given the Supreme Court’s recent decision overturning Chevron. 

Takeaways for employers: Even if all goes according to plan and the pay data collection does in fact come to pass, employers will almost certainly have at least a year and half before they have to submit any pay data to the EEOC. Employers should take that time to consider the mechanics of internal pay audits and any potential changes to compensation design that may close any pay gaps that could be revealed by an EEOC pay data collection. However, this does not take into account state legislation that may attempt to require disclosure or shareholder campaigns seeking disclosure of the data.

Regulatory roundup: The new regulatory agenda contained a few other new potential regulations slated to be proposed next year, including:

• A rule from the DOL, HHS, and Treasury to implement No Surprise Act (surprise billing) requirements for health plans; and
  
  
• A DOL/OFCCP rule that would update its affirmative action and nondiscrimination rules for federal contractors (at the very least would extend requirements to sexual orientation/gender identity, there are no further details at this time).