That noise you just heard? It was employers across the country breathing a collective sigh of relief. The federal government’s Office of Management & Budget (“OMB”) announced this week that it is delaying enforcement of the wage and hour analysis portion of the new EEO-1 form (Component 2 of the form). However, Component 1, which seeks demographic information on race, gender and ethnicity, will continue to be enforced. Component 1 is the same form that employers have completed for years. Employers with 100 or more employees (and certain federal contractors with 50 or more employees) must file Component 1 of the EEO-1 form by March 31, 2018.
Component 2 has been the subject of much controversy over the last year or so. The purpose of the form is to ferret out wage discrimination against women and minorities and help bridge the wage gap that exists in many companies. While perhaps altruistic in its intent, the burden on employers to compile the information was enormous.
Don’t open that bottle of champagne just yet! The OMB is only delaying enforcement at this point to determine the cost burdens on employer, utility of the information, and confidentiality – i.e., the requirement is not officially dead. In addition, the EEOC has made it very clear that it has not taken its focus off of pay discrimination. A company’s wage data may still be part of the EEOC’s investigation of discrimination charges.
While the delayed enforcement may be welcome news, employers would be wise to review current pay structures and processes. This includes both making sure there is no wage discrimination and that employees are in the proper “exempt/non-exempt” category. These analyses are best done with legal counsel involved to ensure the protection of the attorney/client privilege. Otherwise, the analyses may prove to be a gold mine for plaintiffs’ attorneys during the discovery process.
