Dive Brief:

• In court documents submitted Wednesday, the U.S. Equal Employment Opportunity Commission (EEOC) said it could accept EEO-1 reporting forms for 2018 that include a pay data reporting component, known as Component 2, and the deadline to submit that data would be extended to Sept. 30, 2019. The judge in the case, Tanya S. Chutkan, still needs to rule on the agency plan's acceptability.
• The commission's brief was filed in response to the federal judge in National Women's Law Center v. Office of Management and Budget (No. 17-cv-2458 (D.D.C. Apr. 3, 2019)), an ongoing case over the White House Office of Management and Budget's decision to stay Component 2 reporting. The judge reversed OMB's decision and ordered EEOC to come to a determination on the question of pay data reporting by April 3.
• In its statement, EEOC said the deadline would need to be extended in order to "accommodate significant practical challenges," including concerns by its chief data officer, who said the agency's data processes for collecting EEO-1 demographic data are not capable of collecting Component 2 data. The brief said the commission could meet the September deadline if it enlisted the help of an outside provider. "Instead, the EEOC has determined that utilizing a data and analytics contractor is the only alternative," the court documents said.

Dive Insight:

The deadline extension, if deemed acceptable by the judge, would allow employers additional time to comply — and potentially cull pay data quickly if they haven't already prepared to do so. But the new deadline will also run up against the workforce "snapshot" window for 2019 EEO-1 reporting, Arthur Tacchino, chief innovation officer at compliance firm SyncStream, said in an email to HR Dive. EEOC may decide to delay the window, but Tacchino said he thinks that's unlikely; "So the reality is that most likely employers will wrap up the first season of this new EEO-1 reporting and turn right around to begin year two (for 2019)."

An attorney with Jackson Lewis noted in an article that the court documents did not include information about when pay data collection would begin and that Sept. 30 is the expiration date for OMB's approval of EEOC's pay data collection report. Maya Raghu, director of workplace equality and senior counsel at the National Women's Law Center (NWLC), told HR Dive in an interview her organization's position is that Chutkan must sign off on EEOC's proposal before it becomes official. Chutkan has ordered plaintiffs in the case to file a response to EEOC by Monday, Apr. 8.

EEOC's announcement notably does not impact filing of EEO-1 demographic data, known as Component 1, David Fortney, co-founder of Fortney & Scott, said in an interview with HR Dive. The Component 1 reporting deadline is still May 31, 2019.

"We're concerned that EEOC has known about this data collection for a long time, and the fact that they didn't have a plan in place in case the case didn't go their way is troubling," Raghu said.

Concerns about the commission's use of a contractor to collect Component 2 data came from the EEOC's chief data officer himself, who warned in the response that, "there is a serious risk that the expedited data collection process may yield poor quality data because of the limited quality control and quality assurance measures that would be implemented due to the expedited timeline." The commission also voiced concerns that the lack of a more extensive collection process would decrease response rates and increase errors.

Employers might have their own concerns, Tacchino said. "The concern that seems most tangible is related to bugs and glitches with a brand new system," he said, comparing the situation to IRS' Affordable Care Act Information Reports during that program's first years. Tacchino also said he was "surprised" by the chief data officer's comments because EEOC had previously done the work to create the new EEO-1 and collect pay data in 2017. Employers, Tacchino said, should be concerned about the agency's ability to receive that data. "I think employers should be prepared for a bumpy EEO-1 filing."

Pay reporting is also likely to catch many employers unprepared, said Fortney, who told HR Dive he isn't aware of many employers — if any at all — who planned for pay data collection to be put back into effect. Even so, employers can't cite data security concerns as an excuse not to comply with Component 2 data collection, he said. "That's not an option that we have."

The two main sources of data needed for EEO-1 Part 2 include W-2 data and hours worked data. Tacchino and one other legal source recently spoke with HR Dive about a basic approach to pay data reporting in the event an organization has not previously prepared for the possibility that the requirements would be reinstated.