Business Group Urges Trump to Scrap Pay Data Collection

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By Kevin McGowan

The Trump administration should scrap or delay an EEOC plan to collect employers’ pay data categorized by sex, race and ethnicity, the U.S. Chamber of Commerce said.

The Office of Management and Budget should review and rescind its 2016 approval of the Equal Employment Opportunity Commission’s completed plan, the Chamber said in a letter to new OMB Director John Mulvaney.

The EEOC plan, which revises the annual employer information report, or EEO-1 form, applies to all employers with 100 or more employees and is set to take effect March 31, 2018.

It’s important that the administration decide soon on the revised EEO-1 form’s future because covered employers are starting to spend on the software, staff and other resources needed to comply, James Plunkett, the Chamber’s director of labor law policy in Washington, told Bloomberg BNA March 2.

Most business groups, including the Chamber, oppose the revised EEO-1 and have said it’s a top target for reversal in the Trump administration.

Acting EEOC Chair Victoria Lipnic last month said the agency should reconsider its plan, but Democratic appointees who support it still hold a majority on the five-member commission.

“It’s no surprise to me that the burden of this rule is being questioned,” Lipnic said in a March 2 email to Bloomberg BNA. “I’m confident OMB will give it a full and fair review.”

Act Sooner Rather Than Later

Chamber members have expressed concern that the administration won’t act until after employers have invested the requisite money, some of which can’t be recouped, Plunkett said.

The administration probably is evaluating what it would mean politically to “roll back” the pay data collection, said David Cohen, president of DCI Consulting Group Inc. in Washington.

Supporters say the revised EEO-1 form would provide much-needed transparency in pay decisions and encourage employers to analyze their compensation practices and fix pay disparities that are based on gender, race or ethnicity.

But the “bottom line” is the pay data component of the EEO-1 form has “no predictive validity” in determining if pay differences stem from unlawful bias, Cohen told Bloomberg BNA March 2.

Cohen’s a co-chair of the Office of Federal Contract Compliance Programs Institute, a federal contractors’ group that also wants to get rid of the EEOC’s requirement that employers report their pay and hours worked data.

The OFCCP Institute in January asked the EEOC and the Labor Department to clarify the revised EEO-1 form’s future. Neither agency has responded yet, Cohen said. Cohen and other institute leaders have requested a meeting with EEOC officials to discuss the matter, he said.

The Labor Department, which would share the pay data with the EEOC, didn’t respond to Bloomberg BNA’s request for comment March 2.

Burdens Outstrip Benefits

The OMB should exercise its power under the Paperwork Reduction Act to reverse its prior approval of the EEOC pay data collection, the Chamber said in its Feb. 27 letter.

The EEOC “grossly understated” the costs its plan would place on covered employers, the Chamber said. The agency estimated a total compliance cost of $53.5 million a year, but a Chamber survey found covered employers would spend more than $400 million annually to comply, the business group said.

The EEOC also failed to demonstrate the data collection would have “any utility” in helping the agency carry out its statutory mission to combat discrimination, the Chamber said. The agency plan failed to ensure that the “privacy and confidentiality” of the pay data collected through the EEO-1 would be protected, the group said.

The OMB should acknowledge its error, review the EEOC plan again and either stay the new EEO-1 form’s effective date or rescind its prior approval, the business group said.

To contact the reporter on this story: Kevin McGowan in Washington at kmcgowan@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

For More Information

Text of the Chamber's letter is available at http://src.bna.com/mFi.

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