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Office of Management and Budgets (OMB) rejects EEOC’s revised EEO-1 Form

The OMB rejected the EEOC’s new EEO-1 form, which would have become effective March 31, 2018. The OMB reviews agency forms like this pursuant to the Paperwork Reduction Act and determined that the EEOC’s new EEO-1 had been unlawfully developed by the EEOC had underestimated the burden on employers it its published estimate. The PRA was enacted into law in 1980 and since then has required agencies to estimate the paperwork burden any new bureaucratic action would require. Here the OMB determined that the EEOC’s previously published estimate was simply, and significantly, too low. Specifically the new EEO-1 form would have required employers who are subject to EEO-1 reporting (typically employers of 100 or more) to report wage and hours worked for all employees by race, ethnicity and sex, all within 12 specified pay bands. The OMB determined that the public had not been properly apprised by the EEOC of the burdens such a requirement would entail.
The OMB’s ruling comes after much controversy over the new EEO-1 form. Commentators criticized the EEOC’s approach not only as being overly burdensome but also as overly simplistic. Commentators noted it would have created the impression that workers within the same pay bands should be paid the same amounts (irrespective of their gender, race, etc.) despite the fact that they may work in very different positions within those bands. Likewise it has been noted that the EEOC’s approach overly simplified compensation practices by not properly allowing for articulation of base wages versus bonuses, commissions, overtime and non-wage benefits that form part of a compensation package.
Although a part of the White House, the OMB is often seen as a non-partisan watch dog.
The OMB’s ruling leaves the EEOC’s proposed EEO-1 for 2018 dead in the water. The OMB has invited the EEOC to continue the OMB’s examination of the proposed EEO-1 form if it believes the form defensible. The OMB has also noted the EEOC’s prior EEO-1 would be acceptable for use. The EEOC has announced it is considering its options. Employers must wait for the EEOC’s decision to determine what form to use in the future.
Source: OMB Memoradum re EEO-1 Form, Review and Stay (8/29/17)