White House Suspends EEO-1 Form that Cost Businesses $400 Million to Gather Wage Data

On August 29, the White House suspended a burdensome reporting requirement for employers that would have cost them $400 million while yielding information of questionable value. It did so in rejecting changes to the EEO-1 form made during the Obama administration.

In a letter to EEOC Acting Chair Victoria Lipnic, the White House Office of Management and Budget stated that the pay collection and reporting requirements “lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.”

The Obama administration claimed that rewriting the form to include 3,660 boxes for companies to check or fill out would help identify wage discrimination. But very little of the information it sought would have shed any light on potential wage discrimination.

Even demonstrated differences in average pay between members of different groups are legally or statistically significant only when they compare apples to apples and oranges to oranges, by controlling for relevant factors that may explain the difference. (See the federal appeals court decision in Smith v. Virginia Commonwealth University, 84 F.3d 672 (4^th Cir. 1996), and relevant language in the Supreme Court’s decisions in Ward’s Cove Packing Co. v. Atonio, 490 U.S. 642, 650-53 (1989) and Richmond v. J.A. Croson Co., 488 U.S. 469, 507 (1989)).

In April 2017, Sens. Lamar Alexander (R-Tenn.) and Pat Roberts (R-Kan.) urged President Trump to rescind the requirements of the Obama administration’s revised EEO-1 form. They observed that it would “place significant paperwork, reporting burdens, and new costs on American businesses, and will result in few jobs created and higher prices for American consumers.” The U.S. Chamber of Commerce estimated that it would take the 61,000 covered employers a total of about 8 million hours and $400 million to complete the new forms mandated by the Obama administration.