Ruling casts cloud on EEOC payroll reporting requirements.

Byline: Pat Murphy

A federal judge has resurrected payroll reporting guidelines adopted during the Obama administration that require large employers to break down wages and salaries according to the sex, race and ethnicity of their employees.

On March 4, U.S. District Court Judge Tanya S. Chutkan in Washington, D.C. vacated a stay issued by the Office of Management and Budget on revised pay-data reporting guidelines announced by the Equal Employment Opportunity Commission in September 2016.

In National Women's Law Center v. Office of Management and Budget, Chutkan found that the OMB's September 2017 stay order was "illegal" in that it was not in accordance with the agency's regulations and was otherwise arbitrary and capricious.

On its face, the judge's ruling means that employers with more than 100 workers must comply with the revised requirement by the next reporting deadline, which for the time being is May 31.

But employment lawyers see companies in a classic "hope for the best, prepare for the worst" situation as the government may obtain its own stay of the judge's order pending appeal or the EEOC could simply extend the reporting deadline on its own.

Eric R. LeBlanc, an employment lawyer in Cambridge, said he expected an appeal by the government.

However, he said it was no sure thing that the government would be granted a stay pending appeal. On the other hand, he pointed out that the EEOC had various regulatory options to negate the result of the judge's ruling if it wishes to do so.

"The EEOC does have within its discretion the ability to either push back the May 31 deadline and/or go back and make a revision to the form that could protect employers from having to report so much information," he said.

LeBlanc added that employers should not entirely rule out the possibility that the EEOC could accept the court's decision.

"The EEOC could tell employers, 'You've had the opportunity to prepare, we're here now, the court has spoken, and we want the information,'" LeBlanc said. "It's really up in the air as to which entities do what things to move this along."

Chip Muller, who represents employees in discrimination cases and advises employers on regulatory compliance, attributed the about-face to the "changing political winds," something lawyers and employers have had to get accustomed to.

"It certainly is a pain for employers to have to watch the ping-pong match of the regulatory agencies and the courts in this instance, but employers...