Brett Coburn, with Alston & Bird.

Beginning with Monday's portal opening, general counsel started working to make sure their U.S. employers file employee pay data—including for the first time earnings by gender and ethnicity—with the U.S. Equal Employment Opportunity Commission by Sept. 30.

In the past employers with over 100 employees have reported total numbers only on the ethnicity and gender of employees. Now, they also must include pay data and hours worked, broken down by ethnicity and gender.

“The EEOC's pay data collection rule creates another administrative burden for companies while raising questions about how the data will be used and analyzed,” Brett Coburn, a partner in Alston & Bird's labor and employment practice, told Corporate Counsel.

Coburn explained that the new rule would affect general counsel and their companies in two key ways. First, he said, “is the technical and practical aspect of how any company, particularly a large one, can pull together all the data to file the form.”

The commission referred questions to its website, and to its third-party vendor who is handling the forms.

The new form is much more complicated than the previous one. The form breaks the workforce into 10 categories, such as clerical, sales or supervisory. The total number in each category is then broken further into gender and ethnicity.

Each category is also broken into 12 pay levels. The employer must show how many men and women, and minorities and non-minorities, fall into each pay level, in each category. It must also show employees' total hours worked.

Beyond the technical aspects of tying the payroll system into EEOC reporting, Coburn said the rule's second impact on general counsel is a substantive one of how the data might open up the company to higher risk.

The legal risk, he said, includes “how this data can be used by the federal government, state regulators or plaintiffs' attorneys to make a claim that the company is discriminating.”

He said he expects equal pay issues to “be an enormous source of litigation in the next one to five years. Though the data will need to be more nuanced.”

He explained that the aggregated data by itself will not be that helpful as proof of discrimination. Coburn said, though, once a complaint is filed with the commission, interested parties could dig deeper into the numbers.

The commission generally doesn't start its own investigation until there is a complaint, he said, but there is another legal danger. The U.S. Office of Federal Contract Compliance Programs audits companies and does compliance reviews on its own of firms that do business with the federal government.

That office intends to use this pay data as one of the things they consider when they choose who to pick for a compliance review, Coburn said. “So this data can get you on their radar.”

Another risk for companies lies in the public relations nightmare should damaging data be leaked to the media or employee rights groups, Coburn said.

“The data is not supposed to be made public,” he explained, but some information on federal contractors could be obtained through Freedom of Information Act requests. “So it would be wise to look at this data, and how it could be used or spun, through a public relations lens.”

The Obama administration enacted the new rule, but in August 2017 the Trump administration stayed it before any counts were taken.

In April, in a suit brought by the National Women's Law Center, U.S. District Judge Tanya Chutkan of the District of Columbia vacated the stay and ordered data collection to proceed.

Chutkan set the Sept. 30 deadline for both 2017 and 2018 numbers. The federal government is appealing her ruling, but in the meantime the EEOC notified employers July 1 that it expects them to to meet the deadline.

“If I am a general counsel,” Coburn said, “I would make sure people involved in this are giving themselves plenty of time to do these logistics. I would start focusing now.”