EEOC Considers Changes to Equal Pay Data Collections

EEOC Considers Changes to…

Women’s rights advocates and researchers are often looking for new sources for data on pay disparities based on race, gender, and other factors. In 2016, the Equal Employment Opportunity Commission added a mandatory report to help with Equal Pay Act enforcement, but now that data collection may be going away. Find out what some of the experts had to say about that.

EEOC Collects Demographic, Pay Data to Address Wage Discrimination

Every year, the Equal Employment Opportunity Commission (EEOC) and the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) collect demographic and pay data from employers through Employer Information Reports (EEO-1 reports). This data tracks the number of employees in each of 12 pay bands based on each employee’s W-2 wages. The report also discloses the hours worked for hourly employees and whether overtime-exempt employees are full- (40 hours) or part-time (20 hours) employees.

The EEOC has been gathering the demographic diversity information from employers for 50 years. This has come to be known as EEO-1 Component 1. But did not start tracking equal pay data until 2016 (EEO-1 Component 2). The agency has now collected wage disparity data for 2 years, but a complete analysis of the information isn’t yet ready for public use. In addition, Title VII of the Civil Rights Act prevents the EEOC from releasing the raw data due to privacy and corporate confidentiality reasons, so researchers have not yet seen the results of this change.

EEOC Announces Intent to Stop Collecting Equal Pay Data

Even without seeing the results of the 2017 and 2018 dataset, last year the EEOC issued a notice that it planned to change the EEO-1 Reports to remove Component 2 and stop collecting equal pay data. As part of the agency’s mandatory notice and comment procedure leading up to any such changes, the EEOC held a hearing on November 19, 2019, where economic experts and employee advocates could weigh in on the proposed changes.

Pay Equity Advocates Push for Continued Equal Pay Data Collection

The EEOC heard from three witnesses who voiced the need for ongoing data collections advocates:

  • Jocelyn Frye, Senior Fellow for the Centers for American Progress
  • Jessica Stender, Senior Counsel for Workplace Justice and Policy with Equal Rights Advocates
  • Betsy Stevenson, Professor of Economics and Public Policy at the Gerald R. Ford School of Public Policy at the University of Michigan

These advocates emphasized the need for systemic collection of information on wage discrimination and equal pay disparities. Ms. Stendler explained how employer-level “pay secrecy” policies -- which discourage or even prohibit employees from discussing their compensation with their coworkers -- keep employees from getting necessary information to discover and prove their wage discrimination claims. She and Dr. Stevenson both explained that these kinds of reports also help employers to recognize unintentional pay disparities and unconscious bias.

Ms. Frye said undoing the 2016 additions to the EEO-1 report is misguided and ill-advised, saying the decision “represents a significant unwarranted step backwards in the fight for equal pay.” She emphasized that gender discrimination continues even after decades of civil rights enforcement. Undermining pay data collections perpetuates discrimination and masks disparities from further scrutiny.

Employers’ Consultants Say Equal Pay Reports are Too Burdensome

Three other witnesses testified on behalf of employers:

  • Lynn Clements, Director of Regulatory Affairs at Berkshire Associates
  • Michael Eastman, Senior Vice President of Policy and Assistant General Counsel for Center for Workplace Compliance
  • Joshua Mitchell, Senior Economist with Welch Consulting

These three uniformly emphasized the burden Component 2 puts on employers to compile equal pay data and submit it to the EEOC. Each testified that preparing the reports takes longer than the average 5 hours stated by the EEOC and required HR employees and corporate attorneys to spend hours preparing the reports and certifying their authenticity.

However, the employee advocates cast doubt on whether these increased preparation times would continue over time. Since the bulk of the reporting requirements fall on larger companies, it was reasonable to expect that these companies use software and automated HR and payroll systems to manage their employee pay. In the first years after Component 2 went into effect, those systems would need to be closely monitored and authenticated. But after a relatively short adjustment period, these systems could be set up to generate the report without any substantial time investment.

Usefulness of Equal Pay Data Called into Question on All Sides

One thing that all the witnesses seemed to agree on was that the usefulness of the equal pay data collected by the EEOC had yet to be determined. Employer representatives claimed that this was a reason to stop collecting the data. They equated a lack of finality with an assumption that the information collected was not useful. Mr. Mitchell in particular spent most of his written testimony laying out differences in the way employers keep their compensation records and the way the EEOC collected its data. Together, these witnesses testified that Component 2 does not further the goal of minimizing wage disparities between genders.

Employee advocates agreed that the usefulness of the 2017 and 2018 data had yet to be fully realized. However, while Dr. Stevenson suggested that changes may be appropriate in the future, all three employee advocates warned against stepping backward before the data already received could be fully analyzed. Ms. Stender concluded her testimony by warning against the dangers of doing nothing (or in this case stopping what had already been done):

“The gender wage gap has not changed in a statistically significant way for over a decade. At the current rate of change in the annual earnings ratio, it will take another 40 years, until 2059, for men and women to reach wage parity. It is therefore critical that the agencies charged with enforcing equal pay and anti-discrimination laws are able to take proactive steps to identify and better address pay discrimination, which is a significant contributor to the gender wage gap.”

With the hearing concluded, the EEOC will now determine whether to continue to collect wage data to guide its enforcement of the Equal Pay Act. However, even if the EEOC stops collecting that data, private foundations and the advocacy groups represented by the employees’ witnesses will continue to fight gender discrimination and represent women and minorities paid less for the same work.

At Eisenberg & Baum, LLP, our gender discrimination attorneys know how the EEO-1 reports can be used to show wage discrimination. We can help you file your Equal Pay Act charges, and develop a case against your employer if it appears you are being paid less than you should based on your gender. Contact us today to schedule a consultation with one of our attorneys.

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