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Remember back in 2020, slogging through filing EEO-1 Component 2 pay data for 2017 and 2018?

Several months after the Component 2 upload portal closed, the Equal Employment Opportunity Commission (EEOC) asked the National Academy of Sciences (NAS) to review how to use the data employers provided, and recommend ways to improve future collection. NAS organized a working group with a mouthful of a name, the ‘Panel to Evaluate the Quality of Compensation Data Collected from U.S. Employers by the Equal Employment Opportunity Commission through the EEO-1 Form’ (the 2020 Panel), to get the job done.

One would think that the EEOC would a have had a plan in place on how to use the Component 2 data before requiring it. This is just one example of the long strange trip that the collection represents.

This blog recaps how we got here. An upcoming blog will review the suggestions that employer representatives are making to the 2020 Panel concerning the future of pay data reporting.

Where did EEO-1 Component 2 Come From?

The 2020 Panel is not the first time that NAS has reviewed pay reporting for the EEOC. In a 2012 report, NAS recommended keeping things simple by collecting pay rate detail (essentially, hourly pay). The Panel recommended that the EEOC perform a ‘pilot study’ to determine the level of difficulty for employers to assemble pay rate data, and how useful the data would be in identifying employers with discriminatory pay practices.

In 2016, however, an EEOC-commissioned follow-up report, the ‘SAGE Report’, contradicted the recommendations of the 2012 NAS study. Outlining what became Component 2, it recommended reporting employees’ W-2 income and hours worked by pay range and EEO-1 job category. The group used ‘simulated’ data (there was no review of actual data). The SAGE report concluded that merging demographic, pay, and time-worked information from multiple HR systems would be a ‘one time’ programming effort, and that the proposed reporting would be of ‘minimal’ burden to employers. Employers disagreed, but the Office of Program Management (OPM) approved Component 2 in 2016.

In 2017, OPM backtracked and put a hold on Component 2, stating that more time was needed to address concerns about the difficulty of creating the report and the usefulness of the data. The ‘stay’ on the filing requirement ended in 2019, when the National Women’s Law Center successfully sued OPM in federal court. (The suit maintained that OPM did not have the authority to delay the implementation of an approved regulation.) The Court put the EEOC on an expedited schedule to collect pay data for both 2017 and 2018. The EEOC worked heroically to open, maintain and improve the reporting portal but, as to be expected with a program put into operation essentially overnight, the reporting process was difficult for all concerned.

What Comes Next?

Our follow-up blog will address what employer representatives are recommending the that the 2020 Panel take into consideration for the future of pay data reporting.

Author

Paul McGovern
Managing Partner
Praxis Compliance

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