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Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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Summary

MOTIVATION FOR THE STUDY

Differences in pay based on sex and race/ethnicity have been prohibited by federal law for almost 60 years. The Equal Employment Opportunity Commission (EEOC) has statutory authority to enforce pay equity. To achieve its mission, EEOC investigates charges of discrimination.

The initial phase of EEOC investigations may include analysis using the suite of data known as EEO.1 Particular EEO data collections differ by employer type and filing requirements. The EEO-1 is a mandatory form completed by private employers with 100 or more employees. The EEO-1 instrument collects sex, race/ethnicity, number of employees, and employer characteristics data. Although initial findings are followed by more in-depth review of individual establishments, EEO data have an important and unique role in initial investigations.

Prior to the data collection that is the focus of this report there were no other sources of federal data from employers regarding the relationship among pay, employer, and employee characteristics that could be used for enforcement purposes.

To access pay data and improve its ability to investigate pay disparities, EEOC expanded its EEO-1 data collection (known as Component 1) to include measures of pay and hours worked. This pay-data collection

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1 For brevity, we refer to EEO-1, EEO-2, EEO-3, EEO-4, and EEO-5 as the suite of data-collection instruments EEOC uses to collect information from employers on the characteristics of establishments and employees.

Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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(known as Component 2) occurred in 2019 and 2020 for reporting years 2017 and 2018.

CHARGE TO THE PANEL AND APPROACH

In 2012, EEOC requested the National Research Council to recommend how EEOC should collect pay data from private employers. In 2015, EEOC asked Sage Computing for further recommendations. In 2016, EEOC began collecting pay data using an expanded EEO-1 form. The pay-data collection was stopped in 2017 by the Office of Management and Budget (OMB) due to concerns about employer burden, but the historic employment form of EEO-1 was allowed to continue (Component 1). In 2018, the National Women’s Law Center successfully sued EEOC and OMB to continue collection of pay data. Accordingly, pay-data collection (Component 2) began in 2019 for reporting years 2017 and 2018.

In 2020, EEOC asked the National Academies of Sciences, Engineering, and Medicine to examine the quality of Component 2 data for their intended use and to provide recommendations for future data collections.

Panel Composition and Approach

A panel of experts was assembled to address the statement of task. The panel comprised economists, sociologists, statisticians, survey methodologists, lawyers, and employer advisors with expertise in measuring data quality, pay gaps, pay discrimination, and pay equity. Several panel members had previously used EEO data in their own research, and two had served on the 2012 National Research Council panel that reviewed EEO-1 data.

Given EEOC’s intended use of Component 2 data, three questions guided the panel’s review of data quality:

  1. What can the panel learn from prior studies of EEOC pay-data collection efforts?
  2. What can the panel learn from the collection of 2017 and 2018 Component 2 data?
  3. After examining the data, for what uses are the 2017 and 2018 Component 2 data well-suited? What improvements are necessary before future collection of Component 2 data?

To measure data quality, the panel was guided by a total survey quality framework, wherein the total survey error assessment of quality was extended beyond survey design to include survey implementation and evaluation.

Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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Sources of Evidence

The panel examined the intended uses of the data as described by EEOC: (1) as an initial step in EEOC’s assessment of individual charges, (2) to examine pay differences at the national level, and (3) to assist with employer self-assessment. The greatest emphasis of the panel’s investigation was EEOC’s anticipated use by intake staff to inform initial assessments of charges, based on the panel’s understanding of EEOC’s primary intended use of these data.

A series of open panel meetings were held with EEOC, the Office of Federal Contract Compliance Programs, employer pay-equity and human resource specialists, and civil rights advocates. Subsequently, the panel submitted questions to EEOC to clarify the statement of task and refine the panel’s evaluation process (see Chapter 1).

The Component 2 data collection was launched after several years of consultation. The collection was paused in 2017 and resumed by court order in 2019. To understand how these unique experiences may have contributed to data quality, the panel reviewed the 2013 National Research Council Report, the 2015 Sage Computing report, and the 2016 EEOC information collection request and accompanying instruments. The panel also reviewed the comments and testimonies received by EEOC and OMB regarding the collection after launch. It reviewed court documents rendering the decision to resume Component 2 data collection in 2019 for reporting years 2017 and 2018, and the court’s decision to complete collection in February 2020 (see Chapter 2).

When first approved, the EEO-1 data collection for Components 1 (the historic collection) and 2 (the pay-data collection) was planned as a single study, using a single data-collection contractor. When the collection was paused, the Component 1 instrument was separated from the Component 2 instrument. Component 1 data continued to be collected by Sage Computing, and the Component 2 data collection was paused between 2017 and 2019. After the pause was lifted by court order, the National Opinion Research Center (NORC) at the University of Chicago performed the Component 2 data collection. To understand how data collection field experiences may have contributed to data quality, the panel held open panel meetings with EEOC and NORC. The frame, instruments, instructions, and methodology reports were reviewed (see Chapter 2).

The panel also considered the concepts measured and the collection processes that could contribute to data quality. To investigate these issues, the panel held open panel meetings with federal statistical agency staff responsible for managing the Longitudinal Employer-Household Dynamics Survey and the Occupational Employment and Wage Statistics program. Open panel meetings were held with state fair-employment practice

Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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agencies and human resource information specialists. To better understand the filing process aspect of data quality, open panel discussions were held with employer representatives and filers of Component 2 forms on behalf of their clients (see Chapter 3).

The panel engaged in original data analysis. Component 2 data collected for 2017 and 2018 were examined and, to perform some limited assessments of Component 2 data, Component 1 data for these years were also examined. These data were received from EEOC and analyzed through the National Academies’ contract with RTI International. These data were compared to external and internal benchmarks (see Chapters 4 and 5). The panel then examined how Component 2 data compare to pay gaps measured using microdata on individuals from the American Community Survey (see Chapter 6). The panel also conducted an exemplar analysis of Component 2 data as might be done by EEOC intake staff, guided by a previously published EEOC report on the tech sector of Silicon Valley (see Chapter 7). Chapter 8 presents all conclusions and recommendations.

OVERALL ASSESSMENT

The panel’s conclusions regarding the value of Component 2 data as collected are discussed below. This is followed by the panel’s recommendations regarding appropriate use of those data. Next, future collections of pay data are discussed. Recommended improvements necessary in the short term are presented. These are followed by recommendations to broaden and strengthen data collected by EEOC to enforce pay equity. The latter recommendations require more effort by EEOC than the short-term recommendations but offer greater benefits.

The panel concludes that the data as collected have value, but it recommends the value be strengthened by both short-term and longer-term improvements in respondent coverage, data-collection protocols, measurement implementation, and conceptual coverage.

Value of Data as Collected

Although other federal surveys collect data on pay and demographic characteristics, those data are for individuals. Those surveys do not provide establishment-level data on the earnings paid to employees by sex and race/ethnicity. EEO-1 surveys collect data at the employer level.

CONCLUSION 1-1: The 2017–2018 Component 2 data are a potentially valuable resource. They are the only federal data source for pay data and demographic characteristics collected at the employer level,

Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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which is helpful for enforcement efforts, for employer self-assessment, and for providing a broad description of pay practices.

However, to be useful, data must be complete and robust. The panel found numerous and varied data issues in the 2017–2018 Component 2 collection. Figure S-1 provides a high-level summary of the panel’s estimates of various key dimensions of data quality for the 2018 Component 2 data: coverage, unit response rates, missing data, and extreme values. (Findings for 2017 Component 2 data were similar.)

The panel found Component 2 data to be incomplete in three ways. Only two-thirds (65%) of eligible firms were asked to complete the surveys. Most firms that were asked to complete a survey responded, along with some volunteers, for a total of 58 percent of eligible firms (covering 82% of establishments). However, some responding firms chose the option not to provide pay data for establishments with fewer than 50 employees, resulting in pay data for only about 68 percent of responding establishments. For these reasons, the coverage rate for pay data was only 58 percent for firms and 55 percent for establishments. In other words, only about half of eligible firms and establishments provided any data for pay analysis.

The panel also found concerns with Component 2 data reliability. Although, in most cases, the reported numbers of employees and hours worked appeared to be reliable, extreme errors in some of the reported numbers of employees and/or hours were discovered, which could lead to highly misleading results if not addressed prior to analysis. These concerns led the panel to exclude 35 percent of the provided pay data (at the establishment level) for the purposes of the exemplar investigations presented in this report, though the rules appropriate for editing and excluding data will vary depending on the purposes of the analysis.

CONCLUSION 4-1: As collected, 2017–2018 Component 2 data are limited by significant data coverage issues related primarily to EEOC’s master list of potential respondents. In addition to respondent coverage, the panel identified issues with both nonresponse and measurement, which should be recognized when using these data.

The panel recognizes that the 2017–2018 Component 2 data were collected after a court order to immediately proceed with data collection. Although response rates were high in this mandatory data collection, coverage was insufficient (especially for smaller size firms), data checking protocols were not well developed, and post-collection data cleaning was limited.

Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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FIGURE S-1 Anticipated total eligible firms and, establishments, and available pay data, 2018 Component 2.
SOURCE: Panel generated from Component 2 employer, establishment, and employee files for 2018; https://data.bls.gov/cew/apps/data_views/data_views.htm#tab=Tables; and https://www2.census.gov/programs-surveys/bds/tables/time-series/bds2019_ez.csv (for 2018).
NOTE: “Full or partial response” excludes firms with more than 1.4 million employees. “Provided pay data” excludes firms with more than 1.4 million employees and Type 6 reports (which did not collect pay data). “Used for exemplar analyses” excludes firms with more than 1.4 million employees, Type 6 reports (which did not collect pay data), and potentially unreliable data as described in Chapter 6.

Measurement Concerns

The panel identified a number of measurement concerns in the 2017–2018 Component 2 data collection. Firm and establishment identifiers in the Component 2 data are neither consistent nor unique, which impedes trend analysis and data quality assessment.

CONCLUSION 4-2: The 2017–2018 Component 2 data have inconsistent and non-unique firm and establishment identifiers, which impede the maintenance of the master list, trend analysis over time, and data quality checking possible when merging by identifiers.

Noting a recent ruling (Sempowich vs. Tactile Systems Technology, 2021a), the panel expressed concern that that W-2 Box 1 does not reflect employees’ total compensation.

CONCLUSION 3-1: The 2017–2018 Component 2 collection measure of pay (W-2 Box 1) only partially reflects total compensation and may therefore mask compensation differences.

Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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The 2017–2018 Component 2 data were collected using 12 pay-band categories. The panel found these bands to be overly wide for detecting most pay differences. This problem is more acute for small establishments and for the highest- and lowest-paying occupations.

CONCLUSION 3-2: Use of pay bands in the 2017–2018 Component 2 data collection provides information that is less useful than that provided by individual-level pay data. Using established, improved methods, other federal agencies have demonstrated that individual-level pay data can substantially reduce respondent burden, increase precision in estimating pay gaps, and protect confidentiality. The Bureau of Labor Statistics’ Occupational Employment and Wage Statistics collection is an example.

The 10 job categories used in the 2017–2018 Component 2 data collection are outdated and encompass a wide range of job responsibilities and pay rates. Investigators need more precise information to assess pay differences among similarly situated employees.

CONCLUSION 3-3: The job categories in the 2017–2018 Component 2 data collection are insufficient for describing the modern workforce.

The panel concluded that the Component 2 data collection did not fully measure sex nor race/ethnicity, which could impede comparisons of pay for similarly situated employees. Additionally, the form does not collect data on LGBTQIA+ status. The Component 2 data collection did not allow measurement of pay differences experienced by other groups protected by EEOC’s authority. It also did not collect data on legitimate causes of pay differences, such as education and tenure, which would inform EEOC’s initial investigations and also employer self-assessment.

CONCLUSION 3-4: The 2017–2018 Component 2 data collection does not fully measure EEOC-protected groups under the sex and race/ethnicity concepts. The instrument does not provide a way to identify more than one specific race for an individual, nor do the data support distinguishing Hispanic persons by race. The instrument does not collect data on LGBTQIA+ status.

CONCLUSION 3-5: The 2017–2018 Component 2 data collection does not allow measurement of pay differences experienced by other groups protected by EEOC’s authority. Measuring pay differences

Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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experienced by persons age 40 and older,2 persons with disabilities, and veterans is within the scope of EEOC’s authority and policy equities.

CONCLUSION 3-6: The 2017–2018 Component 2 data collection does not include measures of legitimate causes of pay differences, such as educational attainment and tenure. Such information would assist both EEOC enforcement efforts and employers’ self-assessments. Employer self-assessments could contribute to improved employment equity through self-monitoring and adjustment.

Appropriate Use

As described above, the panel found numerous data errors and measurement concerns in the 2017–2018 Component 2 data. The panel found that these issues preclude certain analyses, such as examining specific firms or establishments expected but not found in the Component 2 data, or examining firms or establishments with missing or problematic data. Still, to the extent that EEOC can fix the data issues or clean the problematic data, the data can be useful.

CONCLUSION 6-1: After cleaning, 2017–2018 Component 2 data could be used to obtain estimates of raw pay gaps at the national level by sex, race/ethnicity, and occupation.

CONCLUSION 7-1: After cleaning, 2017–2018 Component 2 data could be used, with limitations, as an initial step to prioritize investigations and the allocation of resources: (1) to calculate raw annual pay gaps for establishments under investigation by individual charges; (2) to make comparisons between investigated establishments and peer establishments in the same industry and metropolitan area, county, and/or core-based statistical area; and (3) for systemic investigations.

Producing national-level statistics involves additional considerations. Because of undercoverage and nonresponse, the 2017–2018 Component 2 data collection is not designed to produce national totals. Furthermore, while variations in response rates tended to be small, some differences did appear, and it is unclear what additional biases may have been created by the undercoverage of the EEO-1 frame.

Taking this into account the panel concluded that, after cleaning, Component 2 data could be used to obtain estimates of pay differences

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2 Text was changed here and throughout the report after release of the pre-publication version of the report to correct an error regarding the age range to be measured.

Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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at the national level by sex, race/ethnicity, and occupation. However, the panel noted that 2017–2018 Component 2 data have limited utility in analyzing pay differences within small establishments for enforcement or self-assessment purposes. This issue is not due to coverage or data errors but instead relates to the number of observations available for comparison within a given small establishment.

CONCLUSION 7-2: The 2017–2018 Component 2 data have limited utility in analyzing pay differences within establishments that lack variation in employee characteristics of pay, sex, race/ethnicity, and occupation.

The panel also identified uses for which the 2017–2018 Component 2 data are unsuitable. The panel examined hours-worked data from the Component 2 collection and determined that these data required more extensive cleaning than was possible for the scope of this report. In addition, the Component 2 instrument does not provide a way to separate full-time, part-time, and part-year employees when comparing annual wages, which affects the calculation of hourly rates.

CONCLUSION 7-3: Without extensive cleaning, 2017–2018 Component 2 hours-worked data are unsuitable for calculating hourly wages.

CONCLUSION 7-4: The 2017–2018 Component 2 data are unsuitable for direct determinations of bias or reasonable cause for enforcement purposes.

Necessary Short-Term Improvements

From these conclusions, the panel identified recommendations to improve future Component 2 data collections. The panel’s recommendations for necessary, short-term improvements are listed below. The panel views these changes as necessary but not sufficient to fully address future EEOC Component 2 data collections. This discussion is followed by a final section, which contains more ambitious recommendations to broaden and strengthen data collection and analysis.

Address Likely Sources of Error

As described under Conclusion 4-1 the panel found significant undercoverage of firms and establishments in the Component 2 data. The panel recommends improvement in both the respondent frame and outreach to

Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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newly eligible firms. Since firms and establishments are born and die continuously, the frame should be updated annually.

RECOMMENDATION 4-1: EEOC should improve the coverage of its master list, perhaps using an interagency agreement3 between EEOC and the Bureau of Labor Statistics to appropriately maintain business registers.

Survey statisticians commonly use weighting to adjust for the probability of selection in a sample and for nonresponse. Since the EEO-1 master list appears significantly incomplete, weighting would be appropriate.

RECOMMENDATION 4-2: When preparing national and sub-national statistics for the public, EEOC should adopt statistical weighting to adjust for possible undercoverage and nonresponse biases.

As noted under Conclusion 4-2, assignment of identification numbers made it difficult to match establishments filing 2017 and 2018 Components 1 and 2 reports. The panel understands this was done to protect confidentiality. However, there are preferred ways to protect confidentiality that do not prevent authorized users from matching records and thereby assessing data quality and trends over time.

RECOMMENDATION 4-3: EEOC should use consistent and unique firm and establishment identifiers, facilitating data merges and data checking.

The panel recognizes that EEOC originally designed the 2017–2018 pay-data collection as a single effort. Implementing the data collection as currently collected, in two separate efforts, could increase reporting errors.

RECOMMENDATION 2-1: EEOC should combine the Component 1 and 2 instruments into a single data-collection instrument, thus lessening respondent burden and reducing the chances for inconsistencies or reporting errors.

Data-collection protocols allowed establishments with fewer than 50 employees to be reported using either Type 6 reports (containing limited data) or Type 8 reports (containing the same level of detail as for larger establishments). Allowing Type 6 reports results in data gaps.

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3 Text was changed here and throughout the report after release of the pre-publication version of the report to correct an error regarding the status of the interagency agreement noted.

Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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RECOMMENDATION 2-2: EEOC should eliminate Type 6 reports and mandate Type 8 reports for all establishments in multi-establishment firms of 100 or more employees. Consolidated reports (Type 2) could then be eliminated, and firm-level data created by summing across establishment reports. These actions would increase coverage, simplify reporting, and reduce respondent burden.

The current survey design likely resulted in two types of errors. First, respondents sometimes entered non-zero data for employee counts, but entered 0 or no data in hours (or vice versa). Some employee counts appeared to represent hours worked.

CONCLUSION 5-1: Important data-quality issues exist in the 2017–2018 Component 2 data, including missing data, response inconsistencies, implausible extreme values, and measurement unreliability. These errors are large and, if not addressed, could generate misleading results. Filtering the data on number of employees by removing a small amount of data can address some, but not all, issues.

RECOMMENDATION 5-1: Before 2017–2018 Component 2 data are used to assist initial investigations of charges, for employer self-assessment, or for research on pay differences more generally, the data should be carefully reviewed and cleaned. Filtering on employee counts and on hours worked would be beneficial, but some issues would be best addressed by modifying the basic data-collection methodology.

CONCLUSION 3-7: Improvements could be made to the current Component 2 instrument to substantially reduce, and possibly eliminate, many of the errors and weaknesses observed in the 2017–2018 Component 2 data.

RECOMMENDATION 5-2: Before future collection of Component 2 data, EEOC should conduct a field test to investigate issues of burden, data availability, and instrument design. The field test should examine the sources of errors in the hours-worked and employee count data, and should assess the functioning of new survey questions. Solutions to be tested may include placing employee-count and hours-worked data side-by-side, as in the data-upload mode. Cognitive interviews may inform EEOC of employers’ interpretations of survey questions, difficulties faced in answering, and strategies used to obtain the reported data.

Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
×

Most filers selected different pay periods for Component 1 and Component 2 filings. When reports differed for a given filer, it was unclear whether the cause was a data error or a true change over time.

RECOMMENDATION 3-1: EEOC should implement a standard reporting period to improve comparability of data and reduce respondent burden.

In the Component 2 data collection, some employers filed using external vendors. These professional employer organizations (PEOs) sometimes reported their own employer identification numbers (EINs) or North American Industry Classification System (NAICS) categories instead of the EINs or NAICS categories of their client firms. Under current EEOC regulations, the firm certifying the accuracy of responses is the responsible firm, not the PEO.

RECOMMENDATION 3-2: EEOC should require professional employer organizations (PEOs) to submit data separately for each firm they represent, use the client firm’s industry code, and require employing firms to certify PEO submissions before filing.

RECOMMENDATION 8-1: EEOC should provide filers with a method to download and review responses before submission. This will support data quality and assist with employer self-assessment. Such a method is currently provided for the Component 1 instrument but not for the Component 2 instrument.

Address Measurement Gaps

As stated in Conclusion 3-1, the use of W-2 Box 1 does not capture employees’ total compensation. Box 5 reflects a more inclusive definition of pay and is already computed by employers. However, it may be useful to collect both Box 1 and Box 5 for one or two transition years as a way of measuring the impact of changing the fields.

RECOMMENDATION 3-3: EEOC should collect W-2 Box 5 data to measure total compensation, instead of W-2 Box 1 data.

As stated in Conclusion 3-2, the panel found that current pay bands are simply too wide to be useful in many situations.

RECOMMENDATION 3-4: If EEOC continues to collect pay data in bands, narrower pay bands should be adopted, and the number of

Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
×

bands should be expanded for top earners to better capture variation in pay.

As stated in Conclusion 3-4, the Component 2 data collection does not measure race/ethnicity in a manner consistent with the federal statistical standard. The panel understands that EEOC is assessing the measurement of race/ethnicity, and preliminary results indicate the need to determine a method to appropriately count persons of more than one race. As discussed in Chapters 2 and 3, the 2000 Equal Opportunity Survey conducted by the Office of Federal Contract Compliance Programs collected pay data using the combined measurement form of the federal race/ethnicity standard. This approach would improve EEOC’s comparisons of similarly situated employees.

Further, the panel notes that the Component 2 data collection does not collect data on employees’ LGBTQIA+ status, although EEOC is authorized to protect this group. Survey measurement of LGBTQIA+ status continues to mature. In the panel’s view, EEOC should collaborate with other federal agencies to develop and evaluate appropriate measures and collection methods for LGBTQIA+ status.

RECOMMENDATION 3-5: EEOC should update instructions to filers to conform to the federal standard on measuring race/ethnicity. This standard offers solutions for reporting race/ethnicity data in a combined format.

RECOMMENDATION 3-6: EEOC should work with other federal agencies to develop and test ways to measure employees’ sex, gender identity, and sexual orientation in a manner appropriate for EEOC data collections.

Broaden and Strengthen Data Collection and Analysis

The panel found that revision of the current data-collection approach would greatly improve the value of Component 2 data. These revisions affect several aspects of the current design, and are expected to reduce respondent burden and provide greater utility. As described in Recommendation 5-2, the panel urges field testing of future Component 2 instruments in advance of full-scale information collection, especially when substantial changes are planned.

The panel notes that Component 2 data are collected at the aggregate level using broad categories rather than at the level of the employee. The Component 2 form was designed for employers responding in a pre-computer-mediated environment. Collecting individual-level data would better

Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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fit methods currently used by employers to structure and submit data. Individual-level data also would improve the precision of pay and occupation data and reliability of hours-worked data. The Occupational Wage Survey conducted by the Bureau of Labor Statistics transitioned from the use of pay bands to individual-level pay data at the initiation of employers, demonstrating feasibility.

CONCLUSION 3-8: EEOC’s current approach for aggregate pay and hours-worked data severely limits the utility of the data collected, unnecessarily increases employer burden, and complicates the collection of additional key information. Collecting data from employers at the level of individual workers may be less burdensome than the current approach and would markedly increase the utility of pay data.

RECOMMENDATION 3-7: EEOC should develop, test, and (if found acceptable) implement modifications to the Component 2 instrument to collect individual-level employee pay data, which reflects employers’ current reporting practice to state and federal agencies. EEOC’s transition to individual-level pay data should be informed by the Occupational Employment and Wage Survey instrument and protocol. Field testing should estimate respondent burden relative to alternative methods and assess confidentiality protections to be applied.

EEOC’s job categories are neither directly comparable to other federal occupational data nor sufficiently detailed for analysis of similarly situated employees. The federal Standard Occupational Classification (SOC) system occupations are more specific and are updated periodically through an interagency process. Furthermore, if job titles are collected with establishment NAICS codes, automated occupational coding programs (such as that used by the Occupational Employment and Wage Statistics collection and others) can result in acceptable rates of agreement with SOC occupations.

RECOMMENDATION 3-8: EEOC should adopt the Standard Occupational Classification system for classifying occupations to provide greater precision for comparisons of similarly situated employees. To limit respondent burden, EEOC should explore established, improved data systems for occupational coding of individual-level job titles, such as those used by the Bureau of Labor Statistics’ Occupational Employment Wage Statistics collection.

As currently collected, Component 2 data for Fair Labor Standards Act exempt and non-exempt employees cannot be differentiated. Additionally, Component 2 data do not allow weighting exempt employees’ income by

Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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part-time or part-year status. Adopting Recommendation 3-7 will simplify the collection of data on exempt employees.

RECOMMENDATION 3-9: EEOC should distinguish between Fair Labor Standards Act-exempt and non-exempt workers, and between part-time and full-time workers. A measure for the number of weeks worked should be included to account for part-year employment. EEOC should only collect hours worked for non-exempt employees.

The responsibility of EEOC to protect employment opportunities has expanded to include additional protected groups. Adopting Recommendation 3-7 could simplify the collection of data on these groups.

RECOMMENDATION 3-10: EEOC should explore the measurement of pay gaps for additional groups protected under its authority or policy equities, including persons age 40 and older, persons with disabilities, and veterans. To do this robustly while minimizing respondent burden, other federal data collections measuring pay of these groups, such as the American Community Survey, may be instructive.

The federal government collects employment-related data from employers through several federal statistical agencies. These agencies have well-established expertise in workplace data collection and analysis. EEOC participation in the Jobs and Employment Data Exchange project may be valuable in this regard.

RECOMMENDATION 3-11: EEOC should work with employer groups and federal data-collection agencies to explore ways to collect individual-level data, such as education, job experience, and tenure, which will support detailed pay-disparity analyses and employer self-assessments.

To implement the panel’s recommendations, particularly regarding the protection of data confidentiality, EEOC might consider several opportunities. EEOC could establish a designated statistical unit to facilitate increased coordination with other federal agencies. This unit could advise on the sharing of EEO-1 pay data with employers for self-assessment purposes while appropriately addressing confidentiality concerns. The unit also could prepare de-identified data files to be shared with other federal agencies, to improve efficiencies in frame management and automated occupational coding. Similar improvements in data quality and appropriate access may be available by partnering with the Census Bureau and Bureau of Labor Statistics (BLS) programs.

Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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RECOMMENDATION 8-2: EEOC should strengthen consultation and data sharing with the public, and with federal and state employment data-collection agencies. To do so, EEOC could consider joining the Federal Committee on Statistical Methodology’s Committee on Data Access and Confidentiality to discuss modern methods to improve data access while protecting against disclosure. EEOC could consider designating its Office of Enterprise Data and Analytics as a federal statistical unit to collect, report, and protect data in anonymized format for research purposes (including employer self-assessment), while targeted investigations for enforcement purposes proceed as a separate data activity.

Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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Suggested Citation:"Summary." National Academies of Sciences, Engineering, and Medicine. 2023. Evaluation of Compensation Data Collected Through the EEO-1 Form. Washington, DC: The National Academies Press. doi: 10.17226/26581.
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The U.S. Equal Employment Opportunity Commission (EEOC) expanded EEO-1 data collection for reporting years 2017 to 2018 in an effort to improve its ability to investigate and address pay disparities between women and men and between different racial and ethnic groups. These pay disparities are well documented in national statistics. For example, the U.S. Census Bureau (2021) found that Black and Hispanic women earned only 63 percent and 55 percent as much, respectively, of what non-Hispanic White men earned.

Evaluation of Compensation Data Collected Through the EEO-1 Form examines the quality of pay data collected using the EEO-1 form and provides recommendations for future data collection efforts. The report finds that there is value in the expanded EEO-1 data, which are unique among federal surveys by providing employee pay, occupation, and demographic data at the employer level. Nonetheless, both short-term and longer-term improvements are recommended to address significant concerns in employer coverage, conceptual definitions, data measurement, and collection protocols. If implemented, these recommendations could improve the breadth and strength of EEOC data for addressing pay equity, potentially reduce employer burden, and better support employer self-assessment.

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