Evaluation of Compensation Data Collected Through the EEO-1 Form (2023) / Chapter Skim
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1 Introduction
1 Introduction
Pages 17-40
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This chapter describes how insufficient information contributes to difficulties identifying cases of pay discrimination, enforcing antidiscrimination laws, and charting progress toward pay equity at the societal level. It then reviews EEOC's statutory authority to collect information from the public for this purpose.
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• Occupation: A job or profession done for pay or profit. EEOC uses 10 job categories to measure occupation in the EEO-1 survey. • Pay/wages: Includes salary, overtime pay, bonuses, stock options, profit sharing and bonus plans, and other benefits (Equal Pay Act of 1963)
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prohibit use of these data for enforcement purposes. In practice, the ability to detect pay discrimination is complicated by a lack of transparency surrounding pay decisions, making it difficult for workers to know what their colleagues are being paid.
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The Lilly Ledbetter Fair Pay Act of 2009 eventually nullified this ruling, by stating that the 180-day clock is reset with each new paycheck. Pay secrecy is most common among private employers, many of whom either discourage or explicitly prohibit employees from discussing salary information.1 At the same time, there is often limited or no information concerning the practices and processes of private employers.
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was initially given authority to enforce the act, that authority was transferred to EEOC in 1978. Title VII of the Civil Rights Act of 1964 Title VII prohibits a wide range of discriminatory employment practices, including both discriminatory pay practices and segregation of employees into specific jobs, and it addresses discrimination based on sex (including pregnancy, sexual orientation, and gender identity; EEOC, 2022a)
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Under Title VII, an employee challenging pay discrimination can file a charge with EEOC but typically must show that he or she is paid less than another similarly situated employee because of race, color, religion, sex, or national origin; or the employee may provide direct evidence of discrimination. If the employee does so, then the employer must assert a legitimate, nondiscriminatory reason for the pay disparity.
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EEOC is also empowered to open "directed investigations" under the EPA and commissioner charges under Title VII. Each of these mechanisms allow EEOC to investigate potential pay discrimination without having received a charge of discrimination from an aggrieved person (EEOC, 2019a)
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in DOL is responsible for enforcing equal employment opportunity for veterans who are applicants or employees of federal contractors.
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OFCCP schedules contractors for compliance evaluations through a neutral scheduling process. While EEOC's statutory role in enforcing equal opportunity employment and pay equity dates back to the 1960s, until recently, the Commission has only collected pay data from state and local government employers.
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Foundations for Evidence-Based Policymaking Act of 2018 and Executive Order 13985 EEOC's motivation for collecting wage data predates, but is consistent with, a broader federal movement toward the use of data in evidencebased policy making. The Foundations for Evidence-Based Policymaking Act of 2018 (Public Law 115-435, 2019)
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Though not a direct motivation for EEOC's collection of pay data, these policies have clear implications for EEOC and its capacity to collect and utilize appropriate data to inform and support its enforcement responsibilities, which play a critical role in advancing equity. Statement of Task For reporting years 2017 and 2018, EEOC added pay bands and hours-worked data components to the EEO-1 form collected annually from qualifying private-sector employers, including federal contractors.
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and across firms/establishments (peers, geographical area/local labor market, industry)
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c. What were the conclusions of the Sage Computing report and how did they influence decisions made about compensation data col lected using the Component 2 instrument?
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The panel then examined how Component 2 data compare to pay gaps, as measured using the American Community Survey, noting the limitations of the data 7 Formerly Occupational Employment Statistics.
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Chapter 5 examines item quality, as measured by reliability indices and plausible values, and how these findings can affect intended use. Chapter 6 demonstrates an analysis of pay differences using methods standard to labor economic research and discusses the utility of the data for estimating population pay gaps.
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. EEOC currently collects workforce data from private-sector employers with 100 or more employees; from federal contractors with 50 or more employees, all state and local governments, school districts, and local unions with 100 or more employees.
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Other EEO Reports EEOC engages in two other information collections, one on union hiring halls (EEO-3 report) and the other for public school districts (EEO-5 8 The EEO-1 race/ethnicity categories are Hispanic or Latino, White, Black or African American, Native Hawaiian or Other Pacific Islander, Asian, American Indian or Alaska Native, and two or more races.
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Additionally, should recommendations be made for future collections of EEO-1 Component 2 data that relate to measures and methods used for other EEOC collections, understanding the full EEOC collection program will be useful. Current Uses of EEO Reports in Enforcement Efforts EEOC currently uses EEO-1 data on workforce composition in enforcement processes, including charge intake, systemic enforcement, selection of commissioner charges, and preparation of special reports.
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and to compare firms under investigation to peer firms in the same industry and geographical region. Commissioner Charges and Directed Investigations Though the vast majority of EEOC investigations are initiated by individual charges, EEOC is authorized to initiate investigations of possible discrimination under Title VII and the ADA, and under ADEA and EPA through "directed investigations" (EEOC, 2019a)
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NEED FOR PAY DATA FROM PRIVATE EMPLOYERS The collection of EEO-1 and related EEO reports enables EEOC and OFCCP to analyze the representation of sex and race/ethnicity groups in particular establishments under investigation and relative to local labormarket and/or industry averages. These analyses are well suited to assessing claims of discrimination based on hiring, promotion, termination, job assignment, and segregation, as these forms of discrimination deal with bias in the allocation of workers across jobs.
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The collection of pay data could enable OFCCP to use pay disparities, in addition to compositional patterns, to identify areas for further investigation. Intended Uses of Component 2 Pay Data Support Charge Investigations Identify establishment and job-level pay gaps: during charge investigations, Component 2 data could be used to identify establishment- and job-level pay gaps, as well as occupational and pay-band segregation at particular establishments.
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With access to both workforce composition data through EEO-1 Component 1 data and pay and hours-worked data through Component 2, however, EEOC enforcement staff would be better able to identify potential systemic cases. For example, where outlier firms exhibit large segregation or large pay gaps within job categories, that information could justify an expanded investigation of a discrimination charge.
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OFCCP could also use pay data to enhance the three-year-trend analyses currently conducted with EEO-1 data during compliance reviews. Analyze National, Regional, and Industry-Based Pay Gaps Component 2 data could be used to estimate national and subnational sex and race/ethnicity pay disparities by industry, occupation, region, or labor market.
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The chapter reviewed the authority given to EEOC to collect pay data to address pay gaps. Through this authority, EEOC collected its first paydata collection from private employers (Component 2)
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