OFCCP Reconsiders Using Pay Data in Fighting Discrimination

Allen Smith, J.D. By Allen Smith, J.D. September 2, 2021
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​In a reversal of its stance during the prior presidential administration, the Office of Federal Contract Compliance Programs (OFCCP) announced Sept. 1 that it intends to evaluate the usefulness of collecting compensation data to improve its efforts to investigate pay discrimination. We've gathered articles on the news from SHRM Online and other outlets.

2019 Notice Rescinded

The OFCCP rescinded a 2019 notice that had stated the agency would not collect summary compensation datareferred to as "Component 2" EEO-1 datawhich examines employees' hours worked and pay information broken down by job category, race, ethnicity and sex. "Upon further consideration, OFCCP believes the position taken by the agency in the November 2019 notice was premature and counter to the agency's interests in ensuring pay equity," the OFCCP stated in its Sept. 1 Federal Register notice. "There are substantial reasons to believe that the Component 2 data could be useful to OFCCP's enforcement."

(Federal Register)

EEOC Announced It Would Stop Collecting EEO-1 Component 2 Data

In September 2019, the EEOC announced that it didn't plan to collect EEO-1 Component 2 data in the future. The EEOC said it still intended to follow its longtime practice of collecting Component 1 data, which lists the number of employees by job category, race, ethnicity and sex. Michael Eastman, senior vice president of policy and assistant general counsel for the Center for Workplace Compliance, supported the EEOC's proposal to continue collecting Component 1 data and stop collecting Component 2 data. "Component 2 has imposed a significant and burdensome data-collection obligation on employers that will likely have little to no utility whatsoever," he said.

(SHRM Online)

EEOC Ordered to Collect 2017 and 2018 Pay Data

A court ordered the Equal Employment Opportunity Commission (EEOC) to continue collecting EEO-1 Component 2 pay data for 2017 and 2018 even after the deadline for employers to file the information had passed. By Sept. 30, 2019, most employers with at least 100 employees were required to submit Component 2 pay data.

(SHRM Online)

Usefulness of Pay Data Being Studied

The notice said that the OFCCP "intends to devote further agency resources to evaluate the data's utility because the joint collection and analysis of compensation data could improve OFCCP's ability to efficiently and effectively investigate potential pay discrimination." Nonetheless, the OFCCP has not said that it is yet using the pay data for enforcement activities, only that it is studying the usefulness in doing so.

(Jackson Lewis via The National Law Review)

[Are You Prepared for an OFCCP Audit? Take the quiz]

FOIA Exposure

One significant consequence of the OFCCP's notice is that it may expose contractor pay data to public disclosure through Freedom of Information Act (FOIA) requests. Although an individual employer's Component 2 data that has been provided to the EEOC is protected from further disclosure by the EEOC, the FOIA protections that apply to EEO-1 data in OFCCP's possession have been a subject of litigation.

(Littler via JD Supra)

[Want to learn more? Join us at the SHRM Annual Conference & Expo 2021, taking place Sept. 9-12 in Las Vegas and virtually.]

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