OFCCP does not intend to use Component 2 data and EEOC will not request renewal of Component 2
OFCCP says it does not intend to use EEO-1 Component 2 Data in a notice published in the Federal Register on November 25, 2019. Under a Joint Reporting Committee, the OFCCP and EEOC collects data from private employers and federal contractors to include number of employees, job category, sex, race and ethnicity by way of Component 1 of the EEO-1 report. In 2016, the EEO-1 report was expanded to include Component 2—collecting additional data on employee pay and hours worked. Despite ongoing concerns the data would provide little insight and usefulness in addressing workplace pay equity issues, covered employers were required to gather 2017 and 2018 pay data and file Component 2.
On November 20, 2019, the EEOC held a hearing to examine the efficacy of Component 2. During the hearing expert panelists, while agreeing on the need for effective pay discrimination law enforcement, gave compelling testimony as to the level of burden Component 2 placed on employers, and the potential lack of utility of the data collected. Prior to the hearing, EEOC also announced that it would not seek to renew Component 2. However, the collection of Component 2 data remains open until January 2020.
While the fate of using the current Component 2 seems bleak, the need for collecting meaningful pay data to enforce the law remains strong. OFCCP still collects pay data during compliance reviews. For this reason, along with ensuring fair pay exists in your organization, employers should remain vigilant about analyzing and monitoring their compensation.
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