OFCCP Reopens Door to Request Employers’​ Reported Pay Data

The U.S. Department of Labor’s Office of Federal Contract Compliance Programs rescinded Sept. 2 a Trump administration notice that it did not intend to request, accept or utilize pay data collected under Component 2 of EEO-1 forms.

In November 2019, OFCCP announced that it would not request, accept or use Component 2 data collected as part of EEO-1 forms for the 2017 and 2018 calendar years. In its Sept. 2 update, however, OFCCP did note that it had “previously expressed interest” in collecting summary compensation data ultimately by collaborating with the U.S. Equal Employment Opportunity Commission as part of the EEO-1 filing process.

“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 agency said. OFCCP added it plans to examine Component 2 data because analyzing that data, in conjunction with other inputs, “could help OFCCP identify neutral criteria to select contractors for compliance evaluations.”

The change is, in part, a reflection of the differing views of the OFCCP under the Trump and Biden administrations, respectively. In 2019, the agency disputed whether pay data collected via Component 2 would be useful; it said the data was collected in a “highly aggregated format” that “is not collected at a level of detail that would enable OFCCP to make comparisons among similarly situated employees as required by the Title VII standards that OFCCP applies in administering and enforcing Executive Order 11246.”

OFCCP’s reversal also has to be understood within the context of EEO-1 Component 2, an initiative that has experienced its own share of see-saw activity during the past four years. After a lengthy series of court battles required EEOC to institute pay data collection for 2017 and 2018, the agency ultimately declined to renew Component 2 for future years.

Under recently appointed Chair Charlotte Burrows, however, EEOC has indicated it will continue to pursue methods for examining pay equity in U.S companies. The agency last year announced it was considering a rulemaking to include a new pay data reporting requirement to be published by October 2021. Per its filing with the Office of Information and Regulatory Affairs, that effort is still in the prerule stage.

Both Burrows and the Biden administration at large have said they aim to address pay equity in the future. In 2019, while a commissioner at EEOC, Burrows told an audience during a conference session that she felt EEO-1 Component 2 was “very useful” to EEOC. But the Commission’s majority-Republican composition may oppose efforts to reinstate the requirement. Former chair and current commissioner Janet Dhillon, a Trump administration appointee, previously expressed concerns about Component 2.

EEOC’s first pay data report, based on 2017 and 2018 Component 2 data, is scheduled to be published on Dec. 31, 2021, according to an agency announcement in July 2020.

Meanwhile, employers also may need to pay attention to state and local developments on pay data collection. California instituted a pay data reporting requirement for all employers in the state that are required to file EEO-1 reports. California employers were required to report pay data to the state’s Department of Fair Employment and Housing by March 31.