Evaluation of Compensation Data Collected Through the EEO-1 Form (2023) / Chapter Skim
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2 Design and Implementation of the EEO-1 Component 2 Instrument
2 Design and Implementation of the EEO-1 Component 2 Instrument
Pages 41-78
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From page 41... ...
Furthermore, unlike many data collections, the EEO-1 revision would collect data at the employer level, which could be used for enforcement purposes. In planning these revisions, EEOC considered several design studies, including the 2013 National Research Council report.
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The EEO-4 report limits pay-data information to full-time employees, uses fewer and wider pay bands, and does not collect information on hours worked. Importantly, no federal data collection has captured the breadth of information from private-sector employers that is needed for EEOC's enforcement purposes.1 Although some federal statistical data collections of private employers include pay, sex, race/ethnicity, and occupation information, none collect all these variables, and the resulting data cannot be used for enforcement purposes by law (44 U.S.C.
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Occupational • Annual/weekly wage and • Full-time • Job title write-in Not included • Cannot be used for Employment salary earnings enforcement purposes and Wage • Part-time • Autocoded to Statisticsd (after • Collected as individual SOC 2020) level data • Reviewed by • Analyzed in pay bands human expert Current • Payroll • Hours Not included Not included • Cannot be used for Employment enforcement purposes Statisticse • Dollars paid for full- and • Full-time part-time employees • Part-time continued 43
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TABLE 2-1 Continued 44 Agency Data Collection Measures Included Limitations for Pay-Equity Pay Work Hours Occupation Demographics Enforcement Current • Wage and salary earnings • Usual hours • SOC • Federal standard • No firm-level information Population before taxes and other race/ethnicity Surveyf deductions • Actual hours • Cannot be used for • Binary sex enforcement purposes • Includes any overtime received at main job • Age • Education • Disability • Veterans status Census Longitudinal • Quarterly unemployment Not included Not included • Federal standard • States provide on a Bureau Employer- income earnings by firm race/ethnicity voluntary basis Household Dynamicsg • Sex • Cannot be used for enforcement purposes • Ageh • Educationi American • Wages, salary, bonuses, • Hours • SOC • Federal standard • Cannot be used for Community tips, and commission for race/ethnicity enforcement purposes Surveyj all jobs • Weeks worked • Sex • Produces aggregate tables for EEOCk including by • Non-binary Gender EEO-1 job categories • Age • Not disaggregated by sex and race/ethnicity
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jCensus Bureau, 2021b. kThe EEO tabulation is sponsored by four federal agencies: EEOC, the Employment Litigation Section of the Civil Rights Division at the Depart ment of Justice, Office of Federal Contract Compliance Programs (OFCCP)
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Year 2000 2013 2015 2016 Pay Annualized Rate of pay W-2 earnings, W-2 earnings employees' base rate or average slotted into pay Box 1, slotted plus other earningsa annual earnings bands as used by into pay bands computed using OESc as used by OESd total wage and hours Occupational Employment Survey (OES) definition of earningsb Sex Male and female Not specified Not specified Male and female; use remarks section to denote non binary gender Race/ Federal standard Not specified Not specified EEOC Ethnicity race and ethnicity categories categories using of race and combined methode ethnicity Occupation Nine EEOC job Not specified 10 EEO-1 job 10 EEO-1 job categories categories categories Hours Not specified Not specified Hours worked Hours worked; Worked approximate exempt staff hours based on full-time or part-time status if exact records are not kept a"[A]
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. cThe Sage Computing report does not identify which box of the W-2 it recommends.
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responded by progressively making that format the default. However, then and now, OEWS has continued to allow reporting using pay bands.
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EEOC adopted OES pay bands in the Component 2 data collection but used a more expansive definition of pay, based on Box 1 gross earnings as defined in federal tax law and reported via W-2 reports to the Internal Revenue Service. The W-2 Box 1 earnings definition includes all OES earnings components, plus bonuses, overtime, and shift-differential pay.
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Furthermore, the Sage Computing report suggested that, rather than individual-level estimates or pay rates, pay bands should be used -- under the dual assumptions that they would reduce reporting burden and address confidentiality concerns (Sage Computing, 2015) with minimal loss of accuracy (Micklewright and Schnepf, 2007)
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. 2016 EEO-1 Pay-Data Collection After considering recommendations from the 2013 National Research Council report and the 2015 Sage Computing report, EEOC filed a request5 to OMB to collect data using the EEO-1 form.
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These methods were also suggested in the Sage Computing report. EEOC proposed that, when evaluating a charge, investigating staff could compare EEO-1 pay data to other available data (e.g., Census Bureau statistics regarding comparable workers)
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subject to Title VII, as amended, with 100 or more employees EXCLUDING State and local governments, public primary and secondary school systems, institutions of higher education, American Indian or Alaska Native tribes and tax-exempt private membership clubs other than labor organizations; OR (2) subject to Title VII who have fewer than 100 employees if the company is owned or affiliated with another company, or there is centralized ownership, control or management (such as central control of personnel policies and labor relations)
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13. EEOC Component 2 Pay Data Project Methodology Report, Redacted.
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. Component 2 Instrument The Component 2 instrument extends the Component 1 instrument by adding pay bands and hours-worked data components (see Figures 2-2, 2-3, and 2-4)
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56 COMPENSATION DATA COLLECTED THROUGH THE EEO-1 FORM FIGURE 2-2 EEO-1 Component 1 instrument, pp.
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IMPLEMENTATION OF THE EEO-1 COMPONENT 2 INSTRUMENT 57 FIGURE 2-2 Continued
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58 FIGURE 2-3 EEO-1 Component 2 instrument Section D (online version)
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FIGURE 2-3 Continued continued 59
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60 FIGURE 2-3 Continued
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FIGURE 2-3 Continued 61
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62 FIGURE 2-4 EEO-1 Component 2 instrument data upload form (example)
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Both of these aspects -- using a reporting period different from the tax period reporting period, and using different reporting periods for filing Component 1 and Component 2 data -- can therefore affect data quality for intended use. The panel examined the month of pay reporting periods selected for filing Component 1 and 2 instruments for 2017 and 201813 (see Table 2-3)
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. Occupation: employment data must be reported by EEOC job category.
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, and establishments that reported only employee count data and not pay data (i.e., Type 6 reports)
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. Pay bands: filers were instructed to report total employees in the workforce snapshot for each job category and pay band.
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. • Type 8 reports require reporting individual counts by sex, race/ ethnicity, job category, and pay band.
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In March 2019, EEOC began preparing to seek continued approval of the EEO-1 data collection under the Paperwork Reduction Act. OEDA staff revisited the previous methodology for calculating burden estimates utilized by EEOC for EEO-1, taking into consideration Government Accountability Office and OMB guidance on the appropriate methodology for calculating burden estimates in federal information collections.
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Ultimately, two data-collection contractors collected EEO-1 reports (i.e., Sage Computing for Component 1 and NORC for Component 2) , which may have created confusion for filers.
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First, the resulting data would be of low utility, meaning they were highly unlikely to be of real help in identifying unlawful or improper pay practices.19 Second, EEOC's respondent-burden estimates were inaccurate, such that the proposed paydata collection would be tremendously burdensome to implement, so was not justifiable by the anticipated data utility. Third, confidentiality concerns regarding the disclosure of potentially sensitive compensation data had not been properly addressed.
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The court found there was public expectation, based on OMB Federal Register notices, that Component 2 data in aggregate form would be made available to the public such that NWLC, LCLAA, and others could use those data to address pay disparities on behalf of their stakeholders (NWLC et al.
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EEOC must alert filers if it has decided by April 29, 2019 whether to collect 2017 or 2019 data;" • "If EEOC has not decided by April 29, 2019 whether to collect 2017 or 2019 data, it must issue a statement of its decision on its website and submit the same for publication in the Federal Register by May 3, 2019;" • "Beginning on May 3, 2019, and continuing every 21 days there after, EEOC must provide reports to plaintiffs and the court of all steps taken to implement the Component 2 data collections since the prior report, of all steps to be taken during the ensuing three week period, and indicating whether EEOC is on track to complete the collection(s) by September 30, 2019;" and • The court ordered that the Component 2 data collection(s)
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POSSIBLE EFFECTS ON DATA QUALITY Specific design decisions and field experiences may have affected the quality of Component 2 data. Several of these experiences relate to response rates and item reliability.
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(Chapter 3) • Collecting pay data in pay bands is not suitable for analysis of central tendency or dispersion.
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• Data collected using the Component 2 Type 2 report required manual checks to confirm that employee counts across establish ments by sex, race/ethnicity, and job category were correct. Errors in counting employees across sex, race/ethnicity, and job catego ries could lead to misclassification of establishment and firm size, and therefore affect comparisons to similarly situated employees.
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When the Com ponent 2 data collection resumed, filers may have been confused, thinking they had responded to the filing requirement by filing Component 1 data, when they also needed to complete the Com ponent 2 instrument. This confusion may have affected response rates.
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RECOMMENDATION 2-2: EEOC should eliminate Type 6 reports and mandate Type 8 reports for all establishments in multi-establish ment firms of 100 or more employees. Consolidated reports (Type 2)
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