Remember in 2020, filling out the EEO-1 Component 2 payroll data for 2017 and 2018?
Several months after the Component 2 download portal closed, the Equal Employment Opportunity Commission (EEOC) asked the National Academy of Sciences (NAS) to review how to use data provided by employers and recommend ways improve future collection. NAS hosted a task force with a mouthful of a name, the “Panel to Assess the Quality of Compensation Data Collected from US Employers by the Equal Employment Opportunity Commission via Form EEO-1 (The 2020 panel), to get the job done.
You would think that the EEOC would have had a plan in place for how to use the data from Component 2 before requiring it. This is just one example of the collection’s long and strange journey.
This blog recaps how we got there. A future blog will review the suggestions that employer representatives are making to the 2020 Panel regarding the future of salary data reporting.
Where does component 2 of EEO-1 come from?
The 2020 panel isn’t the first time NAS has reviewed payroll reports for the EEOC. In a 2012 report, NAS recommended keeping it simple when collecting the details of the rate of pay (essentially, hourly wages). The Panel recommended that the EEOC conduct a “pilot study” to determine the level of difficulty for employers to collect data on pay rates, and to what extent the data would be useful in identifying employers with discriminatory pay practices. .
In 2016, however, a follow-up report commissioned by the EEOC, the âSAGE Report,â contradicted the recommendations of the 2012 NAS study. Describing what became component 2, it recommended reporting income W -2 of employees and hours worked by salary scale and job category EEO-1. The group used “sham” data (there was no review of the actual data). The SAGE report concluded that merging demographic, salary and time information from multiple HR systems would constitute a âone-stopâ programming effort and that the proposed report would represent a âminimalâ burden on employers. Employers disagreed, but the Office of Program Management (OPM) approved Component 2 in 2016.
In 2017, OPM backtracked and suspended Component 2, stating that more time was needed to address concerns about the difficulty of reporting and the usefulness of the data. The âstayâ on the filing requirement ended in 2019, when the National Women’s Law Center successfully sued the OPM in federal court. (The lawsuit argued that the OPM did not have the power to delay the implementation of an approved settlement.) The court put the EEOC on an accelerated schedule to collect salary data for 2017 and 2018. The EEOC has worked heroically to open, maintain and improve the Reporting Portal but, as one would expect with a program implemented mostly overnight, the reporting process was difficult for everyone involved.
What happens next?
Our follow-up blog will discuss what employer representatives recommend that the 2020 panel consider for the future of compensation data reporting.