Collection of Pay Data by Gender, Race and National Origin

On August 15, 2012, a panel commissioned by the Committee on National Statistics (CNSTAT) issued a report concluding that the U.S. Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP) of the U.S. Department of Labor (DOL) should not collect earnings data by gender, race and national origin from private employers until the agencies develop a clearly articulated plan regarding how the data will be used to further their enforcement responsibilities.  The panel also made several recommendations to assist the agencies in preparing to collect such data.

The panel’s study and report on collection of pay data followed the defeat of the proposed Paycheck Fairness Act of 2009 (H.R. 12), which would have required the EEOC to issue regulations mandating that employers provide the EEOC with information on pay based on the race, gender and national origin of their employees.  If the legislation had passed and was enacted, the EEOC – which, with limited exceptions, does not currently collect pay information from private employers – would have faced issues concerning currently available and potential data sources, methodological requirements, and appropriate statistical techniques to measure and collect employer pay data.  CNSTAT therefore convened its panel to review methods for measuring and collecting pay information from U.S. employers for the purpose of administering Section 709 of the Civil Rights Act of 1964 (Title VII).

The panel considered suitable data collection instruments, procedures for reducing reporting burdens on employers, and issues of confidentiality protection and data access.  It held several workshops led by prominent experts including senior members from the EEOC, U.S. Department of Justice (DOJ), DOL, OFCCP, Pay Equity Office of Minnesota, and the Canada Pay Equity Office.  It also heard from representatives of vendors who provide payroll and software products, as well as on issues of data confidentiality and data sharing.

The panel found that the collection of earnings data would be a huge task for the EEOC to handle given its current capacity, and employers would experience significant reporting burdens.  The Paperwork Reduction Act of 1995 specifically requires agencies to balance the useful purpose for the information they propose to collect against the burden imposed on the public and businesses.  Accordingly, the panel concluded that for the EEOC to collect this information, it must first have a clearly articulated vision of how the earnings data will be used.  Given these considerations, the panel recommended that the EEOC:

  1. Develop a comprehensive plan for use of the earning data.
  2. After developing a plan, initiate a pilot study to test the collection instrument and the plan, as well as to measure the data quality and respondent burden.
  3. Enhance its capacity to summarize, analyze and protect earnings data.
  4. Use a definition of compensation that is measurable, collectable and meaningful, such as rates of pay.
  5. Consider implementing appropriate data protection techniques
  6. Seek legislation that would increase ability to protect confidential data but allow data-sharing agreements with other agencies

In his 2010 State of the Union address, President Obama pledged to increase enforcement of equal pay laws, and he has since established the National Equal Pay Enforcement Task Force, which brought together representatives from the EEOC, DOJ, DOL, and the Office of Personnel Management.  Since then, various agencies have significantly stepped up their enforcement efforts.  It is clear that in commissioning such panels and studies, government agencies like the EEOC and OFCCP are actively seeking new ways to target for investigation employers who may not be compliant with EEO laws, as well as reduce the challenges agencies face to enforcement of these laws.

For now, the agencies do not yet have a clearly articulated plan or the capacity to make collection of earnings data feasible and meaningful to use in their enforcement efforts.  There is a lot of work to do before the agencies can satisfy all, or even most, of the panel’s recommendations.  But given the emphasis placed on issues surrounding equal pay by the Obama administration, it may be only a matter of time before agencies make providing such earnings data by gender, race and national origin mandatory.

The full report from the Panel on Measuring and Collecting Pay Information from U.S. Employers by Gender, Race, and National Origin can be found here.