EEOC’s Pay Data Grab a New Reality

Today the EEOC announced that starting in March 2018 the new EEO-1 Report will be put into place, and they will begin collecting pay data from employers.  The agency has encountered tremendous push back from Senators and corporations across the country that have provided testimony and voiced concerns regarding how EEOC will use and protect the data that they collect.  EEOC has failed to satisfy and alleviate employers concerns, leaving many to believe that EEOC’s data collection tool, and subsequent use of the pay data collected, will be flawed resulting in the generation of false positive analysis, leading to the scrutiny of employers pay practices.The EEOC has also shown total disregard for the results of the National Research Council’s study “Collecting Compensation Data From Employers”, a commissioned study that the EEOC requested following a recommendation from a White House Task Force.  The results of this study recommend that EEOC should have a clear plan on how the data will be used, how to test the quality of the data, how it will be used to identify unlawful pay discrimination, the burden that will be placed on respondents, how the data will be protected from cyber attacks, as well as protecting the data from freedom of information act requests.     The EEOC has ignored the recommendations and concerns from the National Research Council’s study and they have also ignored their responsibilities under the Paperwork Reduction Act.Respondents are now left with no clear guidance on how the EEOC’s collection of pay data will be used or how their pay data will be protected.  The collection of aggregated pay data by EEOC will not help identify illegal pay discrimination because it does not take into account the many different factors that affect pay, the result of which will produce “false positive” or “false negative” analyses regarding gender wage bias.CRI recommends that employers begin preparing for the March 31, 2018 EEO-1 report submission by creating an action plan that will start with, IT staff, payroll system vendors and HRIS vendors in order to ensure that the gathering and of data between systems can be reconciled.  Employers should also budget for additional staff and resources to ensure a system is in place and that funds are allocated to assess risk by conducting pay analyses.Contact CRI at info@crincorporated.com for assistance.You can read the EEOC’s press release here.