OFCCP Reverses Course and Will Use EEO-1 Payroll Data for Investigations and Enforcement | Small
On September 1, 2021, the Office of Federal Contract Compliance Programs (OFCCP), the sub-agency of the Department of Labor responsible for enforcing the affirmative action and non-discrimination requirements imposed on federal contractors by Executive Order 11246, announced that it reverted to its previous position regarding the use of EEO-1 compensation data collected by the Equal Employment Opportunities Commission for calendar years 2018 and 2019 (“Component 2”).1
Specifically, OFCCP has announced that effective now, it is repealing its previous policy under which the agency “will not” request, accept or use EEO-1 Component 2 data. ” The previous policy was based on the OFCCP’s belief that it would not find significant utility in the data, “given the resources and [the data’s] aggregate nature.
Reversing the course, the OFCCP now indicates that it has determined that the prior non-use policy was “premature and contrary to the agency’s interests in ensuring pay equity”. The agency says its earlier decision not to use component 2 data was premature because, at that time, OFCCP had little information on the collection response rate, how data has been submitted and collated, or the completeness of the data. The agency also did not have the opportunity to review and analyze the data.
OFCCP’s announcement states that it will use the information gathered in the previous component 2 data collection to assess its usefulness in providing insight into wage disparities between industries and occupations, with the stated aim of “strengthening federal efforts to combat wage discrimination ”. Specifically, the agency says it will assess the usefulness of the data, “because the joint collection and analysis of compensation data could improve the OFCCP’s ability to effectively and efficiently investigate a possible wage discrimination “. The OFCCP’s position is that compensation data, together with other available information, such as labor market survey data, could help OFCCP identify neutral criteria for selecting entrepreneurs for employment. conformity assessments.
Given the aggregated nature of the data, it is likely that it will be of limited use in proving wage discrimination, which usually involves a very careful examination of a specific individual’s work and pay relative to others. . That said, OFCCP’s 180-degree turn provides yet another example of the aggressive stance the Biden administration has taken (and should continue to take) on pay equity issues, and its willingness to ” use the federal contracting carrot to regulate private sector employers who do business with the federal government.
Perhaps the most important consequence of this decision is that it has the potential to expose contractors’ compensation data to public disclosure through FOIA requests. While individual employer Component 2 data that has been provided to the EEOC is clearly protected from further disclosure by the EEOC, the FOIA protections that apply to EEO-1 data in the possession of the EEOC OFCCP have been the subject of previous litigation.
Littler’s WPI will keep relevant developments informed as they occur.