On November 22, 2019, OFCCP announced it will not “request, accept, or use” EEO-1 Component 2 pay and hours worked data from government contractors in connection with audits (or otherwise).
OFCCP explained that it will not request or use the data because it is “collected in a format that is highly aggregated” and, therefore, is “too broad to provide much utility” to OFCCP. Additionally, OFCCP stated that analyzing EEO-1 Component 2 data would place an unnecessary financial burden on the agency’s limited resources. Finally, OFCCP stated that it is not necessary for the agency to receive EEO-1 Component 2 data because it already “receives up-to-date, employee-level pay data from contractors that are selected for compliance evaluations.” OFCCP will, however, continue to receive EEO-1 Component 1 data, which provides an aggregated snapshot of an employer’s workforce, broken down by race and sex.
OFCCP’s announcement is not surprising. In its proposed revisions to its audit scheduling letters, OFCCP indicated it would seek only EEO-1 Component 1 data. In addition, as OFCCP notes in its announcement, the data it receives from contractors during audits is far more useful for determining pay discrimination issues than the data provided in the EEO-1 Component 2. Indeed, the utility of the EEO-1 Component 2 data has been questioned widely, including by the EEOC.
Although the burden of producing EEO-1 Component 2 reports is minimal, OFCCP’s announcement is welcome news for contractors as OFCCP has made clear that not only will it not request the information, it will not use it. Accordingly, although contractors still must concern themselves with the analysis OFCCP will apply to the robust, employee-level data they must submit during audits, they do not have to worry about OFCCP using the EEO-1 Component 2 data, with all of its limitations, to reach pay discrimination conclusions.