Written Testimony of Jocelyn C. Frye Senior Fellow, Center for American Progress

Meeting of November 20, 2019 - EEOC Convenes Public Hearing on the Proposed Revision of the Employer Information Report (EEO-1)

Thank you for the invitation to be here today.  My name is Jocelyn Frye and I am a Senior Fellow with the Women's Initiative at the Center for American Progress (CAP or the Center).  The Center is a non-partisan think tank committed to improving the lives of all Americans, through bold and progressive ideas, strong leadership, and intentional action.  CAP's Women's Initiative is focused on developing and moving forward comprehensive public policy solutions to expand and advance women's opportunities to be full participants in our society, in particular, by ensuring women's economic stability and security and promoting fair and equitable workplaces.

To accomplish this work, we are deeply committed to combating biases and discriminatory practices that erode women's wages and relegate too many women to jobs where their work is undervalued and underpaid.  We believe that it is essential to create working environments where workers-across sex, race, ethnicity, gender identity, economic status, disability, and age-are paid equally and fairly and have meaningful opportunities to succeed and progress as far as they want up the career ladder.  Most importantly, we view women's economic success as integral to the overall economic stability of working families and our nation's economic growth as a whole.

Accordingly, we strongly supported the 2016 revisions[1] to the Employer Information Report, also known as the EEO-1 form, to require the collection of employer compensation data.  We viewed these revisions-advanced during the Obama Administration as part of the three-year renewal of the EEO-1 form required by the Paperwork Reduction Act (PRA)-as a critical step forward in support of the important mission of the Equal Employment Opportunity Commission (EEOC or Commission) to promote equal employment opportunity, particularly equal pay.  Unfortunately, the current administration has sought to derail this progress, first by halting implementation[2] of the 2016 EEO-1 rule-until that action was reversed by court order[3]-and now by proposing to discontinue future collection of compensation data through the EEO-1 form, effectively attempting to undo the 2016 EEO-1 rule in its entirety.  We believe this proposal is misguided and ill-advised, will undermine robust enforcement, ignores the pressing need to expand efforts to uncover persistent pay disparities, and represents a significant, unwarranted step backwards in the fight for equal pay.

I. Introduction and Background

On September 12, 2019, the EEOC published a notice[4] in the Federal Register (notice or September notice) in accordance with the PRA indicating its intent to submit a new request to the Office of Management and Budget (OMB) seeking a three-year renewal of only one portion of the data previously approved for collection through the EEO-1 form.  Specifically, the notice proposes to continue collecting the EEO-1 form's Component 1 data, consisting of demographic workforce data broken down by race, sex, and ethnicity in 10 occupational categories, and to discontinue the collection of the form's Component 2 data, consisting of pay data by race, sex, and ethnicity across the 10 occupational categories divided into 12 pay bands.  The requirement to collect pay data through Component 2 was among the most important equal pay reforms adopted during the Obama Administration to strengthen equal pay enforcement and promote greater employer accountability.  It addressed one major shortcoming in the equal pay enforcement toolbox-the availability of comprehensive employer pay data to help expand and refine enforcement efforts, strengthen investigations, better target resources, and deepen understanding of workforce patterns and trends.  The September notice now proposes to eliminate that very important progress, attempting to justify the contraction of data collected through the EEO-1 form by raising concerns about overburdening employers and questioning the utility of some EEO-1 data.  As discussed below, these concerns are overstated, unpersuasive, and wholly misplaced and fall far short of providing a sufficient rationale for weakening the EEO-1 form's existing Component 1 and 2 data reporting structure. Moreover, preserving tools such as the Component 2 pay data collection is crucial to promoting broader, more rigorous equal pay enforcement and accountability, and rolling back this type of progress would be a serious setback at a time when stepped up enforcement is sorely needed to promote equal pay.

II. COMMENTS ON EEOC INFORMATION COLLECTION PROPOSAL TO REVISE COLLECTION OF EEO-1 DATA

The notice focuses primarily on arguments related to burden and utility to justify pursuing a narrow renewal of the EEO-1 form to include solely Component 1 data and exclude Component 2 data. 

A. The EEO-1 Component 1 and 2 Data Reporting is not Overly Burdensome and is a Reasonable Requirement for Employers  

The notice states that the EEOC re-examined its previous analysis of the burden associated with filing the EEO-1 form and concluded that prior analyses underestimated the actual burden.  Taking its cues from guidance from the General Accounting Office and OMB, the notice asserts that the burden now should be calculated differently, based on the number of forms filed by each individual filer rather than calculating the burden by individual filer or employer. For example, employers with one establishment or office file one form for that office, but employers comprised of multiple establishments will file one form for each establishment.  Thus, the total burden for the multi-establishment employer would add up the total number of forms rather than assessing the employer individually.  The notice then argues that, using this new assessment, the number of burden hours and total burden hour costs for filing the form are far higher than previously understood. 

1) Insufficient detail about the underlying analysis raises serious question about the burden estimates being used

The notice asserts that, using its new analysis, the amount of time needed to complete Component 1 of the EEO-1 form will be approximately 45 minutes for single-establishment filers and just under 5 hours for multi-establishment filers.  The notice does not provide substantial detail on how these hours estimates were determined.  It assumes that EEO-1 report filings will take longer for employers who file multiple forms-one for each establishment-but this assumption may not be accurate in practice.  Many multi-establishment employers are larger and often have greater access to advanced technology that could streamline reporting and reduce, not increase, burden.  The notice also argues that the cost in total burden hours to complete Components 1 and 2 is significantly higher than estimated in the 2016 notice.  Although not completely clear, the notice appears to suggest that the cost for filing the 2017 Component 1 data is approximately $297,381,066 and the cost for filing the 2017 Component 2 data is approximately $317,010,322 for a total of $614,391,388 in total burden hour costs. The notice also projects for the total burden hours costs to increase to $622,015,798 in 2018.  But, again, the notice provides little explanation about how these numbers were derived.  The apparent assumption that the relevant burden costs would go up over time and not down seems unlikely, given that the costs would typically be expected to decrease as filers develop a routine.  Nor is there meaningful discussion in the notice about the purported costs associated with Component 2 pay data collection.  Even though the notice effectively would undo the requirement to collect pay data, it only asks for comment on the proposal to collect Component 1 data going forward.  In fact, the notice largely ignores discussing the Component 2 pay data or any efforts to collect or analyze pay information.  The end result is that there is very little information provided about the decision to discontinue Component 2 data collection and the underlying assumptions driving that decision.

2) The notice fails to consider the real-world experience of EEO-1 filers that should result in reduced, and not increased, burden

The burden analysis put forward in the notice inexplicably ignores the best evidence available to analyze any burden associated with Component 1-the real-world experience of employers who have been required to file the EEO-1 form for more than five decades.  The notice does not explain how the burden for filing a form that has been in place for decades could suddenly increase. Nor does it point to any evidence that indicates that the burden of filing Component 1 data has become more onerous than history has previously demonstrated.  Moreover, the fact that many filers already had to submit their 2017 and 2018 forms with Component 1 and 2 data by September 30, 2019 means that as a practical matter the impact of any initial burden has already occurred and would be expected to ease with subsequent filings. 

3) The availability of new technologies and technical supports minimizes potential burdens associated with filing the EEO-1 form

The notice ignores other factors that could significantly reduce the burden associated with filing Components 1 and 2. Advances in technology and the availability of automated systems to upload and file the EEO-1 form may help to reduce the time and cost of filing.  Although it is difficult to calculate with certainty, there are already a myriad of companies who now offer services to assist with filing EEO-1 forms.  Potential improvements on the horizon also may include updated software or other tools to facilitate future reporting.  Discontinuing the Component 2 when such support is available and likely to expand is shortsighted and premature.

4) Complaints about employer burden ignore efforts to balance employer needs while fulfilling broader enforcement objectives essential to combating pay discrimination 

The notice includes only brief discussion about historical context, but it is important to understand that the effort to add pay data collection to the EEO-1 form during the Obama Administration did not occur in a vacuum. Rather, the 2016 revisions to the EEO-1 form were the culmination of efforts extending back more than two decades to identify a mechanism for collecting pay data that would minimize burdens on employers while providing enforcement officials with much-needed information.  Having access to comprehensive pay data is critical to understanding pay practices and uncovering pay discrimination.  Both the EEOC and OFCCP face limitations in terms of when they have access to pay data to investigate claims and assess compliance with the law.  Neither agency has the ability or desire to litigate every claim or review every company, thus, they need tools that can help streamline processes and expand capacity.  As different options were explored over the years-including different proposals published for notice and comment, multiple public hearings, and expert studies-one theme that consistently emerged was the need to balance multiple interests to devise a data collection method that was fair, reasonable, and efficient.  Largely in response to these objectives and employer concerns, the EEO-1 form was identified as a potential vehicle for collecting pay data precisely because it was responsive to many of the concerns raised by employers, while satisfying the needs of enforcement.  The form had been proven to be an effective enforcement tool; at the same time, because the form was already in use, it was familiar to employers and might require fewer systemic modifications.  Understanding this context is important because any new data collection regime will always require some balancing of competing interests.  There are certainly more robust strategies that could be pursued to gather pay data from employers, such as requiring employers to submit all of their pay data on an annual basis.  But, the decision to utilize the EEO-1 form was an effort to strike a balance-to collect data that could expand the enforcement tools available, but to do so using a familiar document that could help ease the transition to a new reporting structure. 

5) Proactive measures to strengthen Component 2 pay data collection would help minimize any potential burdens

Rather than abandon the Component 2 pay data collection, an alternative response would be to take proactive steps to support its implementation.  Providing extensive technical assistance, exploring public-private partnerships or research efforts to develop new software to help facilitate the collection of the relevant data, webinars with leading experts on data collection, and other measures could be taken to build on and strengthen data collection efforts.  The EEOC should not retreat from deploying a wide range of complementary strategies to support vigorous equal pay enforcement, including the utilization of pay data.

B. Undermining Pay Data Collection Helps Perpetuate Economic Burdens on Employees and Shield Persistent Pay Disparities from Scrutiny

While the notice focuses on the potential burdens of the EEO-1 data collection on employers, it is equally important to look more broadly at the burden on employees by failing to improve equal pay enforcement.  The persistent inequality in wages disproportionately impacts women workers across all races and ethnicities, resulting in fewer resources for families trying to make ends meet.  CAP analysis of quarterly median usual weekly earnings for women and men working full-time in 2017 and 2018 found that a Black woman working full-time during that two-year time period earned almost $35,000 less than a white, non-Hispanic man working full-time during the same period, a Latina working full-time earned almost $40,000 less than her white, non-Hispanic male counterpart, a white woman earned nearly $19,000 less, and an Asian American woman earned nearly $7000 less.[5]  Over that same two-year period, women working full-time earned more than $1 trillion less than men working full-time because of the stubborn persistence of the pay gap.  These disparities have consequences for all families, but particularly households with female breadwinners which rely on women's earnings to make ends meet.  More than two-thirds of mothers are breadwinners in their families, and the numbers are even higher for some women of color.[6]  For example, more than 80 percent of Black mothers are either co-, sole, or primary breadwinners for their families.  While the pay gap is due to many factors, such as differences in education and hours worked, there is a portion of the gap-an estimated 38 percent-that is unexplained and is often attributed to discrimination.   It is essential for the EEOC to make use of every tool at its disposal to address any portion of the gap.  Doing so would provide women and their families with much-needed resources to help with mortgage payments, student loans, child care costs, prescription costs, household bills, car repairs, groceries, emergency expenses, and more.

III. DATA COLLECTED THROUGH THE EEO-1 FORM HAVE PLAYED A CRITICAL ROLE IN COMBATING DISCRIMINATORY WORKPLACE PRACTICES

The September notice, without supportive analysis, dismisses the EEO-1's Component 2 data as having "unproven utility" that is outweighed by the burden.  But, the notice offers this matter-of-fact conclusion before the Component 2 data has even been analyzed.  There is a longstanding need for better information that can provide greater insight into pay differences across different job categories, particularly in low-wage jobs where workers may be less well-positioned or empowered to surface or redress pay disparities.  The EEO-1 form has a proven track record and has played an important role in helping to identify disparities in who gets certain jobs and who does not.[7] The EEO-1 form was first put into practice during the Commission's earliest years as a tool used to pinpoint discriminatory practices in different industries or jobs.  The information gathered was vital to surfacing patterns of discriminatory conduct, and helped form the basis for hearings to explore the findings of the research in more depth.  Today, the form continues to be used to shed light on workplace practices.

Further, the assertion that pay data is only useful if it precisely tracks the pay for each occupation is not consistent with what we know about the EEO-1's efficacy in the Component 1 context.  The data can show general pay differences within job categories, one of the key threshold facts needed at the outset of an investigation to show that there is merit in looking further to determine whether a pay difference actually violates the law.[8] The simple fact that a pay difference exists is not per se proof of discrimination, but information about pay differences is essential to laying the evidentiary foundation that is ultimately needed to prove that discrimination has taken place. Without access to pay data early on, enforcement agencies have far less information to make informed decisions about how best to tackle discriminatory pay practices. With the Component 2 pay data reporting, enforcement agencies are better positioned to use the data collected to gain a better understanding of why a pay difference has occurred and determine whether more examination is required.

IV. MORE INFORMATION ABOUT PAY DIFFERENCES CAN HELP TACKLE PERSISTENT WAGE DISPARITIES, PARTICULARLY THOSE EXPERIENCED BY WOMEN OF COLOR

Expanding access to pay information is particularly important to better understand where pay differences are occurring, and to help provide a roadmap for a more in-depth analysis of the reasons behind these pay differences. Gaining a deeper understanding of pay disparities is important for all workers, but particularly women of color, who experience the largest pay gaps. Too often, the unique challenges facing women of color get lost in the broader equal pay conversation because there is a lack of information beyond the basic data documenting the wage gap. But more analysis is sorely needed to gain a deeper understanding of why these gaps persist, such as identifying specific job categories where the widest disparities occur. The data gathered through the EEO-1 form can be an important tool-such data have been used, for example, to document where women of color are employed across the private sector.[9]  Such information can help chart progress but also show where work is still needed. The inclusion of pay data in the EEO-1 form allows for an even more nuanced understanding of the experiences of women of color at work and, if continued and analyzed, can help identify what type of corrective enforcement strategies could be most effective or useful.

V. CONCLUSION

Pay data collection is critical to robust enforcement of anti-discrimination laws and securing equal pay.  The 2016 EEO-1 revisions to collect Component 2 pay data represented long overdue progress, informed by years of comment and review.  Abandoning that progress is step backwards that women, men, and their families can ill afford.  We urge the EEOC to continue the progress already made and move forward with both the Component 1 and 2 data collection efforts. 

Thank you for your consideration.