OFCCP announced on September 1, 2021 that it plans to rescind a November 2019 notice regarding EEO-1 Component 2 data. EEO-1 Component 2 data was required to be submitted in 2019, and consists of aggregated employee wage and hours worked data, categorized by EEO-1 classification, race, ethnicity, and sex. The 2019 notice provided OFCCP would not “request, accept, or use Component 2 data, as it [did] not expect to find significant utility in the data given limited resources and [the data’s] aggregated nature.”

Now, OFCCP has announced its 2019 decision was “premature and counter to the agency’s interests in ensuring pay equity.” As such, the agency intends to evaluate the Component 2 data’s utility in investigating potential pay discrimination, noting the data may offer “insight into pay disparities across industries and occupations and strengthen Federal efforts to combat pay discrimination.”

It is important to note that OFCCP has not stated definitively whether it will request, accept, or use Component 2 data in the future. The announcement only provides that OFCCP is reconsidering its November 2019 decision not to request, accept, or use the data.

One might wonder why, given that the EEOC elected not to renew the Component 2 aspect of the EEO-1 report, the OFCCP is reconsidering its prior determination regarding the data. Indeed, in every standard compliance evaluation, OFCCP receives far more detailed and useful contractor compensation data which it uses to assess pay equity. The answer may be that OFCCP does not intend to request such information from contractors in audits (which, unless the Component 2 report is reinstituted, would be beyond the proper temporal scope of any future audit), but rather intends to analyze the data submitted by employers in 2019 to assess and refine its audit practices and procedures. In its rescission notice, OFCCP states its review of the data “could improve OFCCP’s ability to efficiently and effectively investigate potential pay discrimination. Also, analyzing compensation data in conjunction with other available information, such as labor market survey data, could help OFCCP identify neutral criteria to select contractors for compliance evaluations.”

We will continue to monitor this matter and report on developments as new details emerge.

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