Evaluation of Compensation 

Data Collected Through the 

EEO-1 Form 

Outcomes of the Consensus Panel Report

The Committee on National Statistics

The Division of Behavioral and Social Sciences and Education

OCTOBER 2022 FCSM CONFERENCE
Panel Members

• WILLIAM M. RODGERS III (Chair), Federal Reserve Bank of St. Louis

• M.V. LEE BADGETT. University of Massachusetts

• PAUL P. BIEMER, RTI International

• LISA CATANZARITE, UNITE-LA and Association of Chamber of Commerce Executives

• SIWEI CHENG, New York University

• REBECCA DIXON, National Employment Law Project

• LISETTE GARCIA, Penn State University

• CLAUDIA GOLDIN, Harvard University

• JUDITH K. HELLERSTEIN, University of Maryland

• ELIZABETH HIRSH, University of British Columbia

• KRISTEN M. OLSON, University of Nebraska-Lincoln

• DONALD TOMASKOVIC-DEVEY, University of Massachusetts

• VALERIE RAWLSTON WILSON, Economic Policy Institute

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Peer Reviewers of the Report

• ERICA GROSHEN, Cornell University

• KENNETH W. WACHTER, University of California, Berkeley 

• KATHERINE G. ABRAHAM, University of Maryland

• FRANCINE D. BLAU, Cornell University

• KEVIN F. HALLOCK, University of Richmond

• ANI HUANG, HR Policy Association

• G. ROGER KING, HR Policy Association

• NICOLE MASON, Institute for Women's Policy Research

• JAKI MCCARTHY, U.S. Department of Agriculture, (retired)

• JUSTIN MCCRARY, University of Columbia

• LINCOLN QUILLIAN, Northwestern University

3
Report Sponsor

• Equal Employment Opportunity Commission 

Any opinions, findings, conclusions, or recommendations expressed in 

this publication do not necessarily reflect the views of any organization 

or agency that provided support for the project.

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Outline

• Motivation for the Study

• Sources of Evidence

• Overall Assessment

– Value of Data as Collected

– Appropriate Use as Collected

• Recommendations for Future Collection

– Short-Term Improvements Needed

– Long-Term Improvements Needed 

• Discussion

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Motivation for the Study

- The EEO-1 Component 2 Data Collection

- Charge to the Panel

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The EEO-1 Component 2 Collection

• Since 1966, EEOC has surveyed private employers for data on the sex 

and race/ethnicity of their employee (Component 1).

• In 2016, EEOC received OMB approval to collect pay data and the 

number of hours worked (Component 2).

• OMB rescinded its approval for the pay data collection (Component 2) 

in 2017. The historical collection (Component 1) continued. 

• A court order issued in March 2019 reinstated Component 2. In April, 

EEOC notified EEO-1 filers to prepare to submit Component 2 data. 

Data collection began in July. 

• In 2020, EEOC asked NASEM to examine the quality of Component 2 

data as collected, and to provide recommendations for future collection.

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The National Academies of Sciences, Engineering, and Medicine will appoint an expert

panel to review and evaluate the quality of compensation data that the U.S. Equal

Employment Opportunity Commission (EEOC) collected from certain private-sector

employers and federal contractors between July 15, 2019 and February 14, 2020.

The EEOC’s large scale collection of pay information affords an opportunity to review the

methods used and the circumstances of the collection, to document lessons

learned, and to identify ways to improve potential future collections.

The panel will review EEOC’s methodology for collecting the compensation

data through the EEO-1 form as well as EEOC’s various communications with

employers in carrying out the collection.

The panel will consider existing data quality frameworks to assess the data

collected and will issue a report with conclusions and recommendations to inform the

EEOC’s assessment of the data and its approach to future data collections.

Charge to the Panel

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Sources of Evidence

- Open panel meetings with stakeholders

- Design reports, forms, and rulings

- Original data analysis of EEO-1 

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Sources of Evidence: Stakeholder Input

• A series of open panel meetings were held with 

– EEOC,

– the Office of Federal Contract Compliance Programs, 

– employer pay equity and human resource specialists, 

– representatives of Illinois and California pay data collection efforts, 

and 

– civil rights advocates. 

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Sources of Evidence 2: Reports and Rulings

• The panel reviewed:

– the 2013 National Academies Report, 

– the 2015 Sage Computing Report, 

– the 2016 EEO-1 information collection request and accompanying 

instruments, 

– the 2019 EEO-1 Component 2 methodology reports, and relevant 

literature, 

– relevant academic and methodological studies, and

– court documents rendering the decision to resume Component 2 

data collection in 2019 for reporting years 2017 and 2018, and the 

court’s decision to complete collection in February 2020. 

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Sources of Evidence 3: Original Data Analysis (1)

• EEOC provided EEO-1 Component 2 data for 2017 and 2018

– Component 1 data for 2017 and 2018 were also provided to assist 

analysis of Component 2 data

• RTI International performed statistical analysis at the direction of 

the panel

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Sources of Evidence 3: Original Data Analysis (2)

• The panel compared EE0-1 data to benchmarks:

– EEO-1 data across Components 1 and 2 and across years 2017-2018

– Census Bureau’s Business Dynamics Statistics

– Bureau of Labor Statistics’ Quarterly Census of Employment and 

Wages 

– Census Bureau’s American Community Survey

• The panel conducted an exemplar analysis, using a prior EEOC 

report as a guide

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Overall Assessment

- Value as collected

- Appropriate use as collected

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Value of data: EEO-1 pay data are a unique resource

• EEO-1 data are the only federal data source for pay data, 

occupation, and demographic characteristics collected at the 

employer level, which is helpful for enforcement efforts, for employer 

self-assessment, and for providing a broad description of pay 

practices (Conclusion 1-1). 

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EEO-1 pay data are incomplete

• Significant coverage issues were found that should be 

addressed (Conclusion 4-1)

– Only two-thirds (65%) of eligible firms were asked to complete the 

surveys. 

– 58 percent of eligible firms provided data (covering 82 percent of 

establishments). 

– Pay data appeared for only about 68 percent of responding 

establishments.

– For these reasons, the coverage rate for pay data was only 58 

percent for firms and 55 percent for establishments. 

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EEO-1 pay data have reliability issues

• Most data appeared reliable, but some errors were extreme 

(Conclusion 5-1)

– Extreme errors appeared, with some employers reporting more 

employees than in the U.S. population. 

– Other data were internally inconsistent, impossible, or highly 

suspect.

– The reliability issues reflect in part the speedy fielding of the 

survey under court order, along with instructions to NORC to do 

minimal data cleaning.

– 35 percent of the establishments that provided pay data were 

excluded from the panel’s exemplar analysis because the pay data 

were potentially suspect or not verifiable.

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How design and data issues affected the analysis

FIGURE 8-1 Anticipated Total Eligible Firms and Establishments and Available 

Pay Data, 2018 Component 2

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Response 

rates were 

good, but 

coverage and 

design issues 

had the 

biggest impact 

on available 

data

36.2%

55.4%

81.6%

100%

46.9%

58.2%

58.4%

64.6%

100%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

Used for exemplar analyses

Provided pay data (excludes Type 6)

Full or partial response (includes Type 6)

Master list plus volunteers

U.S. Bureau of the Census total

Used for exemplar analyses

Provided pay data (excludes Type 6)

Full or partial response (includes Type 6)

Master list plus volunteers

U.S. Bureau of the Census total

Percent

Firms

Establishments
Other measurement issues also appeared

• Box 1 on W-2s does not measure all compensation (Conclusion 3-1)

• Pay bands were overly broad (Conclusion 3-2)

• Job categories were overly broad and outdated (Conclusion 3-3)

• Measures of sex and race/ethnicity did not align with federal best 

practices and standards, respectively (Conclusion 3-4)

• No data were collected for some groups protected by EEOC 

(Conclusion 3-5)

• Data on legitimate causes of pay gaps, such as education and 

experience, were not collected (Conclusion 3-6)

• Firm and establishment identifiers are neither consistent nor unique 

(Conclusion 4-2)

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Job categories are so broad that they encompass every pay band.

One pay band can cover over half the workers in a job category.

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Executive

Mid-level

Professionals

Technicians

Sales

Admin. Support

Craft

Operatives

Laborers & helpers

Service workers

$19,239 and under $19,240-$24,439 $24,440-$30,679 $30,680-$38,999

$39,000-$49,919 $49,920-$62,919 $62,920-$80,079 $80,080-$101,919

$101,920-$128,959 $128,960-$163,799 $163,800-$207,999 $208,000 and over
Pay bands are broad within jobs compared with 

national pay disparities

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SOURCE: Figure adapted from Figure 6-6 in panel report, based on 2018 ACS data. Estimates are after adjusting for job 

category, industry, and state.

13%

9%

16%

3%

13%

20%

25%

0% 5% 10% 15% 20% 25% 30%

Two or more races

Native Hawaiian or Other Pacific Islander

Black/African American

Asian

American Indian or Alaska Native

Hispanic

Female

Percentage difference from White men

Employee characteristic

Pay Band

Width
Appropriate Use of the Data: Use with Caution (1)

• After cleaning, Component 2 data can be used to estimate raw pay 

gaps at the national level by sex, race/ethnicity, and occupation 

(Conclusion 6-1)

– Because of under-coverage and nonresponse, the 2017–2018 Component 

2 data collection is not designed to produce national totals. 

• After cleaning, Component 2 data can be used to prioritize EEOC 

initial investigations and allocate resources, with limitations 

(Conclusion 7-1)

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Appropriate Use of the Data: Use with Caution (2)

• Component 2 data have limited utility in analyzing pay differences 

within small establishments for enforcement or self-assessments 

purposes (Conclusion 7-2). 

– This issue is not due to coverage or data errors, but instead relates to the 

number of observations available for comparison within a given small 

establishment.

• Before analysis, data should first be inspected for errors, and 

cleaned where appropriate (Recommendation 5-1)

– Some data will be fine as is, depending on the focus of the analysis and 

which establishments are included.

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Unsuitable Uses of Component 2 Data As Collected

• Without extensive cleaning, Component 2 hours worked data should 

not be used to calculate hourly wages (Conclusion 7-3)

• Component 2 data are not suitable for direct determinations of bias 

or reasonable cause for enforcement purposes (Conclusion 7-4)

• Component 2 data have limited utility for employer self-assessment 

as they do not include measures of legitimate factors for pay 

differences, and occupation and pay bands are broader than 

typically required (Conclusion 3-6)

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Future Pay Data Collection

-Short-term improvements needed

- Long-term improvements needed

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Improve Coverage of Employers in EEO-1 Master List

– Improvement is needed in both the respondent frame and 

outreach to newly-eligible firms. 

– Firms and establishments are born and die continuously;the frame 

should be updated annually. 

– EEOC should collaborate with other federal agencies that 

continuously update firm lists (Recommendation 4-1)

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For National and Sub-national Estimates, Use Weights 

to Adjust for Under-coverage and Nonresponse

– Survey statisticians commonly use weighting to adjust for the probability 

of selection in a sample and for nonresponse. 

– Since the EEO-1 master list appears significantly incomplete, weighting 

would be appropriate (Recommendation 4-2).

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Reduce Employer Reporting Burden

• Collect Component 1 and 2 data as a single collection (Recommendation 

2-1)

– Having a single pay period for all data simplifies data cleaning and 

improves data consistency.

• Cease Type 6 and Type 2 reports; require Type 8 (Recommendation 2-2)

– Requiring Type 8 reports rather than Type 6 reports would address data 

gaps. 

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Improve Submission Instructions for Professional 

Employer Organizations

• Require each firm’s report to be filed separately. 

• Employer’s industry code should be submitted. 

• Responsible employer should certify submissions by PEOs.

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Improve Measurement

• Use W-2 Box 5 to measure total compensation (Recommendation 3-3)

• If pay data is still collected in pay bands, use narrower bands and expand 

bands for top earners (Recommendation 3-4)

• Use federal standard measures of race/ethnicity (Recommendation 3-5)

• Collaborate with federal agencies in developing, testing and measuring 

sex, gender identity, and sexual orientation as appropriate 

(Recommendation 3-6)

• Switch to Standard Occupational Classification federal standard 

(Recommendation 3-8)

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If EEOC Elects to Keep the Current Survey Format...

• Improvements could be made to the current instrument to 

substantially reduce, and possibly eliminate, many of the errors and 

weaknesses observed (Conclusion 3-7)

• Conduct field testing to identify and resolve issues with form design 

that may contribute to error (Recommendation 5-2)

– The collection of employee counts and hours in a side by side format may 

address some issues.

• Implement a standard reporting period (Recommendation 3-1)

– Improves comparability of data and reduces respondent burden. 

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Future Pay Data Collection

-Short-term improvements needed

- Long-term improvements needed

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Current EEO-1 Survey Format...

– increases employer burden, 

– limits utility for EEOC case processing, and 

– restricts utility for self-assessment (Conclusion 3-8).

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Transition to Collection of Individual-level Pay Data

– Employers already report individual pay data to multiple state and local 

government agencies

– Individual-level pay data will lessen respondent burden while improving 

data quality

– BLS’ transition to individual pay data in the OEWS may be instructive

– Solves multiple measurement problems (Recommendation 3-7)

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Improve Collaborations and Data Access with 

Stakeholders

– Strengthen consultation and data sharing with the 

public, employers, and federal and state 

employment data collection agencies 

(Recommendation 8-2)

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Discussion

-Questions and answers

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Annex 

-- Instruments and measures

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EEO-1 Component 2 Instrument, Online Version, 2016

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EEO-1 Component 2 Instrument, Upload Form, 2016

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Pay

• Component 2 filers were instructed to report W-2 Box 1 earnings for 

the reporting year, for all employees identified in the workforce 

“snapshot”, by assigning them to the appropriate pay band (U.S. 

EEOC, 2020d).

– W-2 Box 1 includes the total taxable wages, tips, and other compensation 

that the employer paid to the employee during the year. However, Box 1 

does not include elective deferrals except section 501(c)(18) contributions

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Pay Bands TABLE 3-1 Pay Bands in EEOC Component 2 Collection, 2017–2018

Band Compensation Band Label

1 $19,239 and under

2 $19,240–$24,439

3 $24,440–$30,679

4 $30,680–$38,999

5 $39,000–$49,919

6 $49,920–$62,919

7 $62,920–$80,079

8 $80,080–$101,919

9 $101,920–$128,959

10 $128,960–$163,799

11 $163,800–$207,999

12 $208,000 and over

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Hours Worked

• For non-exempt employees under the Fair Labor Standards Act (FLSA), 

employers must report actual hours worked. 

• For FLSA-exempt employees, employers have the option to either: 

– (1) report actual hours worked by exempt employees if the employer already 

maintains accurate records of this information; or 

– (2) report a proxy of 40 hours per week for full-time exempt employees and 20 hours 

per week for part-time exempt employees, multiplied by the number of weeks the 

employees were employed during the EEO-1 reporting year. (U.S. EEOC, 2018, p. 5) 

• Filers were also instructed to report aggregated hours worked only for those 

employees who worked during the selected workforce snapshot period. 

• There were no separate measures for part-time or full-time worker status, or 

exempt or non-exempt worker status. 

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Sex

• In the Component 2 data collection “sex” is not defined or mentioned in the 

section of instructions entitled “Race, Ethnic, and Sex Identification” (U.S. 

EEOC, 2018). The instrument provides filers with separate columns to report 

employee counts and hours worked for male and female employees. 

• The Frequently Asked Questions document accompanying the Component 2 

instrument includes a question asking how employers can report data on 

employees who do not fall within the male/female binary (U.S. EEOC, 2018). 

There is no statement that employers should or must give employees the 

option to identify as something other than male or female (e.g., non-binary, 

intersex, or other gender identity). 

• Employers that collect data with a broader set of categories and wish to 

report it are instructed to note counts and hours for non-binary employees in 

the comment box on the certification page of the instrument. 

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Race/Ethnicity

• The Component 2 instrument collects race/ethnicity data as: 

Hispanic or Latino, White, Black or African American, Native 

Hawaiian or Other Pacific Islander, Asian, American Indian or Alaska 

Native, and two or more races. Filers were instructed to report based 

on self-identification, if possible. Employees must be counted by sex 

and race/ethnicity for each of the 10 occupational categories. “Every 

employee must be accounted for in only one of the race/ethnicity 

categories.” (U.S. EEOC, 2020f, p. 5)

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