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Hearing of March 16, 2016 - Public Input into the Proposed Revisions to the EEO-1 Report

Written Testimony of Amanda Wood, Director
Labor and Employment Policy
National Association of Manufacturers

Chairman Yang, Commissioners Barker, Feldblum, Lipnic and Burrows, my name is Amanda Wood and I am the Director of Labor and Employment Policy for the National Association of Manufacturers (NAM). Thank you for holding this public hearing and I appreciate the opportunity to speak to you today regarding the Equal Employment Opportunity Commission's (EEOC or Commission) recent proposed revision of the Employer Information Report (EEO-1) and how the proposed changes will impact manufacturers.

The NAM is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 12 million men and women, contributes more than $2 trillion to the U.S. economy annually, has the largest economic impact of any major sector, and accounts for two-thirds of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. The NAM and its members strive to have the most diverse workplaces by creating cultures of inclusion and opportunity through diversity training and programs as well as having a strong commitment to complying with all labor laws.

My remarks today will be brief, but the NAM looks forward to submitting more detailed comments for the record before the closing date. The NAM has also submitted a request to extend the comment deadline stressing that 60 days is not adequate time for manufacturers to meaningfully comment on the proposed revision given the complexity of the revision and the time it will take to assess cost and other factors. I, therefore, urge the Commission to extend the 60 day deadline by an additional 60 days so that manufacturers' are able to be as thorough as possible in their analysis.

While the NAM and its members are pleased to see the EEOC has departed from certain aspects Office of Contract Compliance Programs' 2014 proposed rule "To Report Summary Data on Employee Compensation," the NAM echoes many of the concerns expressed in response to the 2014 proposal and therefore, still have serious concerns about the Commission's current proposal to change the requirements of the EEO-1 Report. The NAM believes this current proposal (1) will not accurately reflect workplace realities, leading to unfair characterization of employers; (2) serves little purpose by publishing aggregated data, which is duplicative of other data; and, (3) will not achieve the result the Commission is seeking.

While the W-2 gross income includes all earned income, including overtime pay, year-end bonuses and shift differentials, looking only at W-2's fails to capture other information such as benefits, geographic location or other factors, such as education, experience level, seniority, performance or flexible work arrangements. Combined, all of these and other components more accurately explain an employee's wages. Without looking at total compensation and other key factors, the EEO-1 Report will not be comparing similarly situated employees.

In addition, the EEO-1 Report job categories are very broad and could encompass many categories of employees at many different compensation levels for each employer. As mentioned, the proposal does not contemplate different geographical locations or cost-of-living realities for each of these job categories. Quite often these differences explain why there are pay differentials within the same job category. Since the information in the EEO-1 Report would not accurately portray each employer's compensation practices this information could be used to unfairly characterize an employer's compensation structure as discriminatory. Furthermore, the proposal does not contemplate including other common "factors" when analyzing potential discrimination. These factors include, "experience, education, or other differences among workers that might affect their compensation." 79 Fed. Reg. at 46580.

The NAM and its members have serious concerns about the EEOC publishing the reported aggregated information because it serves no purpose and is duplicative of other entities who collect and publish the same data. Suggesting that employers could benefit by providing this data to EEOC if the EEOC aggregates it and publishes the aggregated data is incorrect because the aggregated data is extremely broad and other entities like the Bureau of Labor Statistics and numerous websites already provide detailed data on pay matters, such as market value of specific jobs. Since this information is already public and in some cases it is more specific than what the Commission has proposed to collect, why is it then necessary to change the reporting requirements at all?

Finally, changing the EEO-1 form to include W-2 data will not "strengthen federal efforts to combat discrimination," as the Commission stated in its press release on January 29. The EEOC already has the authority to evaluate and investigate employers under Title VII and the Equal Pay Act, which should properly identify pay discrimination. These new EEO-1 processes, however, take a tremendous amount of time and careful analysis-not just checking a box on a form. For example, when employers conduct their own pay audits (as many do), an employer may take two to four weeks to go through all the data including performance level, market value, geographic location, and if there are outliers what the cause of those may be. The idea that the Commission will be able to ascertain all of this information from a W-2 along with guessed hours worked (especially for those salaried employees) is just not possible. Due to the complexity of pay data, the Commission and the business community should focus instead on improving current mechanisms to address pay gaps rather than changing a form that will only further muddy the waters and unfairly classify employers.

The NAM appreciates the Commission's time today and looks forward to answering any of your questions. Thank you.