National Research Council Releases Report on Compensation

The National Research Council (NRC) has released a prepublication version of a document entitled "Collecting Compensation Data from Employers" that discusses OFCCP and EEOC's recent efforts to collect and analyze compensation data from employers.  The report can be found on the National Research Council's website.  The 118 page document discusses the various policies and practices related to the collection of compensation data by various regulatory agencies and the interest these agencies have in collecting additional compensation data.

The NRC basically concludes that efforts to collect compensation data should be limited in scope and that the data collected should be carefully protected.  Among their specific conclusions are the following:

1. EEOC, along with OFCCP and the U.S. Department of Justice, should prepare a comprehensive plan in regard to how earnings data will be used before beginning any kind of data collection effort.
2. EEOC, OFCCP, and the DoJ should initiate a pilot study in order to evaluate the value of whatever tool is used to collect compensation data.  The pilot study should be conducted by an independent contractor, and that contractor should be asked to measure items such as data quality, cost, and burden on employers who are required to respond.
3. EEOC should "enhance its capacity" to both analyze earnings data and protect this information.
4. EEOC should collect data on rates of pay rather than actual earnings or pay bands.
5. EEOC should consider how it will develop appropriate data protection techniques and should support research into the development of applications that will assist in data protection.
6. EEOC should seek legislation that would help the agency ensure that it can protect confidential data. Such legislation should deal in part with data-sharing agreements with other agencies and should provide for penalties if compensation data is released.

While the conclusions in the NRC report primarily focus on EEOC, they are by extension also applicable to OFCCP's efforts to collect pay data.  The NRC report is likely to act as a significant deterent to OFCCP's plans regarding the implementation of a new compensation collection tool, and may act as a deterent to the agency's plans to release new guidance regarding how compensation should be analyzed.

Please note that the NRC report may be subject to change.  All information in the report is the copyright of the National Academies Press.