July 30, 2018
A. Reporting Requirements for EEO-1 and VETS-100 Reports
1. EEO-1 Reports
a. Background
The EEO-1 Report is a federal government form that requires many employers to provide a count of their employees by job category and by race/ethnicity and gender. The EEO-1 report is submitted to both the EEOC and the OFCCP. The EEO-1 report must be filed by: (1) employers with federal contracts of $50,000 or more, and 50 or more employees; and (2) employers who do not have a federal government contract, but that have 100 or more employees.
The EEO-1 report must be filed annually with the EEOC by September 30. It must use employment numbers from any pay period in July through September of that year. General information about the EEO-1 can be found at the EEOC’s website at: http://www.eeoc.gov/employers/eeo1survey/.
b. Changes to the EEO-1 Report
Since 2007, employers, including Federal contractors, have had to collect and report data about the racial/ethnic, and gender composition of their workforces on a revised Standard Form 100, Employer Information Report EEO-1. The prior EEO-1 report required workforce data to be broken down by nine (9) job categories, using five (5) race and ethnic categories.
The revised EEO-1 report contains changes to the race and ethnic categories. A new category, titled "two or more races", was added. The category "Asian or Pacific Islander" was been divided into two separate categories - "Asian" and "Native Hawaiian or other Pacific Islanders." In addition, the approved revisions to the EEO-1 report include an increase in the number of job categories to ten (10), as a result of dividing the Officials and Managers category into two subgroups - Executives/ Senior Level and First/Mid-Level Officials.
The revised EEO-1 report must be filed by September 30 of each year. This is typically done electronically.
c. How to Identify Employees by Race and Ethnicity
Beginning with the 2007 EEO-1 report, employers were required to attempt to allow employees to use self-identification to complete the EEO-1 report. If an employee declines to self-identify, the employer may use employment records or observer identification. In the past, employers were required to complete the report by doing a visual survey, not by employee self-identification.
The self-identification records completed by employees should be kept separately from employees’ basic personnel files, or other records available to those responsible for
personnel decisions.
d. How to File the EEO-1 Report
All single-establishment employers, i.e., employers doing business at only one establishment in one location, must complete a single Standard Form 100, or use one of the alternate filing methods.
All multi-establishment employers, i.e. employers doing business at more than one establishment, must file:
1. a report covering the principal or headquarters office;
2. a separate report for each establishment employing 50 or more persons;
3. a consolidated report that MUST include ALL employees by race, sex and job category in establishments with 50 or more employees as well as establishments with fewer than 50 employees; and
4. a list, showing the name, address, total employment and major activity for each establishment employing fewer than 50 persons, must accompany the consolidated report.
The total number of employees indicated on the headquarters report, PLUS the establishment reports, PLUS the list of establishments with fewer than 50 employees, MUST equal the total number of employees shown on the consolidated report. All forms for a multi-establishment company must be collected by the headquarters office for its establishments or by the parent corporation for its subsidiary holdings and submitted in one package.
For the purposes of this report, the term Parent Corporation refers to any corporation which owns all or the majority stock of another corporation so that the latter stands in the relation to it of a subsidiary.
e. Race and Ethnic Identification
Self-identification is the preferred method of identifying the race and ethnic information necessary for the EEO-1 report. Employers are required to attempt to allow employees to use self-identification to complete the EEO-1 report. If an employee declines to self-identify, employment records or observer identification may be used. Where records are maintained, it is recommended that they be kept separately from the employee’s basic personnel file or other records available to those responsible for personnel decisions.
Race and ethnic designations as used by the Equal Employment Opportunity Commission do not denote scientific definitions of anthropological origins. Definitions of the race and ethnicity categories are as follows:
_ Hispanic or Latino - A person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin regardless of race.
_ White (Not Hispanic or Latino) - A person having origins in any of the original peoples of Europe, the Middle East, or North Africa.
_ Black or African American (Not Hispanic or Latino) - A person having origins in any of the black racial groups of Africa.
_ Native Hawaiian or Other Pacific Islander (Not Hispanic or Latino) – A person having origins in any of the peoples of Hawaii, Guam, Samoa, or other Pacific Islands.
_ Asian (Not Hispanic or Latino) - A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian Subcontinent, including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, and Vietnam.
_ American Indian or Alaska Native (Not Hispanic or Latino) - A person having origins in any of the original peoples of North and South America (including Central America), and who maintain tribal affiliation or community attachment.
_ Two or More Races (Not Hispanic or Latino) - All persons who identify with more than one of the above five races.
Instructions for assigning employees into the race/ethnic categories:
_ Hispanic or Latino - Include all employees who answer YES to the question, Are you Hispanic or Latino. Report all Hispanic males in Column A and Hispanic females in Column B.
_ White (Not Hispanic or Latino) - Include all employees who identify as White males in Column C and as White females in Column I.
_ Black or African American (Not Hispanic or Latino)- Include all employees who identify as Black males in Column D and as Black females in Column J.
_ Native Hawaiian or Other Pacific Islander (Not Hispanic or Latino) - Include all employees who identify as Native Hawaiian or Other Pacific Islander males in Column E and as Native Hawaiian or Other Pacific Islander females in Column K.
_ Asian (Not Hispanic or Latino) - Include all employees who identify as Asian males in Column F and as Asian females in Column L.
_ American Indian or Alaska Native (Not Hispanic or Latino) - Include all employees who identify as American Indian or Alaska Native males in Column G and as American Indian or Alaska Native females in Column M.
_ Two or More Races (Not Hispanic or Latino) - Report all male employees who identify with more than one of the above five races in Column H and all female employees who identify with more than one of the above five races in Column N. As to the method of collecting data, the basic principles for ethnic and racial self-identification for purposes of the EEO-1 report are:
(1) Offer employees the opportunity to self- identify
(2) Provide a statement about the voluntary nature of this inquiry for employees. For example, language such as the following may be used (employers may adapt this language):
"The employer is subject to certain governmental recordkeeping and reporting requirements for the administration of civil rights laws and regulations. In order to comply with these laws, the employer invites employees to voluntarily self-identify their race or ethnicity. Submission of this information is voluntary and refusal to provide it will not subject you to any adverse treatment.
The information obtained will be kept confidential and may only be used in accordance with the provisions of applicable laws, executive orders, and regulations, including those that require the information to be summarized and reported to the federal government for civil rights enforcement. When reported, data will not identify any specific individual."
f. Description of Job Categories
The major job categories are listed below, including a brief description of the skills and training required for occupations in that category and examples of the job titles that fit each category. The examples shown below are illustrative and not intended to be exhaustive of all job titles in a job category. These job categories are primarily based on the average skill level, knowledge, and responsibility involved in each occupation within the job category.
• The Officials and Managers category as a whole is to be divided into the following two subcategories: Executive/Senior Level Officials and Managers and First/Mid Level Officials and Managers. These subcategories are intended to mirror the employers own well established hierarchy of management positions. Small employers who may not have two well-defined hierarchical steps of management should report their management employees in the appropriate categories.
• Executive/Senior Level Officials and Managers. Individuals who plan, direct and formulate policies, set strategy and provide the overall direction of enterprises/organizations for the development and delivery of products or services, within the parameters approved by boards of directors or other governing bodies. Residing in the highest levels of organizations, these executives plan, direct or coordinate activities with the support of subordinate executives and staff managers. They include, in larger organizations, those individuals within two reporting levels of the CEO, whose responsibilities require frequent interaction with the CEO. Examples of these kinds of managers are: chief executive officers, chief operating officers, chief financial officers, line of business heads, presidents or executive vice presidents of functional areas or operating groups, chief information officers, chief human resources officers, chief marketing officers, chief legal officers, management directors and managing partners.
• First/Mid-Level Officials and Managers. Individuals who serve as managers, other than those who serve as Executive/Senior Level Officials and Managers, including those who oversee and direct the delivery of products, services or functions at group, regional or divisional levels of organizations. These managers receive directions from the Executive/Senior Level management and typically lead major business units. They implement policies, programs and directives of executive/senior management through subordinate managers and within the parameters set by Executive/Senior Level management.
Examples of these kinds of managers are: vice presidents and directors, group, regional or divisional controllers; treasurers; human resources, information systems, marketing, and operations managers. The First/Mid Level Officials and Managers subcategory also includes those who report directly to middle managers. These individuals serve at functional, line of business segment or branch levels and are responsible for directing and executing the day-to-day operational objectives of enterprises/organizations, conveying the directions of higher level officials and managers to subordinate personnel and, in some instances, directly supervising the activities of exempt and non-exempt personnel. Examples of these kinds of managers are: first-line managers; team managers; unit managers; operations and production mangers; branch managers; administrative services managers; purchasing and transportation managers; storage and distribution managers; call center or customer service managers; technical support managers; and brand or product mangers.
• Professionals. Most jobs in this category require bachelor and graduate degrees, and/or professional certification. In some instances, comparable experience may establish a person’s qualifications. Examples of these kinds of positions include: accountants and auditors; airplane pilots and flight engineers; architects; artists; chemists; computer programmers; designers; dieticians; editors; engineers; lawyers; librarians; mathematical scientists; natural scientists; registered nurses; physical scientists; physicians and surgeons; social scientists; teachers; and surveyors.
• Technicians. Jobs in this category include activities that require applied scientific skills, usually obtained by post secondary education of varying lengths, depending on the particular occupation, recognizing that in some instances additional training, certification, or comparable experience is required. Examples of these types of positions include: drafters; emergency medical technicians; chemical technicians; and broadcast and sound engineering technicians.
• Sales Workers. These jobs include non-managerial activities that wholly and primarily involve direct sales. Examples of these types of positions include: advertising sales agents; insurance sales agents; real estate brokers and sales agents; wholesale sales representatives; securities, commodities, and financial services sales agents; telemarketers; demonstrators; retail salespersons; counter and rental clerks; and cashiers.
• Administrative Support Workers. These jobs involve non-managerial tasks providing administrative and support assistance, primarily in office settings. Examples of these types of positions include: office and administrative support workers; bookkeeping; accounting and auditing clerks; cargo and freight agents; dispatchers; couriers; data entry keyers; computer operators; shipping, receiving and traffic clerks; word processors and typists; proofreaders; desktop publishers; and general office clerks.
• Craft Workers (formerly Craft Workers (Skilled)). Most jobs in this category includes higher skilled occupations in construction (building trades craft workers and their formal apprentices) and natural resource extraction workers. Examples of these types of positions include: boilermakers; brick and stone masons; carpenters; electricians; painters (both construction and maintenance); glaziers; pipelayers, plumbers, pipefitters and steamfitters; plasterers; roofers; elevator installers; earth drillers; derrick operators; oil and gas rotary drill operators; and blasters and explosive workers. This category also includes occupations related to the installation, maintenance and part replacement of equipment, machines and tools, such as: automotive mechanics; aircraft mechanics; and electric and electronic equipment repairers. This category also includes some production occupations that are distinguished by the high degree of skill and precision required to perform them, based on clearly defined task specifications, such as: millwrights; etchers and engravers; tool and die makers; and pattern makers.
• Operatives (formerly Operatives (Semi-skilled)). Most jobs in this category include intermediate skilled occupations and include workers who operate machines or factory-related processing equipment. Most of these occupations do not usually require more than several months of training. Examples include: textile machine workers; laundry and dry cleaning workers; photographic process workers; weaving machine operators; electrical and electronic equipment assemblers; semiconductor processors; testers, graders and sorters; bakers; and butchers and other meat, poultry and fish processing workers. This category also includes occupations of generally intermediate skill levels that are concerned with operating and controlling equipment to facilitate the movement of people or materials, such as: bridge and lock tenders; truck, bus or taxi drivers; industrial truck and tractor (forklift) operators; parking lot attendants; sailors; conveyor operators; and hand packers and packagers.
• Laborers and Helpers (formerly Laborers (Unskilled)). Jobs in this category include workers with more limited skills who require only brief training to perform tasks that require little or no independent judgment. Examples include: production and construction worker helpers; vehicle and equipment cleaners; laborers; freight, stock and material movers; service station attendants; construction laborers; refuse and recyclable materials collectors; septic tank servicers; and sewer pipe cleaners.
• Service Workers. Jobs in this category include food service, cleaning service, personal service, and protective service activities. Skill may be acquired through formal training, job-related training or direct experience. Examples of food service positions include: cooks; bartenders; and other food service workers. Examples of personal service positions include: medical assistants and other healthcare support positions; hairdressers; ushers; and transportation attendants. Examples of cleaning service positions include: cleaners; janitors; and porters. Examples of protective service positions include: transit and railroad police and fire fighters; guards; private detectives and investigators.
B. The OFCCP and Affirmative Action
The Office of Federal Contract Compliance Programs (“OFCCP”) regulates government contractors’ and subcontractors’ affirmative action programs. Here are some relevant Q & A’s regarding federal contractors’ and subcontractors’ affirmative action obligations.
1. Under Executive Order 11246, when are Federal contractors and subcontractors required to develop a written affirmative action program (AAP)? Each non-construction contractor/subcontractor with 50 or more employees is required to develop a written Affirmative Action Program (AAP) for each of its establishments within 120 days from the start of the Federal contract, if it:
* Has a Federal contract or subcontract of $50,000 or more;
* Has government bills of lading which in any 12-month period total, or can reasonably be expected to total, $50,000 or more;
* Serves as a depository of Federal funds in any amount; or
* Is a financial institution that is an issuing and paying agent for U.S. savings bonds and savings notes in any amount.
2. We don't do any government work here. Federal Government work is performed in some other division in another state. Are we subject to the equal employment laws enforced by OFCCP?
Yes. Generally speaking, once it has been determined that a business or organization is subject to the civil rights requirements enforced by OFCCP, all of the business's or organization's establishments or facilities will be subject to the same regulatory requirements, regardless of where the Federal contract is to be performed.
In addition, some businesses or organizations that do not independently hold Government contracts/subcontracts may still be covered under the laws enforced by OFCCP if they are considered a "single entity" with a related business or organization that holds such contracts. In such instances, OFCCP uses a "single entity" test to determine whether the businesses or organizations are so closely related that they may constitute a single entity for purposes of OFCCP jurisdiction. The test requires OFCCP to consider whether:
1. the entities have common ownership;
2. the entities have common directors and/or officers;
3. one entity has de facto day-to-day control over the other through policies, management or supervision of the entity's operations;
4. the personnel policies of the entities emanate from a common or centralized source; and
5. the operations of the entities are dependent on each other, e.g., services are provided principally for the benefit of one entity by another and/or both entities share management, offices, or other services. The test focuses primarily on whether the ownership, management, and operations of the separate entities are, in fact, sufficiently interrelated to warrant treating them as an integrated enterprise or a single entity. A business or organization need not meet all five factors to be considered a single entity with a covered Federal contractor. However, there is growing recognition that centralized control over labor relations and personnel functions is the most important factor. By way of example, say that two entities are under common ownership, with a common board of directors, and have a central corporate office that determines and issues personnel policy for both entities, and generally manages most personnel-related issues for both entities. At the same time, the operations of the two entities are not particularly dependent on each other. Despite the fact that one of the factors did not apply, the four factors that did outweigh the one that did not, so that the two entities being analyzed will most likely be considered a single entity.
c. Is a financial institution that is covered by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Association (NCUA) with deposit insurance subject to the Affirmative Actions Program (AAP) requirements under Executive Order 11246, as amended, the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (VEVRAA), as amended, 38 U.S.C. 4212 and Section 503 of the Rehabilitation Act of 1973 (Section 503), as amended?
Yes. Financial institutions with federal share and deposit insurance are considered to be government contractors within the meaning of the regulations implementing Executive Order 11246, as amended, the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (VEVRAA), as amended, 38 U.S.C. 4212 and Section 503 of the Rehabilitation Act of 1973 (Section 503), as amended. These three programs enforced by the Office of Federal Contract Compliance Programs (OFCCP) require equal employment opportunity by government contractors.
The implementing regulations for Executive Order 11246 at 41 CFR 60- 1.3 have consistently defined a government contract as any agreement or agreement modification between any contracting agency and any person for the purchase, sale or use of personal property or nonpersonal services. The term "nonpersonal services" includes, but is not limited to, the following services: utilities, construction, transportation, research, insurance, and fund depository. This definition thus explicitly includes agreements for insurance.
The implementing regulations for VEVRAA and Section 503, found at 41 CFR 60-250.2, 60-300.2 and 60-741.2, respectively, also define a government contract as any agreement or agreement modification between any contracting agency and any person for the purchase, sale or use of personal property or nonpersonal services. Like the Executive Order regulations, these regulations also state that the term "nonpersonal services" includes, but is not limited to the following services: utilities, construction, transportation, research, insurance, and fund depository. Therefore, financial institutions with federal share and deposit insurance are considered to be government contractors.
d. Are all construction contractors and subcontractors subject to the laws enforced by OFCCP? All contractors and subcontractors who hold a Federal or federally assisted construction contract in excess of $10,000 will be subject to regulatory requirements under one or more of the laws enforced by OFCCP depending upon the amount of the contract. Once it has been determined that a contractor or subcontractor is subject to OFCCP jurisdiction, the regulations implementing the civil rights requirements enforced by OFCCP apply to all of the contractor's or subcontractor's employees who are engaged in on site construction, including those construction employees who work on a non-Federal or non-federally assisted construction site.
e. What is the correct procedure for a contractor to obtain the ethnic information of its employees and applicants? OFCCP regulations 41 CFR 60-1.12(c) indicate that for any personnel or employment record a contractor maintains, it must be able to identify the gender, race, and ethnicity of each employee and, where possible, the gender, race and ethnicity of each applicant. OFCCP has not mandated a particular method of collecting the information. Self-identification is the most reliable method and preferred method for compiling information about a person's gender, race and ethnicity. Contractors are strongly encouraged to rely on employee selfidentification to obtain this information. Visual observation is an acceptable method for identifying demographic data, although it may not be reliable in every instance. If self-identification is not feasible, postemployment records or visual observation may be used to obtain this information. Contractors should not guess or assume the gender, race or ethnicity of an applicant or employee.
A contractor's invitation to an employee or applicant to selfidentify his or her gender, race, and ethnicity should indicate to individuals that supplying such information is voluntary. OFCCP would not hold a contractor responsible for applicant data when the applicant declines to self-identify and there are no other acceptable methods of obtaining this information.
C. Affirmative Action Update and Recent Events
1. OFCCP Changes Rules on Veterans and the Disabled On August 27, 2013, the OFCCP announced two new rules that apply to federal contractors and subcontractors. The new rules are designed to increase the hiring and employment of military veterans and individuals with disabilities. One rule updates the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA); the rule other updates Section 503 of the Rehabilitation Act of 1973. The VEVRAA rule provides contractors with a quantifiable metric to measure success in recruiting and employing veterans by requiring that contractors annually adopt a workforce benchmark of either eight (8) percent or their own benchmark based on the best available data. The new rule increases contractors’ record-keeping requirements.
The new rule also clarifies job listing and subcontractor requirements. The Section 503 rule introduces a hiring goal for federal contractors and subcontractors that seven (7) percent of each job group in their workforce be qualified individuals with disabilities. The rule also details specific actions that contractors must take in the areas of recruitment, training, record keeping and policy dissemination. These requirements are similar to those that have long been required with regard to women and minorities. The new rules take effect 180 days after their publication in the Federal Register.
2. 2010 Census Data Must Be Used Starting in 2014 On May 15, 2013, the OFCCP issued a ANotice for Federal Contractors on Use of the 2006-2010 Census EEO Tabulation in the Development of Affirmative Action Programs (AAP=s).@ On November 29, 2012, the United States Census Bureau released the 2010 EEO Tabulation to the public. This EEO Tabulation replaced the Census 2000 Special EEO File that OFCCP and covered Federal contractors began using in January 2005.
One key requirement of an AAP is to determine the availability of qualified minorities and women for the contractor=s job openings. To determine availability estimates, OFCCP requires contractors to Ause the most current and discrete statistical information available,@ which includes Acensus data, data from local job service offices, and data from colleges or other training institutions.@ 41 CFR 60-2.14(d). To assist contractors in this task, and because OFCCP uses Census Bureau data to assess contractors= compliance with its regulations, OFCCP co-sponsored the development of the 2010 EEO Tabulation, as part of a consortium of Federal agencies. The OFCCP will permit contractors to continue to use the Census 2000 Special EEO File in the development of all AAP=s commencing in 2013.
However, contractors must begin using the 2010 EEO Tabulation to develop all AAP=s that commence on or after January 1, 2014. The OFCCP will, likewise, begin using the 2010 EEO Tabulation to evaluate the reasonableness of all AAPs commencing on or after January 1, 2014. Contractors may, however, begin to use the 2010 EEO Tabulation in the development of their AAPs immediately, if they wish to do so.
3. Use of Criminal History Records
On January 29, 2013, the OFCCP issued Directive 306, AComplying with Nondiscrimination Provisions: Criminal Record Restrictions and Discrimination Based on Race and National Origin.@ The stated purpose of the Directive is to provide information to Federal contractors and subcontractors about: (1) the circumstances in which exclusions of applicants or employees based on their criminal records may violate existing nondiscrimination obligations; and (2) the Enforcement Guidance on the use of criminal history records issued by the Equal Employment Opportunity Commission (“EEOC”) on April 25, 2012. Directive 306 is effective immediately.
According to the OFCCP, policies that exclude individuals from employment based on the mere existence of a criminal history record, and which do not take into account the age and nature of an offense, are likely to unjustifiably restrict the employment opportunities of individuals with conviction histories. Therefore, the OFCCP advises that Acontractors should carefully consider their legal obligations before adopting such policies. What could be the costs of providing Amake whole relief?@ Depending upon the number of Aexcess@ hires in the Afavored@ group and Avictims@ in the Adisfavored@ group(s), it could be very expensive. For example, if your statistical data shows that you should have hired 20 more Blacks (in one or more job groups), and if there were 200 Black applicant Avictims,@ and if the average employment longevity of individuals in the jobs in question is two years, and if the average entry level wage plus raises in two years is $30,000, the OFCCP may contend that your company should pay the victims back pay in the amount of 20 x $30,000 x 2 = $1,200,000. This $1.2 million sum would be divided among the 200 Avictims,@ with each potentially receiving a check for $6,000. Although it is likely that the OFCCP would be willing to negotiate a settlement with your company for substantially less, the resulting amount would still be well into six figures. Thus, even though it may appear that your company has met its utilization goals for minorities as a whole, and that a substantial percentage of your company=s new hires were minorities, your company may be at substantial legal risk.