June 28, 2007

What Employers Need to Know Now to File the New EEO-1 Report

Holland & Knight Alert
David J. Santeusanio

For the first time in a number of years, the Equal Employment Opportunity Commission has changed the EEO-1 report form. The new EEO-1 report must be used in connection with the 2007 EEO-1 filing. The deadline for filing is September 30, 2007.

The new EEO-1 report contains two major changes. First, employers required to file an EEO-1 report should review their workforces to reclassify the current “officials and managers” category into one of two new manager categories: “executive/senior level officials and managers” and “first/mid-level officials and managers.” Second, the new EEO-1 report includes new race and ethnicity categories; however, employers may rely on the old race categories for purposes of the 2007 filing. Federal contractors are still waiting for further guidance from the Office of Federal Contract Compliance Programs as to whether, and when, it will revise the federal contractor affirmative action regulations to reflect the new changes.

This alert addresses frequently asked questions about the new EEO-1 report and common pitfalls in connection with filing the EEO-1 report.

Who must file?

The EEO-1 must be filed by (1) private employers with 100 or more employees (excluding institutions of higher education); (2) private employers with less than 100 employees, if they are affiliated with, owned, or controlled by another company, and the employees of the related companies total 100 or more; and (3) federal contractors with 50 or more employees.

What is the deadline for filing the 2007 report?

September 30, 2007.

What date do I use for purposes of identifying the necessary information, such as total number of employees?

Use any pay period between July 2007 and September 2007. Given the new changes to the 2007 EEO-1 form, employers are generally advised to begin the process early for this year.

What workers are covered by the EEO-1 report?

Full-time and part-time employees, including leased employees.

The employer should not report temporary employees or casual employees. Partners are not considered employees for EEO-1 reporting purposes, so long as those partners are not considered employees for purposes of the employer’s social security taxes.

How does an employer file?

Employers must use the EEO-1 Online Filing System or submit the EEO-1 as an electronically transmitted data file.

What are the 2007 changes?

The two primary changes are the new definitions of “officials and managers” and the new race and ethnicity classifications.

What are the changes to the “officials and managers” category?

The former category of “officials and managers” has been divided into two categories: “executive/senior level officials and managers” and “first /mid-level officials and managers.” “Executive/senior level officials and managers” are generally those employees who manage, direct and formulate policy, set strategy, and provide overall direction (in large organizations, these employees are generally within two reporting levels of the CEO). “First/mid-level officials and managers” generally direct implementation or operations within parameters set by executive/senior level officials and managers, and they generally oversee day-to-day operations. The specific definitions are set forth in the EEO-1 form. This change was made to avoid including line supervisors and first-level managers with senior executives.

The other EEO-1 job categories remain essentially the same, with the exception of some minor changes to the names of certain classifications.

Must employers incorporate these changes for the 2007 filing?

Yes. All employers must incorporate the changes to the “officials and managers” category for purposes of the September 2007 filing.

What are the changes to the race and ethnicity category?

The new EEO-1 report adds a new category titled “two or more races.” Additionally, the new EEO report revises certain race and ethnic categories: “Hispanic” is now “Hispanic or Latino”; “Black” is now “Black or African American”; and “Asian or Pacific Islander” is divided into two categories, “Native Hawaiian or Other Pacific Islander” and “Asian.”

Must employers incorporate the new race and ethnicity categories into the 2007 filing?

Employers are not required to incorporate new race and ethnicity information into the 2007 filing. The Equal Employment Opportunity Commission, however, encourages employers to incorporate the race and ethnicity changes as soon as possible.

How does the new EEO-1 form address “Hispanic or Latino” employees?

As part of the federal government’s efforts to obtain a more accurate count of Hispanics and Latinos, the EEOC has adopted a new two-part inquiry of employees.

The new EEO-1 form classifies Hispanics and Latinos as an “ethnic category” for which no race data needs to be reported. Employers must report race data (e.g., White, Asian) only for employees who do not self-identify as Hispanic or Latino.

Employers may ask the following questions of all employees: “(1) Are you Hispanic or Latino?; (2) If no, what race do you consider yourself?” If an employee self-identifies as “Hispanic or Latino,” he or she should be reported as “Hispanic or Latino” even though the employee may claim to also be in a different race. If any non-Hispanic or non-Latino employee identifies several different races, the employer should include the employee in the “two or more races” category on the form. The “two or more races” category is available only for employees who do not identify as “Hispanic or Latino.”

How does an employer ask employees to self-identify?

The EEOC suggests that employers use the following statement in its self-identification requests:

[Company name] is subject to certain governmental record keeping and reporting requirements for the administration of civil rights laws and regulations. In order to comply with these laws, we invite you to self identify your race and ethnicity. Submission of this information is voluntary. Refusal to provide it will not subject you to any adverse treatment. The information will be kept confidential and will be used only 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.

The employer must accept the employee’s self-identification as correct and may not dispute it for purposes of filing the EEO-1 report.

The EEOC has announced that it will issue a proposed regulation in August 2007 stating that self-identification is the preferred method.

What should an employer do if an employee refuses to self-identify?

If an employee refuses to self-identify, the employer should use visual identification or any previous employment records that the employee may have previously submitted identifying race or ethnicity.

What special issues exist for federal contractors?

The new race and ethnicity classifications set forth in the EEO-1 reports raise special issues for federal contractors with affirmative action obligations. The Office of Federal Contract Compliance Programs (OFCCP) enforces federal contractor affirmative action obligations. The OFCCP has not yet changed its race and ethnicity classifications to make OFCCP regulations consistent with the new EEO-1 report. The OFCCP has stated that it expects to issue a notice of proposed rulemaking sometime in June 2007 as the preliminary step to any regulatory change.

When will the OFCCP regulations be effective?

The OFCCP has not announced when its new regulations will go in effect or how affirmative action employers should compare past race and ethnic information with new race and ethnic categories for purposes of evaluating progress against past goals. The OFCCP has indicated that it would provide contractors with a “reasonable transition period” before any regulatory changes become effective. Therefore, federal contractors should not yet change the race and ethnicity definitions in the pre-offer and post-offer self-identification forms or in their affirmative action reports.

How will the new OFCCP regulations likely affect federal contractors?

If the OFCCP revises its regulations to be consistent with the new race and ethnicity categories, then federal contractors will likely need to do the following:

  • revise their applicant self-identification forms, which are used at the pre-offer stage (the EEO-1 form does not require employers to provide race and ethnicity data regarding applicants)
  • revise their applicant tracking information, including systems established for the Internet applicant guidelines
  • revise their internal employee tracking information
  • revise their job group analysis, organizational profile and other affirmative action reports

How will the federal government use the EEO-1 report?

The EEOC must keep the EEO-1 report confidential. The EEO-1 report may be used in a variety of ways:

  • civil rights enforcement
  • to target companies for investigation (e.g., OFCCP uses EEO-1 reports to select contractors for audit and to identify employers whose statistics indicate that they should be reviewed to address possible systemic discrimination)
  • may be requested by plaintiff’s counsel in discovery
  • may be used in litigation by plaintiffs or defendants

What are some of the common pitfalls in filing EEO-1 reports?

One common mistake is to incorrectly identify the company as a “federal contractor” in Section 3, Box 3, which asks whether the employer is a federal contractor. If a company checks “yes” in response to this question, the OFCCP will expect that company to comply in all respects with the federal contractor affirmative action obligations under Executive Order 11246 and its implementing regulations. Further, the company will be included in the database from which employers are selected for compliance reviews by the OFCCP. Once a company is listed in the database of companies that have self-identified as federal contractors, it is often difficult to have the government remove the company from the database.

Another common mistake is not filing multiple EEO-1 reports for multi-establishment employers. Employers doing business at more than one establishment must complete (1) a report covering the headquarters office, (2) a separate report for each establishment employing 50 or more persons, and (3) a separate report for each establishment employing fewer than 50 employees or a list identifying each establishment employing less than 50 employees.

Who do I contact for assistance?

The EEOC’s Web site provides some additional background information, including the new Instruction Booklet and a sample EEO-1 form. Holland & Knight can also provide assistance on issues related to filing the EEO-1 or addressing the impact of the new race and ethnicity categories on federal contractors with affirmative action obligations.

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