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EEO-1 - 12-27-2007

The EEO-1 is the annual demographic report companies (with greater than 100 employees) and federal contractors (with greater than 50 employees and $50,000 or more in government contracts) are required to submit to the agency every September 30th. The survey asks employers to classify their workforce by job category, sex, race and ethnic identity.

Filed by over 40,000 companies employing as a whole more than 50 million workers at about 225,000 locations, the EEOC utilizes the reports to help identify discrimination and to take action towards remedy.

Why talk about the EEO-1 now?

As early as October 1, 2006, as required by the Equal Employment Opportunity Commission (EEOC) and its reporting mandates, many employers will start asking new questions of newly-hired employees while bypassing some questions previously asked.

In doing so, the agency may better discover gaps between a particular employer and other employers of similar size and types of workforces as well as among employers within the same industries. The movements of women and minorities climbing the job ladder and the movements in certain companies and industries are then reviewed. Depending on the trends and patterns (e.g. significantly slow upward movements), the information can become the basis for enforcement efforts to ensure equality in every workplace. EEOC investigators and lawyers often have used such information to build cases against employers appearing to illegally under-employ women or minorities.

The EEOC also has authorization to relay such information to related federal and state agencies, including the U.S. Department of Labor’s Office of Federal Contract Compliance Programs, which then selects to audit federal contractors apparently engaged in discriminatory employment practices.

What are the changes?

In general, the agency rearranged its ethnic and racial groupings as well as created a new category enabling the agency to compare gender and racial information across different levels of management. (Note: The changes apply to reports employers will file in September 2007.)

If applicable to your business as defined earlier, the data you submit next September will represent an important snapshot of your workforce developing over the next year. So, you need to prepare soon and start gathering information in the new ways.

The following reflect changes to be made in the EEO-1:

Addition of a new category: "Two or more races, not Hispanic or Latino"
Deletion of category: "Asian and Pacific Islanders"
Addition of a new category: "Asians, not Hispanic or Latino"
Addition of a new category: "Native Hawaiian or Other Pacific Islander, not Hispanic or Latino"
Renaming “black” as “black or African American”
Renaming “Hispanic” as “Hispanic or Latino”
Extension of EEO-1 data collection by race and ethnicity to the State of Hawaii

Strong endorsement of employee self-identification of race and ethnic categories, as opposed to visual identification by employers. (Note: If you use a form for employees to self-identify, it needs to be revised to match the new categories. In addition, while current workers will not have to be "re-identified," employers can voluntarily choose to do so.)

Separation of “Officials and Managers” category into two levels: "Executive / Senior Level Officials and Managers" and "First / Mid-Level Official and Managers" (Note: According to the EEOC, these changes can help identify groups "stuck" in middle-management and apparently unable to progress to the highest levels of their organizations.)
Designation of non-managerial business and financial occupations from the "Officials and Managers" category to the "Professionals" category

What’s the impact?

Complying with the new rules obviously will require employers to change the types of data collected from their workers. While some may view this process as an extra hassle, some see a positive opportunity for employers to gain better information to help manage their workforces. The new data from the reports may also help employers minimize frivolous discrimination claims as long as the employer has applied affirmative hiring practices. Keep in mind, the same more-detailed information also may reinforce the legitimacy a plaintiff’s claim.

The new approach will more accurately show how well diversity is being implemented in various business areas and how far ahead or behind certain demographic groups as well as businesses are. The revisions clearly will help the agency better monitor workforce demographics and career advancements into management among women and minorities. In turn, the changes especially will help the agency address discrimination claims against employers.

Employers, particularly federal contractors not fully engaged and active in their equal employment opportunity reporting, easily could put their businesses at risk.

What else to consider?

Make sure your Affirmative Action Plan (AAP) is in line with the new EEOC reporting requirements. The EEOC’s changes may require employers to make changes to sections of their AAPs—likely to include the organizational profile, the job group analysis, placement goals, and the equal employment opportunity clause for construction workers.
If you’re using an outsourced HR technology vendor, make sure you understand how they plan to have their HRMS / HRIS product comply with the new rules.

Plan to review the job descriptions of at least some percentage of your workforce to determine their level of management.

Again, for the EEO-1 forms due this September 2006, simply provide the data as before. For the reports due in September 2007, use employment figures from any one pay period from July through September 2007.

In all, the EEO-1 will grow more meaningful as a diversity assessment tool and will grow more powerful as a key enforcement tool. So, mind as well get prepared now and be proactive as soon as you can especially as your business grows!

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