In February 2016, the U.S. Equal Employment Opportunity Commission (EEOC) modified the Form EEO-1 reporting requirements. The EEOC later revised the form itself on September 29, 2016. The new rules would require private employers with 100+ employees to include wage and hours data on the new Form EEO-1 beginning March 31, 2018.
However, on August 29, 2017, the Office of Management and Budget (OMB) informed the EEOC that it was suspending the new pay data collection requirements pending further review.
Existing Form EEO-1 Obligations
Private employers with 100+ employees must annually report employee data on race, ethnicity, and gender by occupational category.
In addition, many federal contractors with less than 100 but more than 50 employees also must file these EEO-1 reports.
Covered employers must file by March 31 for the preceding calendar year.
Objections to the New Form EEO-1
The U.S. Chamber of Commerce has led the opposition to the pay data components of the new Form EEO-1. It sent an extensive comment letter to the Director of the OMB on February 27, 2017. Notably, the letter specifically requested suspension and review of the 2016 changes.
The Chamber’s letter emphasized various potential deficiencies in the 2016 rulemaking.
Highlights of the letter include:
“EEOC failed to identify any significant or tangible benefit the revised EEO-1 report would generate, thereby failing the requirement that it maximize the benefit to be derived from the report.”
“EEOC ignored the significant privacy and confidentiality concerns raised in the review process . . . . The EEOC is proposing to collect highly sensitive personal data regarding compensation at thousands of U.S. companies in a format which will not serve any of its statutory purposes but which will certainly be of great use to any hacker who is interested in the compensation practices of employers.”
“Given the enormous costs associated with compliance . . . it is imperative that OMB review the information collection and either issue a stay in the effectiveness of its prior approval or rescind its prior approval altogether . . . .”
The Chamber of Commerce’s February 27, 2017 letter is available in its entirety here.
Current Regulatory Policy
The additional EEO-1 reporting obligations created in 2016 are inconsistent with the current administration’s views on federal regulations.
President Trump’s January 30, 2017 Executive Order on Reducing Regulation and Controlling Regulatory Costs stated that “it is essential to manage the costs associated with the governmental imposition of private expenditures required to comply with Federal regulations.”
What Should Employers Do?
The EEOC’s statement on the suspension of the new Form EEO-1 pay data requirements notes that:
“Employers should plan to comply with the earlier approved EEO-1 (Component 1) by the previously set filing date of March 2018.”
This will include demographic information (race, ethnicity, and gender) as in the past. But it will not include information about compensation or hours worked.
The EEOC will provide additional information about the EEO-1 based on OMB’s review.
President Trump’s 2018 budget includes merging the Office of Federal Contract Compliance Programs (OFCCP) into the Equal Employment Opportunity Commission (EEOC). The underlying theory is that both agencies deal with employment discrimination and the combination would save money. There is significant opposition, however, from both employer and employee groups.
The OFCCP is currently housed within the Department of Labor. It was created in 1978 under President Carter to centralize enforcement of federal affirmative action requirements. The requirements apply to certain entities with federal grants or contracts. In some cases, these companies must create and maintain written affirmative action plans. The goal is to promote hiring of women, minorities, persons with disabilities, and veterans. Affirmative action does not technically permit employers to discriminate in favor of these groups at the expense of other employees. Rather, it focuses on enhancing recruiting efforts to include these populations and eliminating discrimination against these protected groups.
What is the EEOC?
The EEOC is a federal agency separate from the Department of Labor. It was created in 1965. The EEOC administers and enforces federal workplace discrimination laws, including: Title VII, the Equal Pay Act, the Americans With Disabilities Act, the Age Discrimination in Employment Act, and the Genetic Information Nondiscrimination Act. These laws apply to all employers in the U.S. with enough employees. (Of these laws the ADEA has the highest threshold at 20 employees.)
President Trump has shown a strong desire and willingness to deregulate the federal government. So to the extent that this proposal could streamline federal oversight of employment policy, it fits within his agenda. Not everyone agrees that this would be the reality, however.
It’s too soon to tell, but there is a good chance it will stay where it is. At this point, the merger is only a White House proposal. Congress would have to approve it and amend existing laws to fully transfer all necessary authority to the EEOC.
With so many groups opposed from all sides, this seems like an area the Republicans facing re-election next year would want to avoid. But another aspect of the White House budget, reduced funding of the OFCCP, could perhaps garner sufficient support.
Many state and federal laws prohibit employment discrimination across the United States. While it is ideal to prevent discrimination before it occurs, sometimes employers do receive complaints and have to deal with them. How you handle complaints of employment discrimination can have a significant impact on your organization, for better or worse. Hopefully by reading this it will be for the better!
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What Laws Prohibit Employment Discrimination?
At the federal level, some of the key employment discrimination laws are:
Title VII of the Civil Rights Act of 1964 (race, color, sex, national origin, religion)
Americans with Disabilities Act (disability, perceived disability)
Age Discrimination in Employment Act (age: 40+)
Genetic Information Nondiscrimination Act (genetic information)
Equal Pay Act (sex: compensation)
Across the State of New York, the New York Human Rights Law also provides protection based on the following categories:
Race
Creed
Color
National origin
Sexual orientation
Military status
Sex
Age
Marital status
Domestic violence victim status
Disability
Pregnancy-related condition
Predisposing genetic characteristics
Prior arrest or conviction record
Familial status
For employees in the five boroughs of New York City, the New York City Human Rights Law also provides protection based on the following characteristics:
Age
Alienage or citizenship statue
Color
Disability
Gender (including sexual harassment)
Gender Identity
Marital status and partnership status
National origin
Pregnancy
Race
Religion/Creed
Sexual orientation
What Is Employment Discrimination?
Generally speaking, discrimination under the above laws is an adverse or negative impact that is based, at least in part, on one of the legally protected categories. Discrimination may occur with respect to hiring, firing, promotion, compensation, or other terms and conditions of employment. Discrimination also includes harassment.
Unlawful harassment consists of unwelcome conduct that becomes a condition of continued employment and is severe or pervasive enough to create a work environment that a reasonable person would consider intimidating, hostile, or abusive.
The employment discrimination laws also prohibit retaliation for opposing unlawful discriminatory practices.
Internal Employment Discrimination Complaints
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Sometimes employees will make employment discrimination complaints to their employers directly. They may first complain to human resources, a supervisor, or perhaps an owner of the company. These complaints should always be taken very seriously. Under the various employment discrimination laws, employers may sometimes have legal defenses based on whether they have been made aware of alleged discrimination and how they responded to the allegations. Obviously, evidence that legitimate complaints were ignored will not help the employer’s case!
A lead investigator (often a human resources professional) should then investigate the allegations in the complaint. This will usually begin with interviewing the complaining employee. If applicable, other witnesses and the alleged discriminator(s) should also be interviewed. Once the investigator has completed the investigation, he/she should prepare findings and recommend an outcome. The outcome should usually be conveyed to the complaining employee. Sometimes additional employees, such as alleged harassers and relevant supervisors will also need to be notified.
If warranted, the employer may take disciplinary action against one or more employees as a result of the allegations. In some cases, appropriate corrective action will instead involve making changes to workplace policies, procedures, etc. In other cases, the aggrieved employee may receive a job change, compensation correction, or other modification to remedy the perceived discrimination.
Employment Discrimination Complaints to Governmental Agencies
In many cases New York employees have a choice of filing employment discrimination complaints with either the New York State Division of Human Rights (State Division) or the U.S. Equal Employment Opportunity Commission (EEOC). There are also some local civil rights agencies within the state, such as the New York City Commission on Human Rights. In many cases, a complaint filed with one of these agencies will be cross-filed with another. Usually, however, one agency takes the lead in investigating a particular complaint.
Once the State Division or EEOC receives a complaint that is valid on its face, they usually send a copy of the complaint to the employer involved. Employers are first given the opportunity to submit a position statement and relevant documents in response to the allegations made in the complaint. Employers should take this step very seriously, as it sets the basis for their defense to the claims made. Most employers should involve legal counsel familiar with responding to employment discrimination claims at this stage.
The position statement will explains the employer’s side of the story. Sometimes the employee’s account is accurate, but incomplete. Other times, it is inaccurate in the first place. Either way, the reality is that the employer may know more about the circumstances than the employee does at this stage.
Once the agency receives the employer’s position statement, they typically send it to the complaining employee for review and comment. Therefore, a complete, well-written position statement can be used not only to show the government investigator that no discrimination occurred, but also to demonstrate to the employee that they weren’t wronged in the way they thought they were. This can sometimes persuade the employee to either withdraw or at least lose interest in their complaint.
After receiving the position statement and any rebuttal statement from the complainant, the agency may conduct further investigation. This can include a request for additional documents or other evidence or interviews with individuals involved. When interviewing (non-complainant) supervisory employees, the State Division and EEOC will usually permit an attorney representing the employer to be present. The investigators may seek contact information to be able to speak to non-supervisors directly, without employer representatives present.
Sometimes the agencies will hold investigatory conferences where both the employer and complainant will be present together. These may occur either by phone or in person. Typically, the investigator asks all of the questions, and the parties do not get to cross-examine each other. Nonetheless, employers should have legal representation at this stage. Attorneys can help ensure that all of the helpful information is presented, such as by subtly suggesting that the investigator may want to ask a particular question. Plus, it best that the attorney have the opportunity to observe all witnesses present for the investigative conference in case the matter proceeds to a hearing or further litigation.
Often investigators will conclude an investigatory conference by requesting additional information from either or both parties. After all information is submitted, the State Division or EEOC will make a determination as to whether to proceed with the case.
Possible Outcomes of Agency Investigations
After completing its investigation, the New York State Division of Human Rights will issue either a “Probable Cause” or “No Probable Cause” finding. If they find Probable Cause, then the case will continue to a public hearing. The hearing is similar to court trial, but is somewhat less formal and usually held in a conference room rather than a court room. A No Probable Cause finding ends the administrative case in favor of the employer; however, employees can appeal the State Division’s determination through the courts.
In most cases the EEOC will issue a Notice of Right to Sue to the employee regardless of its investigatory findings. This Notice gives the complaining party 90 days to file a lawsuit in court under the applicable federal employment discrimination statutes. The Notice of Right to Sue will further identify the basis for the dismissal, essentially again indicating whether the EEOC found any basis for the charge of discrimination. However, the EEOC’s finding does not determine the outcome of a possible court case.
If it finds a case particularly worthy of pursuing, the EEOC can file a lawsuit on its own behalf against the employer on the basis of an employee’s discrimination claim. Given limited enforcement resources, the EEOC only takes a small percentage of charges to litigation. Often these are cases affecting numerous employees or featuring especially egregious examples of discrimination.
If an employment discrimination case ends up in either an administrative public hearing or in court, then employers will particularly benefit from having had legal counsel involved throughout the process.
Don’t Forget This Part
It’s not the end of the world if your business receives an employment discrimination complaint. With the proliferation of laws protecting employees, any organization with employees can be hit with a complaint at any time. Sometimes there is just a misunderstanding that needs to be worked out. Other times, the process will take longer to resolve, but employers often prevail in these matters.
And please do obtain legal advice, especially once an administrative agency like the New York State Division of Human Rights or the EEOC gets involved. Experienced employment lawyers can offer various levels of assistance with the process depending on your needs and circumstances. If you think I would be the right person to assist you, let me know.
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