Thursday, November 10, 2022: U.S. EEOC Published Proposal to Eliminate Counting Employees to Determine Filing “Type” for EEO-1 Component 1 Data Collection
Proposed Changes Would “Streamline & Modernize” Data Collection, But Not Change the Demographic Data Collected
Multi-Establishment EEO-1 Survey Component 1 data filers would no longer be required to file a separate “type” of establishment report based on the size of an individual, non-headquarters establishment, under a new U.S. Equal Employment Opportunity Commission (EEOC) proposal. In place of the “Type 4” and “Type 8” reports, there would be a newly named “Establishment-Level Report,” according to a Federal Register notice of the proposal. All Multi-Establishment employers would use the Establishment-Level Report to submit establishment-level employee demographic data for each of their non-headquarters establishment(s) regardless of size.
The EEOC’s Office of Enterprise Data and Analytics (OEDA) identified these proposed measures to make the filing process “more user-friendly and less burdensome,” according to the notice. The Commission is seeking Office of Management and Budget (OMB) approval of these measures to “streamline and modernize” how the EEOC collects current EEO-1 Survey Component 1 data. The proposed revisions to this Information Collection Requirement (ICR) would not change the types of demographic workforce data historically collected by the EEO-1 for Component 1 (i.e., employee data by job category and sex and race or ethnicity), the agency maintains.
The current approval for the EEO-1 Survey ICR expires on June 30, 2023. The EEOC requested approval for these changes as part of its routine request for a three-year clearance to continue the Component 1 ICR under the Paperwork Reduction Act. If implemented, these changes would apply to the 2022 EEO-1 Survey Component 1 data collection, the notice states. That data collection is tentatively scheduled to open in April 2023. The 2021 EEO-1 Component 1 data collection cycle opened on April 12, 2022 and ended on June 21, 2022.
Written comments on this notice must be submitted on or before January 9, 2023.
Component 1 Report Types
The EEO-1 Survey Component 1 data collection has various report types seeking the race/ethnicity and sex, and ethnic data for employees to be reported in nine Job categories with one divided into two parts for a total of ten reporting categories at various kinds of employer establishments. Currently, all multi-establishment companies must submit a “Type 2 Consolidated Report,” often called the “consolidated report.” The Type 2 Report must include data for all employees of the company (i.e., all employees at headquarters as well as all establishments) categorized by race/ethnicity, sex, and job category. Multi-establishment companies are also required to submit: (A) one “Type 3 Headquarters Report”; (B) a Type 4 Establishment Report for each establishment with 50 or more employees; and (C) a Type 8 Establishment Report for each establishment with fewer than 50 employees. All these reports must include employee data for each establishment categorized by race/ethnicity, sex, and job category.
Single-establishment companies are required to submit only one EEO-1 Component 1 Report, known as the “Type 1 Single-Establishment Report.” These reports must include data for all the company’s employees categorized by race/ethnicity, sex, and job category. For more information on the various EEO-1 Survey report types, see: https://www.eeocdata.org/pdfs/EEO-1_Fact_Sheet.pdf.
Proposed Changes Would Eliminate Counting Employees to Determine Filing Type
Under the proposed changes, a Multi-Establishment filer would no longer have to take the additional step of counting employees in each establishment to determine whether to file a Type 4 or Type 8 report. Multi-Establishment filers would still be required to submit a “Headquarters” Report (formerly referred to as a “Type 3” Report) and a “Consolidated Report” (formerly referred to as a “Type 2” Report). However, all individual “Consolidated Reports” for all Multi-Establishment filers would be auto-populated and auto-generated with data from their “Headquarters Report” and “Establishment-Level Report(s)” within the EEOC’s electronic, web-based EEO-1 Survey Component 1 Online Filing System.
There Are Two Implications for Federal Government Contractors Which OFCCP’s Executive Order 11246 EEO-1 Filing Requirements Cover
First, the change to the EEO-1 Form also changes the form for those employers which are federal Government contractors with 50-99 employees.
Background: OFCCP’s tradition has been to impose EEO-1 reporting obligations using an EEO-1 form OFCCP and the EEOC have jointly developed and for which they have jointly sought authority to use. While it is odd that OFCCP did not join with the EEOC in the EEOC’s request to OMB to approve an extension of the current Paperwork Reduction Act (“PRA”) authority to collect EEO-1 information, it nonetheless appears that the authorization the EEOC seeks will affect the EEO-1 form and only one such format will thereafter exist, if OMB approves it (as expected).
Then, OFCCP’s Rules at 41 CFR Section 60-1.7(a) require covered federal Government contractors/subcontractors to file the “jointly-developed” EEO-1 form. OFCCP’s Rule at 41 CFR Section 60-17(a)(ii) then further expands the EEO-1 filing requirement beyond those employers covered by the EEOC’s Rules issued pursuant to Title VII of the 1964 Civil Rights Act. Specifically, OFCCP’s EEO-1 filing Rule requires: (a) covered federal Government contractors/subcontractors to file the “jointly-developed” EEO-1 form, and (b) also drops the employee size threshold for filing from the EEOC’s 100-employee Rule to 50 employees if the employer is a covered federal Government contractor/subcontractor. Thus, OFCCP’s Rule brings covered federal Government contractors with 50-99 employees into the EEO-1 filing requirement.
Finally, OFCCP believes its Rule at 41 CFR Section 60-1.7 is all it needs to impose the requirement to compel covered federal Government contractors to file EEO-1s. OFCCP, therefore, does not participate in the EEOC’s request to OMB for permission to require the EEO-1 filings pursuant to the PRA. No contractor has yet challenged OFCCP’s reading of OFCCP’s Rules which the agency believes do not require it to seek PRA authority to continue collecting the EEO-1 form for those covered federal Government contractors employing fewer than 100 employees. Of course, this issue affects only those covered federal Government contractors with 50-99 employees as covered federal Government contractors with 100 or more employees are also “employers” subject to the EEOC’s EEO-1 filing requirement.
Second, OFCCP will have to either (a) change its OFCCP AAP Certification Portal filing protocols, or (b) maintain its current EEO-1 Rules that require multi-establishment federal contractors employing 50 or more employees (INCLUDING those employing 100 or more employees) to identify those establishments with fifty or fewer employees, or (c) change its now 40-year-old policy determination NOT to audit federal contractor establishments employing 49 or fewer employees. This is because OFCCP has historically consulted the EEO-1 filings, and recently the reports in its own AAP Certification Portal, to identify which contractor AAP establishments employ 49 or fewer employees. Then, OFCCP has historically excluded those establishments employing 49 or fewer employees from OFCCP’s audit lists. Without EEO-1 Reports segregating contractor establishments into those below 50 employees and those employing 50 or more employees, OFCCP will not know which federal contractor establishments employ 49 or fewer employees. As a result, OFCCP will inadvertently select for audit in coming audit selection cycles numerous federal contractor establishments employing 49 or fewer employees.
OMB Previously Separated Control Numbers for Components 1 and 2
The latest Federal Register notice references two earlier notices from September 12, 2019, and March 23, 2020. As we reported (here and here), in those previous notices, the EEOC sought OMB’s approval to remove and separate the OMB control numbers for Component 1 from OMB control number 3046-0007 and assign it a new control number. At that time, the Commission did not ask OMB to renew Component 2 under OMB control number 3046–0007. The OMB approved the EEOC’s request on June 12, 2020, and assigned Component 1 the OMB control number 3046-0049.
Why Do OMB Control Numbers Matter?
A federal agency generally cannot conduct or sponsor a collection of information extending to more than nine members of the public, and the public is not required to respond to an information collection unless the OMB approves it and displays a currently valid OMB Control Number. In addition, a federal agency may not typically prosecute a member of the public for failing to comply with a collection of information that does not display a valid OMB Control Number, even if the agency has the authority and approval to undertake the collection.
[Note: The portion of the report that the EEOC refers to as “Component 1” requires covered private sector employers to provide workforce profiles by race, ethnicity, sex, and job category. As explained above, the Type 2 Consolidated Report is one of the various Component 1 report types. The Type 2 Consolidated Report for Component 1 is not to be confused with the “Component 2” pay data reporting. The EEOC (not OFCCP) added Component 2 for one filing cycle – which collected aggregate data on pay ranges and hours worked – for a limited run during the reporting years 2017-2018. (For recent developments on Component 2, go here and here.)]
Burden Estimates
The EEOC spent considerable space in its six-page notice covering burden estimates. Based on data trends over the last three EEO-1 Component 1 data collection reporting years (i.e., 2019, 2020, 2021), as well as ongoing updates by the EEOC to the EEO-1 Component 1 frame (i.e., filer roster or master list), the Commission believes the total number of filers submitting at least one report may increase to 110,000. The agency estimated 2,235,938 reports per annual collection. The Commission also estimated, per annual collection: 5,238,467 reporting hours; $272,275,151.80 respondent burden hour cost; and $4,113,388.55 federal cost.
The notice included the following table to outline the number of reports, the average reporting time by report type, and the aggregate number of hours estimated to submit these reports.