The Equal Employment Opportunity Commission (EEOC) has announced it is extending the filing deadline for employers to submit the EEO-1 form to Oct. 25, when employers are expected to include workforce demographic data for both 2019 and 2020.
In another development, the Office of Federal Contract Compliance Programs (OFCCP), the agency responsible for supervising federal contractors and subcontractors, reported a change in policy regarding its intention to use EEO-1, Component 2 compensation data collected by the EEOC for calendar years 2018 and 2019 in evaluating contractors’ affirmative action programs. The office earlier had announced that it would not use this data.
This reversal is seen as a signaling of a more aggressive approach to enforcing affirmative action requirements for federal contractors.
When it comes to the EEO-1 form in its current configuration, employers with 100 or more employees, as well as federal contractors and first-tier subcontractors who have 50 or more workers, are required to file it. Employers are expected to use the form to submit to the EEOC demographic information about the race, gender and the ethnicity of members of their workforce, further broken down by job category.
The commission earlier had set a deadline for April and then moved it to late August, but decided to move the deadline to Oct. 25. The earlier delays were caused by a high number of companies seeking help with how to fill out the form in the wake of mergers, acquisitions and spinoffs during the economic turmoil of the past 18 months.
The EEOC earlier reported that it has had a backlog of outstanding support requests and has taken up to four weeks to respond, in some cases, and said the latest delay was caused by difficulties faced by employers due to the COVID-19 pandemic.
The EEOC warned employers not to expect any further delays in no uncertain terms. “Please note that this new deadline is the FINAL DEADLINE and all eligible filers MUST submit data by this date,” the commission stressed, adding that “no additional changes to the filing deadline will be made.”
Last year, the commission decided to postpone collection of 2019 data to this year because of the massive disruptions to the economy and business operations that grew out of the COVID-19 pandemic.
Employers who need help with compiling and submitting the data can visit https://EEOCdata.org for more information regarding updates on the data collection. The EEOC Filer Support Team also will be available to respond to any employer inquiries and to provide additional filling assistance, the commission said.
In a separate development, the OFCCP’s decision to use of EEO-1, Component 2 compensation could prove to be controversial. The Component 2 form was adopted by the Obama-era EEOC, but it was dropped later by the commission during the Trump administration. It imposed highly detailed and numerous additional reporting requirements and was subject to court challenge from the moment it was adopted.
The agency said it will “evaluate the data’s utility because the joint collection and analysis of compensation data could improve OFCCP’s ability to efficiently and effectively investigate potential pay discrimination.” It also said it is considering using the Component 2 data in conjunction with other available information, such as labor market survey data in selecting contractors for compliance evaluations.
Enhancing Enforcement of Equity
Attorney Jack Blum of the Polsinelli law firm said the announcement “appears to set the table for enhanced enforcement in the area of pay equity and compensation discrimination, as OFCCP is signaling it will use the EEO-1 pay data to select contractors for compliance evaluations.”
Given the agency’s discontinuance of disability- and veteran-oriented focused reviews in favor of full compliance evaluations, OFCCP will be collecting employee-level compensation information in all of its compliance evaluations, he pointed out.
“The announcement may also signal that OFCCP is coordinating with the EEOC on reinstating the Component 2 requirement, as the 2017 and 2018 data collected by EEOC would appear to have limited utility on a going forward basis,” Blum observed.
However, the OFCCP announcement and indications issuing from the EEOC earlier this year suggest that the commission may choose to revive the Component 2 approach. If that eventually occurs, expect to see further litigation that will drag on and won’t be resolved until there is a new presidential administration.
“OFCCP’s 180-degree turn provides yet another example of the aggressive stance the Biden administration has taken (and is expected to continue to take) with respect to issues of pay equity, and its willingness to use the carrot of federal contracting to regulate private-sector employers that do business with the federal government,” said attorneys for the law firm of Littler Mendelson.
They suggest that the most significant consequence of the office’s decision is that it may pose the danger of exposing contractor pay data to public disclosure through Freedom of Information Act (FOIA) requests. While an individual employer’s Component 2 data that has been provided to the EEOC is clearly protected from further disclosure by the commission, the FOIA protections that apply to EEO-1 data that is in OFCCP’s possession has been a subject of prior litigation, the attorneys warn.
A more aggressive approach taken by OFCCP to enforce its affirmative action standards should come as no surprise in a Biden administration. OFCCP's recent leadership changes signal that OFCCP is clearly focused on more vigorous enforcement of employee rights.
In January, Jenny Yang was named that agency’s director. During the Obama Administration, she held leadership roles with the EEOC. In July, Maya Raghu became the office’s deputy director. She previously served as the director of workplace equality and senior counsel at the National Women's Law Center, which successfully sued in federal court to keep the Component 2 process in place.
Yang said OFCCP’s priorities now include increased enforcement efforts with a continuing focus on pay equity and compensation discrimination, including an increased focus on equity and discrimination issues relating to employee fringe benefits, including leave. She also has stated that OFCCP will focus on systemic/institutional bias in hiring and “compound intersectional discrimination” (discrimination that is believed to be based on, and made worse by, multiple protected characteristics and identities).
“It is expected that OFCCP investigations of pay discrimination cases will likely be more stringent, with an increased focus on wage and hour data gathering and analysis,” the Littler Mendelson attorneys predict.
As a reminder, they note that even when not investigating a pay discrimination complaint, OFCCP routinely asks for a contractor’s compensation data as part of its compliance audit process, including corresponding information about employee gender, race/ethnicity information, hire date, EEO-1 category and job group.
On another front, employers also need to keep an eye out for the OFCCP’s expected Affirmative Action Verification Initiative (AAVI), which is currently still under development. This program would require federal contractors to verify to the government that they have written affirmative action programs.
Contractors that fail to prepare a plan but verify their compliance will be making a material representation to the government, according to the Littler Mendelson attorneys. A federal contractor’s failure to complete the verification at all is likely to increase that employer’s risk of audit.
The OFCCP apparently believes that adopting a verification obligation will increase the likelihood that federal contractors will choose to develop and maintain the kind of written affirmative action plans that are currently required by law.
AAVI would also allow for the transfer of affirmative action program data between federal contractors and OFCCP. While OFCCP already has a webpage dedicated to an “Affirmative Action Plan Verification Interface,” it provides only a brief description of the program and only says that it is “coming soon.”