Remarks of Juanita M. Beecher Chair, Employment Law & Litigation Group ORC Worldwide

Public Hearing of October 29, 2003 on Proposed Revised Employer Information Report (EEO-1)

Madam Chair, Madam Vice-Chair, Commissioner Silverman, Commissioner Miller, and colleagues: On behalf of ORC Worldwide (ORC), I appreciate the opportunity to appear before the Commission to offer our comments on the Commission’s proposed changes to the Employer Information Report (EEO-1) required annually of private employers with 100 or more employees and certain federal government contractors and first-tier subcontractors with 50 or more employees.

Introduction

ORC Worldwide is an international management consulting firm specializing in human resources. Nearly 300 senior managers and corporate labor and employment counsel from major Fortune 500 companies participate in networks and other activities sponsored by ORC in order to improve compliance and management systems and practices in the areas of equal employment opportunity, affirmative action and diversity, as well as labor and employment law.

All of ORC’s members are employers who must file EEO-1 report and many are also federal government contractors who must prepare affirmative action plans.

ORC’s testimony will focus on the practical impact of the proposed revisions on employers. The unspoken question for all government contractors is what beneficial impact these changes will have on their affirmative action planning obligations. As we stated in our comment letter, it would be most helpful to employers if there were a uniform approach reflecting the EEOC and OFCCP requirements for employers and federal contractors to collect, analyze, and report data on the race and ethnicity of employees. Employers are unclear as to whether they will be expected to provide one type of data to the EEOC for the EEO-1 report and different information to the OFCCP for affirmative action plans. Changes in EEO-1 reporting will inevitably require costly system changes for most employers. If employers must then implement additional system changes to accommodate differing data collection requirements from the OFCCP, the financial costs will be even more burdensome to employers.

For these reasons, ORC believes a more practicable approach for both the Commission and employers would be to delay the modifications to the survey until the related regulations from all related agencies can be finalized rather than implement these changes piecemeal and then require employers to undergo costly retooling for additional changes in the near future. These are very difficult economic times for employers, and they simply cannot spare the manpower or incur the additional expense to comply with differing requirements.

All of ORC’s comments reflect the concern that the proposed regulations as presently crafted are very burdensome to employers. ORC recommends the following to the Commission to relieve some of the burden:

• Make the effective date for the proposed changes 2005 or later;
• Clarify what data must be collected, analyzed, and maintained by employers especially with respect to the category “Two or more races”;
• Allow employers latitude in determining which job category a position must be placed;
• Retain the present job category order; and
• Provide additional guidance on the apparent changes made to the job category descriptions.

I will address each of these recommendations separately.

1. Make the effective date for the proposed changes 2005 or later

As stated earlier, ORC is very concerned that the Commission has not fully considered all the system changes that the revisions in the EEO-1 survey will require. Employers generally have used the EEO job categories in all their human resource computer systems so any changes will require extensive reprogramming of those systems in order to provide the new data required by these revisions. The burden will far exceed the estimated one-time burden of 14 hours of additional work or $220 per employer. The timing of these proposed changes could not be worse considering the lean economic times for corporations.

The Commission can relieve some of the burden for employers to implement these proposed changes by having an effective date for the regulations of no sooner than 2005. This would allow employers an opportunity to make the necessary changes to their computer systems prior to the implementation date. It is cost prohibitive for employers to make any changes to their computer systems until the Commission finalizes these regulations because of the time and expense involved If the effective date is sooner than 2005, it will be difficult if not impossible for employers to comply.

2. Clarify what data must be collected, analyzed, and maintained by employers especially with respect to the category “Two or more races”

The Commission could lessen the burden on employers if the proposal on collecting, reporting, and maintaining data were clarified. The proposal clearly requires employers to provide employees the option to self-identify as “two or more races”. What is not clear from the regulations is to what extent employers are required to retain and maintain the data on the 62 variations on race categories that could result from their selection of the “two or more races” category. ORC understands that the Chair has clarified in a letter that employers are only required to report on the seven racial/ethnicity categories provided in the proposed regulations. However, ORC recommends that this clarification be made in the final regulations as well. The clarification would remove an enormous financial burden on employers and the retention is clearly not necessary for the proper performance of the Commission’s functions.

Moreover, the proposal that those employees who are Hispanic or Latino cannot report themselves as multiracial is problematic for those Hispanics/Latinos who perceive themselves as multiracial. The Commission could lessen the burden on employers from this change if the Commission would provide its rationale for limiting their choices, which would assist employers in gaining cooperation from their employees in complying with this requirement.

3. Allow employers latitude as to which job category jobs belong

On the issue of dividing the officials and managers category into three subcategories, many ORC members already report their officials and managers in this manner so the subdivision was not seen an additional burden. However, there was sharp objection to the jobs that were crosswalked to the job categories. The sentiment was that while the jobs that were crosswalked were welcome as “guidance” or “recommendations” by the Commission, they should not be considered mandatory for employers. The marketing mangers being at the second level was cited as an example of why the crosswalked jobs were not appropriate for all the employers. Each employer organizes as is most appropriate for its business and the jobs “crosswalked” will not be appropriate for all employers. If the Commission insists that the employers must report the jobs in the job categories, the employers will not be able to provide the Commission with accurate information about its organization. The Commission should reduce the burden on the employers by clarifying that the jobs “crosswalked” to the job category is only guidance for employers as to what type of jobs should be within the category and it not a mandatory requirement.

4. Retain the present order of the job categories

The reclassification of the job categories by moving the Service Workers up from 9 to 6 is an unnecessary burden on employers and would not improve or clarify the information provided to the Commission and so ORC recommends that the present job category order be retained.

5. Provide additional guidance on the apparent changes made to job category definitions

In response to another change that could place an undue burden on employers, ORC recommends the Commission explain the apparent changes to the Professionals, Technicians, and Service Workers categories. In the Professionals job category, the language has been revised to seem to limit nondegreed employees, which can be covered by the category. As to the Technicians job category, the language also appears to limit the nondegreed employees who would be covered although the jobs crosswalked to the job category do not seem to match the new definition. Finally, the Service Workers job category is now been subdivided into four subdivisions with little explanation of why or explanation as to how the new job category will be analyzed.

The changes were made in the proposed regulations without any explanation or notification to employers as to what the changes are or why they were being made. The changes appear to make substantive changes in the definitions of the three job categories and would appear to require an explanation. If the changes are not substantive, the final rule should express that fact.

6. Agrees that self-identification is the best method

ORC believes that the self-identification is the only method that can be used to determine those employees who categorized themselves as “two or more races”. While the proposed regulations will place a substantial burden on employers to have all employees self-identify, once these regulations are finalized, ORC understands that this is the most effective method to collect this information.

Conclusion

ORC commends the Commission on its efforts to revise the EEO-1 report to comply with the new census data and to update the 30-year-old form. ORC appreciates the opportunity to provide the agency with our comments and recommendations, which ORC hopes the Commission will consider. Thank you.

This page was last modified on October 29, 2003.