Remarks of the United States Chamber of Commerce

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

I am here today on behalf of the United States Chamber of Commerce to discuss the impact that the proposed changes to the EEO-1 reporting scheme will have on this nation\rquote s employers. The Chamber is the world\rquote s largest business federation, representing more than three million businesses and organizations of every size, sector, and region, with substantial membership in all 50 states. The Chamber represents its members interests in matters before all branches of government. On behalf of the Chamber, I would like to thank you for providing us this opportunity to address the Agency on an issue that impacts so many employers, both large and small.

The Chamber has already submitted detailed comments on the proposed changes. Today, I would like to discuss the impact of the most significant changes. I have organized my comments into two subject areas: (1) the proposed changes to reporting data on race and ethnicity, and (2) the revised EEO-1 job categories.

First, while the Chamber has some reservations about the proposed method of collecting race and ethnicity data, the Chamber generally endorses the EEOCs proposed race/ethnicity categories. We recognize that the Agency was faced with a difficult task in redefining the race/ethnicity categories to square with the 2000 Census data. We believe that the two or more races category is a reasonable means for addressing the difficult issue of racial identification, as many people in this country do not define themselves by a single racial identity. It is important that such individuals be permitted to identify themselves, and be reported, as more than one race. Equally important to Chamber members is the fact that utilizing a single category for purposes of analysis - two or more races - rather than requiring employers to report, and analyze, every race combination, appropriately limits the new data collection and reporting burden on employers.

The Chamber's endorsement of this approach, however, is conditional. Our support is conditioned on the presumption that the EEOC's approach has the support of other enforcement agencies, including the Office of Federal Contract Compliance Programs (OFCCP), and that the OFCCP will adopt a consistent position regarding the data collection and analysis requirements for government contractors. This is of substantial concern to our members because the failure to do so would create an inconsistent tracking and reporting obligation that would impose a significant - and wholly unnecessary - burden on employers. Moving beyond the categories themselves, I would like to briefly discuss the way that this race/ethnicity data will be collected. The Agency has proposed a two question format that singles out Hispanics and Latinos for individual treatment. Many Chamber members have expressed confusion about why ethnicity is addressed in a separate question, and why Hispanic/Latino is the only ethnic category identified. Front-line human resources personnel do not know how to respond to employees questions about this proposed distinction between race and ethnicity. This is what the government tells us to do is not a sufficient response to give employees who have legitimate questions about a very sensitive subject. The Chamber encourages the EEOC to provide detailed background guidance on this issue. To the extent the EEOC believes that a two question format is required by federal legislation that mandates separate tracking of Hispanic/Latino individuals, we suggest that the EEOC identify this rationale and the statutory authority underlying this decision.

The Chamber has several other concerns about the Suggested Questionnaire, all of which are outlined in detail in the comments previously submitted by the Chamber. Our two primary concerns are that: (1) the Questionnaire discourages employees from providing both race and ethnicity information; and (2) the Questionnaire does not clearly state that an employees response is voluntary. Our written comments propose changes that would remedy these two deficiencies.

I would like to now move to the second topic, which is the proposed changes to the EEO-1 job categories. The Chamber is concerned that the proposed job category changes will result in confusion, inconsistent reporting, and considerable unnecessary employer time and expense.

Of greatest concern is the proposal to divide the current Officials and Managers Job Category into three separate categories. Input that we received from multiple Chamber member organizations, both large and small, indicates that the three-tiered Officials and Managers job category is an unworkable framework because it draws arbitrary lines between management levels. Many Chamber members have expressed concern about how they would funnel their multi-tiered management structures into three distinct categories.

Consider for a moment a management structure common among our larger employer members: at the top is a President or CEO; reporting to him or her are several Senior Vice Presidents; we then have multiple Vice Presidents who directly report either to a Senior Vice President or to the President him/herself. One of these Vice Presidents is also the Chief Financial Officer. Below these Vice Presidents are directors, and below the directors are managers, some of whom report directly to Vice Presidents. The Agency's proposal classifies chief financial officers as Executive/Senior Level Officials, while Vice Presidents are classified as Mid-Level Officials and Managers. How then does our employer classify the individual who serves as Vice President and CFO? Where does it draw the lines among its other top management positions?

Moreover, there is the question of whether employers should classify their managers as Mid-Level Officials or Lower-Level Officials. According to the Agency proposal, an information systems manager is classified as a Mid-Level Official, while a technical support manager is classified as a Lower-Level Official. Human resources managers and marketing managers are classified as Mid-Level Officials, while purchasing managers and customer service managers are classified as Lower-Level Officials. Some managers, such as managers of gaming workers and managers of landscaping, lawn service and groundskeeping workers, are not classified as Officials and Managers at all. Employers are going to have a difficult time properly categorizing their managers based on these confusing guidelines. Different employers are undoubtedly going to reach different conclusions, and the consistency that is currently displayed across organizations - under the one-category approach - will be lost.

The Chamber urges the Agency to adopt EEO-1 Job Categories that will maximize the likelihood of consistent reporting across organizations and industries. This is the only way for the EEOC to identify trends, understand industry practices, and determine where there is any indication of discrimination worthy of further investigation. The surest way to maintain consistency is to retain a single Officials and Managers category. Dividing the single Officials and Managers category into three categories as proposed will significantly decrease the likelihood of consistency. Due to the subjectivity inherent in the new categories, it is likely that two individuals doing virtually identical work for different employers will be placed in two different categories. Should the EEOC nonetheless decide to parse the Officials and Managers category, the Chamber recommends that it divide the category into only two sub-categories - Senior Management and Other Management - with a bright line between them. Senior Management would encompass individuals who set policies and manage an organization as a whole. It would include individuals who are division, operation or function leaders. Other Management would be used to classify the managerial workforce that implements the policies established by Senior Management. This would include both front-line and mid-level managers who are responsible for day-to-day management and implementation of company policy, rather than policy development.

We believe that this straight-forward distinction between those who set policies and those who manage the implementation of policies accommodates the EEOC's desire to create sub-categories, and also provides a clearer, more realistic division of the management ranks.

The other Job Classification issue I would like to discuss is the Agency\rquote s renumbering of other job categories, for which no rationale has been articulated. While this change may seem insignificant, numerous Chamber members expressed concern about this proposal because it will be burdensome, it will create an unnecessary implementation cost, it will generate confusion, and it will provide no benefit.

Multiple Chamber members report that they code the EEO-1 data in their HRIS systems by the EEO-1 Job Category Number. As such, the proposed renumbering would require all of these employers to spend time and money revising countless data records to reflect the new numbering system. We are particularly concerned about small businesses, which are often operating with limited resources and rudimentary HRIS systems at best. I would also note that many HR professionals think and speak in terms of the current EEO-1 Job Category codes rather than names. Changing the numbering system that has been used for decades would result in considerable confusion for them in communication and conceptualization.

The Agency has not articulated a reason for this numbering change. We can identify no rationale for changing a structure that is firmly imbedded in both the consciousness and computer systems of countless employers. We strongly encourage the Agency to maintain the current numbering scheme.

The final comment I would like to make concerns the implementation of the proposed changes. The Agency has not indicated how much time employers will be given to change their personnel management systems to satisfy the new requirements. Once the changes are finalized, each employer will be required to resurvey its entire workforce for race and ethnicity data. Each will have to re-categorize its Officials and Managers into multiple levels, and will have to reconfigure its HRIS systems to accommodate the data changes. The technological changes, and the necessary training of HR and recruiting personnel, is going to take considerable time. Further, assuming the OFCCP will revise its regulations to be consistent with the proposed framework, government contractors will be required to collect and analyze data using the new race/ethnicity categories. It would be impossible for these employers to switch practices mid-stream. The Chamber strongly encourages the Agency to give employers ample time for this transition. We recommend that the proposed changes become effective no sooner than January 1, 2005.

I would like to thank you again for the opportunity to share the views of the United States Chamber of Commerce and its members.

This page was last modified on October 29, 2003.