If you are a Government prime contractor or subcontractor working under an agreement worth at least $50,000, and you have at least 50 employees (part-time employees included), then March 31, 2019 should mean something to you. March 31 is the day when the EEO-1 Report (SF 100) is due to the Equal Employment Opportunity Commission (“EEOC”), and the U.S. Department of Labor (“DOL”), Office of Federal Contract Compliance Programs (“OFCCP”). At least, that is the day when the EEO-1 Report is supposed to be due, assuming that there is not another Government shutdown, and the previous partial Government shutdown does not cause the EEOC to push back the reporting deadline.
Side note regarding entities not involved in Government contracts—if you are a private employer with 100 or more employees and you are subject to Title VII of the Civil Rights Act of 1964 (as amended), or you are a smaller part of a non-exempt single enterprise with 100 or more employees, then the EEO-1 Report applies to you as well. However, this blog piece addresses reporting for Government contractors and subcontractors.
In any event, if you have been previously unaware of this compliance requirement, it is time to get acquainted. Here are the basics.
What is reported?
The Government wants to know the demographic composition of the contractor workforce. Accordingly, the EEO-1 report requires a contractor/subcontractor to provide quantification of its employees by ethnicity (Pacific Islander, Hispanic, Native American, etc.), male or female, and broken down into nine job categories. The nine job categories for the report are as follows: Executive/Senior Level Managers; Mid-Level Managers; Professionals; Technicians; Sales Workers; Administrative Support; Craft Workers, Operators; Laborers; and Service Workers. Because the demographic composition of a contractor’s workforce is constantly changing, the report typically seeks a snap shot from a payroll period during the last quarter of the calendar year. Instructions for the EEO-1 report are available here.
An EEOC guide that maps specific occupations to the nine job categories is available here.
The report becomes more complex if the contractor/subcontractor operates at multiple physical locations, because the Government requires the reporter to give separate data for each location. Also, you can read the previous blogs, available here and here, which address the possibility that, at some point in the future, the EEO-1 Report may require employers to report pay data.
Who must report?
The regulation makes clear that the reporting obligation falls upon a “prime contractor or subcontractor [that] (i) is not exempt from the provisions of these regulations (see below); (ii) has 50 or more employees; (iii) is a prime contractor or first tier subcontractor; and (iv) has a contract, subcontract or purchase order amounting to $50,000 or more or serves as a depository of Government funds in any amount, or is a financial institution which is an issuing and paying agent for U.S. savings bonds and savings notes[.]” 41 C.F.R. § 60-1.7(a). The reporting requirement is reinforced by paragraph (b)(8) of the Equal Opportunity FAR Clause (FAR Clause 52.222-26), which is flowed down to applicable subcontractors. The EEOC has the authority to require prime contractors and subcontractors to report under Title VII of the amended Civil Rights Act of 1964. See 42 U.S.C. § 2000e-8(c)-(d).
What are the reporting exemptions?
Per regulation, the report does not apply to “work performed outside the United States by employees who were not recruited within the United States[.]” 41 C.F.R. § 60-1.5(a)(3). In practice, this typically means that the contractor/subcontractor will report data for its activities within the United States, but not outside the United States.
Also, some educational institutions are exempt from reporting. See id. at § 60-1.5(a)(6). Further, the DOL Deputy Assistant Secretary for Federal Contract Compliance can grant an exemption for a facility not involved in contract performance, or if it is in the “national interest[,]” or for national security reasons. See id. at § 60-1.5(b)-(c). Additionally, a contractor/subcontractor can also seek an “undue hardship” exemption from the EEOC. See 29 C.F.R. § 1602.10.
What is the purpose of the report?
Per the EEOC’s website—the Government “use[s] the EEO-1 Report data to support civil rights enforcement and to analyze employment patterns, such as the representation of women and minorities within companies, industries or regions.” EEO-1 Frequently Asked Questions and Answers, www.eeoc.gov (last viewed Jan. 25, 2019).
What are the consequences of failing to report?
Although not often enforced, there are several possible sanctions for failing to file a report. The EEOC can compel a contractor/subcontractor to report by obtaining an order from a U.S. district court. See 29 C.F.R. § 1602.9. A failure to report could also trigger an OFCCP compliance audit/investigation. Additionally, because the reporting requirement is reiterated by FAR Clause 52.222-26(b)(8) (Equal Opportunity), a failure to report is technically a failure to perform the contract/subcontract. The Equal Opportunity clause states that “[i]f the OFCCP determines that the Contractor is not in compliance with this clause or any rule, regulation, or order of the Secretary of Labor, this contract may be canceled, terminated, or suspended in whole or in part and the Contractor may be declared ineligible for further Government contracts, under the procedures authorized in Executive Order 11246, as amended.” FAR Clause 52.222-26(b)(10). It is also worth noting that, under FAR 22.805, OFCCP is supposed to conduct a pre-award clearance check for every non-construction contract or subcontract in excess of $10 million. See FAR 22.805(a). If a contractor/subcontractor has failed to file the latest EEO-1 report, it could form the basis of withholding an award.
How is the report filed?
The report is to be completed and filed on the EEOC’s EEO-1 web portal. However, per the EEOC’s Government shutdown notice, the EEO-1 web portal is presently closed, and it remains to be seen when it will open to start accepting 2018 EEO-1 reports.
In extraordinary circumstances and with prior approval, the EEOC will accept a paper submission of the EEO-1 report.
Is the report confidential?
42 U.S.C. § 2000e-8 prevents public release of an EEO-1 report and even makes it a crime if an EEOC employee publicly releases the information. See 42 U.S.C. § 2000e-8(e); see also 29 C.F.R. § 1641.3 (extending the confidentiality requirement to the DOL). However, previous EEO-1 reports are often sought by a plaintiff in a discrimination lawsuit and may be subpoenaed directly from the contractor or subcontractor.
How does one pose questions or request an extension?
Although the Government requests that you first review the EEOC’s Q&As webpage, specific questions may be sent to [email protected]. Timely receipt of an answer will depend upon how quickly the EEOC gets back up to speed following the recent partial Government shutdown, as EEOC is one of the agencies that experienced a lapse in appropriations.
A contractor/subcontractor may request an extension before the deadline passes by sending an e-mail to [email protected]. See 41 C.F.R. § 60-1.7(a)(2). However, as already stated, the March 31 deadline may be generally extended due to the recent partial Government shutdown.
What does a contractor/subcontractor do if it is undergoing a merger or acquisition?
If there is a merger or acquisition involving two contractors that are both already EEO-1 report filers, the new entity may e-mail the EEOC at [email protected] in order to consolidate the EEO-1 reporting going forward.
Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.
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