Return to Home PageThe U.S. Equal Employment Opportunity Commission
EEOC NOTICE
Number 915.002
Date 5/2/97
1. SUBJECT. Enforcement Guidance on Equal Employment
Opportunity Commission & Walters v. Metropolitan Educational
Enterprises, Inc., 117 S.Ct. 660 (1997).
2. PURPOSE. This enforcement guidance analyzes the
Metropolitan decision and provides guidance on how to count
employees when determining whether the Respondent satisfies the
jurisdictional prerequisite for coverage under Title VII, the
ADA, and the ADEA.
3. EFFECTIVE DATE.
4. EXPIRATION DATE. As an exception to EEOC Order 205.001,
Appendix B, Attachment 4, § a(5), this Notice will remain in
effect until rescinded or superseded.
5. ORIGINATOR. Title VII/EPA Division, Office of Legal
Counsel
6. INSTRUCTIONS. File after § 605.8(b) of Volume II of the
Compliance Manual.
7. SUBJECT MATTER.
I. Introduction
The Supreme Court has held that the "ultimate touchstone" in
determining whether an employer has a sufficient number of
employees to satisfy the jurisdictional prerequisite for coverage
under Title VII of the Civil Rights Act of 1964, as amended, 42
U.S.C. § 2000e(b), is "whether an employer has employment
relationships with 15 or more individuals for each working day in
20 or more weeks during the year in question." Equal Employment
Opportunity Commission and Walters v. Metropolitan Educational
Enterprises, Inc., 117 S.Ct. 660, 666 (1997). The Court adopted
the EEOC's position that employees should be counted whether or
not they are actually performing work for or being paid by the
employer on any particular day.
In Metropolitan, the Court interpreted § 701(b) of Title VII,
which defines a covered employer as one who "has fifteen or more
employees for each working daily in each of twenty or more
calendar weeks in the current or preceding calendar year.@1 The
Commission has interpreted this provision to include employers
who have an employment relationship with 15 or more employees for
the relevant days, regardless of the daily work schedules of the
individual employees. See EEOC Policy Guidance No: N-915-052,
"Whether Part-time Employees Are Employees Within the Meaning of
§ 701(b) of Title VII and § 11(b) of the ADEA," April 20, 1990, 8
FEP Manual (BNA) 405:6857, EEOC Compliance Manual (CCH) & 2167
("part-time employees are counted whether they work part of each
day or part of each week").
The method the Court adopted is often called the "payroll method"
because "the employment relationship is most readily demonstrated
by the individual's appearance on the employer's payroll." Id. at
663-64. However, the Court stressed that "what is ultimately
critical is the existence of an employment relationship, not
appearance on the payroll."2 Id. at 666. The Court upheld the
EEOC's interpretation, reasoning that "an employer 'has' an
employee if he maintains an employment relationship with that
individual" on the day in question. Id. at 664 (emphasis added).
The Court rejected Metropolitan's interpretation that an employer
"has" an employee for a particular working day only when it is
actually compensating the employee for that day. Id. at 664.
The Court also disagreed with Metropolitan's argument that the
EEOC's interpretation rendered the statutory phrase "for each
working day" superfluous. Without the phrase, the Court said, it
would be unclear how to count an employee who departs in the
middle of a calendar week or an employee who departs after the
end of the workweek, but before the end of the calendar week. Id.
at 664-65. The Court held that "all one needs to know about a
given employee for a given year is whether the employee started
or ended employment during the year and, if so, when. He is
counted as an employee for each working day after arrival and
before departure." Id. at 665-66.
The Court noted Metropolitan's argument that the EEOC's
interpretation could produce some "strange consequences," such as
counting an employee who works irregularly only a few days a
month. Id. at 665. However, the Court observed that
Metropolitan's approach "produces unique peculiarities of its
own." Id. at 665. For example, by counting employees only on the
days that they are compensated, a half-time worker who works
every morning would be counted, while one who works on alternate
days would not. Id. at 665. Also, Metropolitan's approach "would
turn the coverage determination into an incredibly complex and
expensive factual inquiry." Id. at 665. "For an employer with
15 employees and a 5-day workweek, the number of daily working
histories [that would have to be examined] for [a] two year
period is 7,800." Id. at 665.
II. Charge Processing
The Supreme Court's decision accords with the longstanding
Commission position that all workers who have an ongoing
employment relationship with an employer are counted for purposes
of determining coverage.3 The phrase "for each working day"
means simply that an employee is counted as an employee for each
working day starting on the day that the employment relationship
begins and ending on the last day of the employment
relationship.4
There should be fewer disputes about the number of employees in
an employer's workforce because the Court has made the rules
clear and simple. The Commission will assume in the first
instance that all individuals who perform work for the Respondent
are employees. However, if a Respondent alleges that some
individuals are not employees and/or alleges that it has fewer
than the jurisdictional prerequisite of 15 employees for Title
VII and ADA coverage or 20 employees for ADEA coverage, it will
be necessary to obtain and evaluate additional information.
A. Information to Be Requested from Respondents Who Claim to
Fall Below the Jurisdictional Thresholds
Since the information needed will vary from case to case,
information requests should be tailored to address the disputed
facts. Typically, it will be most effective to focus on records
about those workers whose employment status or dates of
employment are in dispute. In other situations, it will be more
efficient to obtain records of all workers. The types of records
that should be sought will typically include:
1. Payroll records and employment contracts relating to
relevant workers for the year of and the year preceding the
alleged adverse employment action. Include contracts that
involve workers provided by temporary employment agencies,
contract firms, and other types of staffing firms. For example,
include maintenance workers and security personnel assigned by a
contract firm and temporary clerical personnel assigned by a
temporary employment agency.
2. Personnel, payroll and/or contract documents that reflect
the dates that the disputed workers began and/or ended their
employment relationship with the Respondent.
B. Determining Who Qualifies as an Employee
1. Evaluate whether the worker(s) whose status is disputed
are employees or are, instead, independent contractors or
otherwise not employees. To make this determination, consult
EEOC Enforcement Guidance No: N-915, "Title VII Coverage of
Independent Contractors and Independent Businesses," September 4,
1987; and EEOC Enforcement Guidance No: N-915.007, "Whether
Individuals Who Are Partners, Officers, Directors, or Major
Shareholders in Organizations May Be Considered Employees Under
Title VII, ADEA, and the EPA," July 14, 1987.
* Example: The Respondent is a publishing company with
fourteen employees. It has recently installed a new computer
system in its office. The Respondent contracted with an expert
computer technician (worker) to perform a myriad of duties
relating to the installation of, and training on, the new system.
The worker's contract will expire in six months. The Respondent
alleges that this worker is an independent contractor, and not an
employee. The Respondent does not supervise the worker or control
the details of how she performs her job. The worker is engaged in
a distinct occupation which requires special knowledge and
expertise. The contract, and thus the relationship with the
Respondent, will end at a specified time. The worker is not paid
by the hour, but paid to complete the specific job. In this case,
the worker would be found to be an independent contractor and not
counted as an employee.
2. Determine whether the employees have an employment
relationship with the Respondent. Some employees who perform
work for the Respondent may be employees of other businesses,
such as temporary employment agencies or contract firms, but may
also be employees of the Respondent. Consult EEOC Enforcement
Guidance No: N-915, "Concepts of Integrated Enterprise and Joint
Employer," May 6, 1987, and EEOC Enforcement Guidance No: N-917-
002, "Employment Agencies," September 20, 1991, 8 FEP Manual
(BNA) 405:6951 (Section I, C.). Such employees should be
included in Respondent's employee count.
* Example: A temporary employment agency hires, pays, and
assigns legal secretaries to the Respondent's law firm. The
Respondent supervises, establishes work schedules, and assigns
duties to the secretaries. If the Respondent is dissatisfied with
any secretary, it can require the agency to remove him/her. In
this case, the agency and the Respondent exercise sufficient
control over the secretaries to both be deemed their employer.
The secretaries are counted as employees of both the Respondent
and the agency.
C. Counting the Employees
The next step is to count the employees. The investigator should
do the following:
1. Determine the first and last day of the Respondent's
workweek.
* Example: The Respondent is a clothing store. The store is
open Monday through Saturday. Every day that the Respondent has
employees scheduled to work is a working day for the Respondent.
Accordingly, the Respondent's workweek is Monday through
Saturday.
2. If an employee began employment during either year in
question, that employee is counted as an employee for each
working day after arrival. For example, if an employee started
work on a Friday, that employee would be counted as an employee
on that Friday and thereafter.
3. If an employee ended employment during either year in
question, that employee is not counted as an employee after
his/her departure. For example, if an employee ends his/her
employment on Wednesday, (s)he is counted as an employee up to
and including Wednesday, but (s)he is not counted after
Wednesday.
* Example: If an employer's workweek is Monday through Friday
and during one of the weeks examined, it had fourteen employees
plus Employee A who ended his employment on Tuesday and Employee
B who started her employment on Wednesday of the same week, then
the employer has fifteen employees for each working day for that
workweek.
* Example: If an employer's workweek is Monday through Friday
and during one of the weeks examined, it had fourteen employees
plus Employee A who ended his employment on Tuesday and Employee
B who started her employment on Thursday of the same week, the
employer did not have fifteen employees for each working day of
that workweek because it only had employment relationships with
fourteen employees on Wednesday.
4. To determine the employee count for each week examined in
the relevant years: a) calculate the number of workers who were
on the payroll; b) subtract any workers who were on the payroll,
but were not employees; and 3) add any workers who were not on
the payroll, but who qualified as employees of the Respondent. Do
not count any week where the Respondent had employment
relationships with fewer than the jurisdictional prerequisite of
15 employees for Title VII and ADA coverage, or 20 employees for
ADEA coverage, for each working day of a particular week.
If the jurisdictional prerequisite is not met, determine whether
the Respondent is integrated with another employer. See EEOC
Policy Statement No: N-915, "Concepts of Integrated Enterprise
and Joint Employer," May 6, 1987, for a discussion of how to
determine whether the Respondent is integrated with another
employer. If the Respondent is integrated with one or more other
employers, determine whether the combined number of employees of
the integrated employers meets or exceeds the jurisdictional
prerequisite.
May 2, 1997 -S-
_____________ __________________________________
Date Gilbert F. Casellas
Chairman
1. The Court's analysis also applies to the Age
Discrimination in Employment Act of 1967 (ADEA) and the Americans
with Disabilities Act of 1990 (ADA), which have
similar statutory language. Section 101(5)(A) of the ADA, 42
U.S.C. § 12111(5)(A), defines an employer as one who "has fifteen
or more employees for each working day in each of twenty or more
calendar weeks in the current or preceding calendar year."
Section 11(b) of the ADEA, 29 U.S.C. 630(b), defines an employer
as one who "has twenty or more employees for each working day in
each of twenty or more calendar weeks in the current or preceding
calendar year."
2. The Court noted that an individual who was on the payroll,
but who was not an "employee" under traditional agency
principles, would not be counted. Id. at 666. The converse is
also true. An individual who has two joint employers would be
counted as an employee of both employers even though the employee
may be on the payroll of only one. See EEOC Enforcement Guidance
No: N-915, "Concepts of Integrated Enterprise and Joint
Employer," May 6, 1987.
3. EEOC Compliance Manual, § 605.8(b)(2), concerning the
counting of part-time and temporary employees, was clarified by
the Enforcement Guidance on Part-time Employees.
4. The phrase "in each of twenty or more calendar weeks in
the current or preceding calendar year" means that the employer
must have the requisite number of employees for twenty or more
calendar weeks in either the current or preceding calendar year.
The weeks need not be consecutive. EEOC Compliance Manual, Volume
II, § 605.8(b).