The U.S. Equal Employment Opportunity Commission

Transcript

PRESENT:

CARI M. DOMINGUEZ, Chair
NAOMI C. EARP, Vice Chair
LESLIE E. SILVERMAN, Commissioner
PAUL STEVEN MILLER, Commissioner
ERIC DREIBAND, General Counsel, EEOC

The entitled matter came on for hearing, pursuant to notice, at 1801 L Street, Northwest, Washington, D.C. 20507, and was called to order at 9:29 a.m., Cari M. Dominguez, Chair, presiding.

P R O C E E D I N G S

(9:29 a.m.)

CHAIR DOMINGUEZ: Okay. This meeting or hearing will now come to order. Good morning. On behalf of the U.S. Equal Employment Opportunity Commission, let me welcome each and every one of you to our Commission hearing this morning.

This hearing is being called pursuant to Section 709(c) of Title VII of the Civil Rights Act of 1964. This morning, we are going to hear statements from persons or group representatives wishing to comment on the proposed amendments to the Employer Information Report, otherwise known as the EEO-1 Form.

The proposed amendments were published in the Federal Register on June 11th, 2003. The notice of this public hearing was published in the Federal Register on September 30th, 2003. Let me briefly explain the procedures for this hearing.

A verbatim transcript will be made of today's proceedings. For that purpose, the hearing is being videotaped. We will then post a transcript on the EEOC website at www.eeoc.gov., and the speakers' written statements are being posted also on our website today.

As the presiding officer, I am responsible for regulating the course of this hearing, and shall dispose of all procedural matters. Each speaker has been allotted the same period of time, approximately 10 minutes, for his or her remarks.

Please respect the time allotments so that each speaker will have a fair opportunity to express his or her views. We do have a yellow light that will come on this timer to let you know that you have about 2 minutes remaining of your time.

All persons who have requested in writing an opportunity to be heard in accordance with the hearing notice are included in today's agenda. Copies of the agenda in the June 11th Federal Register notice have been provided on the table at the entrance of this room. I believe it is on this side of this entrance over here.

The speakers will be called in the order in which they appear on the agenda in four panels. After the speakers in each panel complete their remarks, I will recognize the members of the commission, who may ask any appropriate questions of the panel as regarding their statements.

While this hearing is open to the public, remarks and questions will not be taken from the audience. The record will remain open for 10 calendar days following this hearing for any additional written comments, including comments based on the statements that are made here today.

Additional comments may also be submitted in writing to the EEOC's Office of the Executive Secretariat, at the address given in the September 30th, 2003 Federal Register notice.

Finally, let me acknowledge that in the audience this morning we have representatives of a number of Federal agencies that have an interest in the subject matter, including OMB, the Office of Management and Budget, the Department of Labor, the Office of Federal Contract Compliance Programs; including the Office of Personnel Management, the Census Bureau, the Federal Communications Commission, and the Department of Justice.

I want to also acknowledge the presence of many other guests who are here, who fought the rain this morning and the bad traffic to join us this morning. So we are very, very pleased that you could join us and be with us this morning.

Let me also particularly recognize our colleagues from the Office of Federal Contract Compliance Programs, who together with EEOC, the Department of Justice, and the Office of Personnel Management, work very closely with the Commission.

They make up the Joint Review Committee, and they have worked very closely with us in the course of these 2 or 3 years in which we have been looking at the revisions to the EEO-1 Form.

And I am particularly pleased to welcome Mr. James Melvin, who is the Director of OFCCP's Division of Policy, Planning, and Program Development, who is going to be making an opening statement in a few moments on behalf of OFCCP. So, welcome.

Let me now recognize the Vice Chair and my fellow Commissioners for any opening remarks that they may wish to make. Madam Vice Chair.

VICE CHAIRPERSON EARP: I will reserve the time for questions.

CHAIR DOMINGUEZ: Okay. Commisioner Silverman.

COMMISSIONER SILVERMAN: Good morning, Chair Dominguez, and Vice Chair Earp, and Commissioner Miller. I join my colleagues in welcoming the panelists, as well as all of our guests.

In all probability everyone in this room is familiar with the development of EEO-1s over the last three decades. In the recent past a great deal of effort has gone towards further refining the reporting requirements so that they will be consistent with the OMB's 1997 standards.

From the conversations that I have had over the last year-and-a-half while I have been on the Commission, with various constituencies throughout the country, I think it is fair to say that there are many people out there who are patiently awaiting a final resolution of this issue.

And I am looking forward to hearing from you, the experts most familiar with EEO-1 data, its collection and its use. By sharing your perspectives on the proposed changes, and engaging in discussions that may follow during the question and answer session, you will help us at the Commission in making the most informed decisions concerning the final rule, a rule that once effective I hope will best help us achieve our mission of eradicating employment discrimination from our work places.

And I also wanted to take a moment to thank those members of our staff who have worked incredibly hard on finding a resolution to this important and often overwhelming issue.

I also want to commend Chair Dominguez for her leadership and I want to thank all of you for fighting the rain and coming here today.

CHAIR DOMINGUEZ: Thank you, Commissioner Silverman. Commissioner Miller.

COMMISSIONER MILLER: Thank you. I just want to welcome and extend my personal welcome to our guests here today, and I look forward to hearing from each of you. I have gone through our written testimony, and I think you have already made valuable contributions to the process, and I look forward to engaging in dialogue, and hearing your statements today. Thank you.

CHAIR DOMINGUEZ: Thank you, Commissioner Miller. Before we begin, just a housekeeping note. I have to leave around noon today, and so I have asked our Vice Chair to preside over the remaining parts of this hearing this morning.

So before we begin with the testimony, let me first welcome and invite Deidre Flippen, who is the Director of the EEOC's Office of Research, Information, and Planning. She will summarize the changes to the EEO-1 Form that the Commission published for comment in the June 11th, 2003 Federal Register Notice. Following Ms. Flippen, we will then hear from Mr. Melvin on behalf of OFCCP. Ms. Flippen, welcome.

MS. FLIPPEN: Good morning, Madam Chair, and Madam Vice Chair, and Commissioners. My name is Deidre Flippen and I am the Director of the Office of Research, Information, and Planning, at the Equal Employment Opportunity Commission.

Since 1966, the EEOC and the Department of Labor's Office of Federal Contract Compliance Programs, OFCCP, acting as the Joint Reporting Committee, have collected data on race, ethnicity, and gender, from private employers annually using the Employer Information Report, the EEO-1 Form.

The EEOC uses this information for civil rights enforcement, and to evaluate the employment status of women and minority workers in the private sector work place. The changes to the EEO-1 that are the subject of this hearing are the first comprehensive changes proposed since the EEO-1 was introduced in 1966.

These changes, which were published for comment in June 2003 after coordination with OFCCP and a vote by the Commission, are associated with government-wide revisions to the classification of Federal data about race, ethnicity, and jobs.

The EEO-1 revisions proposed in June 2003 concern ethnic and racial categories, and also job categories. I will summarize them as presented in the June 11th, 2003 Federal Register.

The changes proposed for collecting ethnic and racial data preparatory to completing the EEO-1 report are:

One, stating that self-identification by employees is the preferred method of identifying the race and ethnic information necessary for the EEO-1 report; and two, setting forth a two question format, with the first question asking employees about ethnicity.

And the second question asking employees about race. In answering the second question, employees may select one or more races. The changes proposed to the ethnic and racial categories are as follows:

One, the ethnic category, Hispanic, is renamed Hispanic or Latino. Two, the racial category, Black, is renamed Black or African American.

Three, the racial category, Asian or Pacific Islander, is separated into two racial categories; Native Hawaiian or Other Pacific Islander, and Asian.

Four, there is a new category, two or more races. The remaining racial categories remain unchanged.

The changes proposed to job categories on the EEO-1 are as follows:

One, the job category, Officials and Managers, is subdivided into three subsets to allow for a more detailed assessment of the utilization of minorities and women in these activities. The three subcategories are:

Executive/Senior Level Officials and Managers; Mid-Level Officials and Managers; and Lower-Level Officials and Managers.

Two, the proposal provides guidance on classifying jobs by using the 2000 Census Occupational Classification Codes.

Three, finally, the proposed EEO-1 renumbers the job categories for Craft Workers, Operatives, Laborers, and Service Workers. The EEOC received comments from 33 individuals and groups in response to the June 11th, 2003 Federal Register notice.

In response to the notice of public hearing, EEOC received the written testimony of the organizations and individuals appearing on the agenda today, as well as one written statement in lieu of testimony.

All of these comments, written and oral, will be considered as part of this hearing record, which will remain open for 10 calendar days. Finally, after any changes are made to the proposal as a result of the comments, there will be a second publication in the Federal Register, and an additional 30 days for reviewing comment. Thank you.

CHAIR DOMINGUEZ: Thank you very much, Ms. Flippen. We will now hear from Mr. Melvin, from OFCCP. Welcome.

MR. MELVIN: Good morning, Madam Chair, and Madam Vice Chair, and Commissioners. First, let me commend you, Madam Chair Dominguez, for the work that you are doing here at the Commission, and also the Commission for the work that you are doing with the difficult tasks that we are faced with.

I want to also thank you, Madam Chair, for your gracious invitation to us for us to give preliminary comments at the hearing here today. As a member of the Joint Reporting Committee, OFCCP has fully partnered with the EEOC during the process of developing the proposed changes to the EEO-1 report.

We will continue to work closely with the EEOC throughout this process. We have reviewed many of the comments that were submitted to the EEOC, particularly those with specific reference to OFCCP.

Many of the commenters expressed significant concern regarding Federal contractors' obligations under the authorities enforced by OFCCP, and we just want to take this opportunity at this hearing to state for the record that OFCCP intends to coordinate OFCCP obligations with the proposed EEO-1 changes to avoid duplicative and inconsistent burdens on the Federal contractor community.

We recognize that contractors will need significant advanced notice before future changes to OFCCP requirements become effective. You can rest assured those of you in the contractor community that OFCCP will provide a reasonable transition period before any future changes become effective. So, again, I thank you for the opportunity to speak this morning.

CHAIR DOMINGUEZ: Thank you, Mr. Melvin, for your comments and for your presence here this morning. Now we will proceed with the testimony and I am going to introduce the members of the panels individually throughout the morning.

At this time, let me invite our panel one speakers to please come up and take your seats.

MR. HENDERSON: Good morning, Madam Chair.

CHAIR DOMINGUEZ: Good morning. Our first speaker for panel one is Wade Henderson, who is the Executive Director for the Leadership Conference on Civil Rights. Mr. Henderson is a long time ally and colleague of the Commission, and who has been an active participant in many of these proceedings, and we welcome you here again, Mr. Henderson.

MR. HENDERSON: Thank you, Madam Chair, and good morning to the members of the Commission. Again, my name is Wade Henderson, and I am the Executive Director of the Leadership Conference on Civil Rights, a diverse coalition of more than 180 national organizations representing a broad constituency, including persons of color, women, children, labor unions, individuals with disabilities, older Americans, and major religious groups, and gays and lesbians.

On behalf of the Leadership Conference, I appreciate the opportunity to testify before the Commission regarding the proposed changes to Standard Form 100, or the EEO-1 report, which captures race, ethnicity, and gender information essential for effective civil rights enforcement.

The EEOC's mission and critical role in advancing equal employment opportunities through the enforcement of Title VII of the Civil Rights Act of 1964 is obviously one which the LCCR supports.

We are committed to ensuring that the Commission continues to receive the data that it needs to ensure compliance with civil rights laws so that all are treated equally in the work place.

As the Commission considers changing how race and job categorizations are reported with the new EEO-1 report, the LCCR would like to offer some perspectives on the proposed changes.

My oral testimony will necessarily be brief and I request that the Commission accept my full written statement as part of the record for these proceedings. And I also want to acknowledge the assistance of Michael Foreman of the Lawyers Committee for Civil Rights and the Law in the preparation of this statement and the assistance of many others. Thank you.

First, contrary to the views of some members of the employer community that the EEO-1 report serves little practical utility, we believe that this form continues to serve not only an enforcement purpose, but also provides valuable historical perspective.

Stated simply, how can we measure our progress if we do not know where we have been. Moreover, the data collected through the EEO-1 report are essential to the meaningful enforcement of our nation's laws prohibiting employment discrimination.

As you are well aware, the EEOC, the Department of Labor, and the courts, rely on EEO-1 as a primary source of information with which to determine compliance with Federal civil rights laws.

As important, the ability of private individuals to effectively bring charges against employers, and to prove before the EEOC and the courts that unlawful discrimination exists, depends upon the EEO-1 as a source of information regarding the representation of women and minorities in the work place.

The LCCR supports the refinement of the officials and managers category. Currently, there is only one category for officials and managers, who range from chief executive officers to branch managers.

The proposed changes to this category will increase the accuracy of the distribution of minorities and women in the various management levels. The expansion of the officials and managers category will also allow the Commission to better track disparities in the upper levels and should offer even greater clarity as to the existence of a glass ceiling.

Finally, the proposed refinement will assist private plaintiffs who in the past were denied class certifications because the lack of refined data could not support a determination of those to whom class representatives were similarly situated.

The LCCR also has no opposition to the creation of a Native Hawaiian or Other Pacific Islander as its own racial category. The proposed EEO-1 would follow the Office of Management and Budgets' decision to revise the Statistical Policy Directive Number 15, race and ethnic standards, for Federal statistics and administrative reporting.

This separation of Pacific Islanders and the Asian racial category should provide a more accurate record of the presence of both racial groups in the American work place.

In addition, the OMB has changed the term Hispanic to Hispanic or Latino. We refer you to the testimony submitted by the Mexican-American Legal Defense and Education Fund regarding this aspect of the EEO-1 report.

Finally, it is our understanding that the proposed changes to the EEO-1 report indicate that self-identification is the preferred method for acquiring racial and ethnic information from employees.

It is not unless self-identification is not feasible that post-employment or observer identification may be used. The LCCR finds the accurate reporting and capturing of race and ethnicity data are essential components to the civil rights in the work place.

In conclusion, for over 50 years the work of the LCCR has reflected a longstanding and unwavering commitment to ensuring equal employment opportunity and affirming equal justice principles.

Our support for the work of the Commission, its mission, and its role in civil rights enforcement, is rooted firmly in this commitment. We understand the concern to have current racial classifications on the EEO-1 report and to implement changes that promote the interests of employees without overburdening employers.

We support these changes and believe that accurate racial data, especially as they relate to management positions, will promote diversity and equal opportunity in employment. However, we also believe that any changes in the EEO report must enhance the vital enforcement function of the Commission.

Thank you for this opportunity to participate in today's hearing, and we look forward to working with you on these critical issues. Thank you.

CHAIR DOMINGUEZ: Thank you very much, Mr. Henderson, for your presence and your remarks. Before we open it up for questions, let us now invite Kris Meade, who is our second speaker for panel one, and is here.

He is of Crowell & Moring, a law firm, but he is also here representing the U.S. Chamber of Commerce. Welcome, Mr. Meade.

MR. MEADE: Thank you. Madam Chair, and Madam Vice Chair, and Commissioner Silverman, and Commissioner Miller, and colleagues, I am Kris Meade with the law firm of Crowell & Morning here in town, and I am appearing today on behalf of the United States Chamber of Commerce to discuss the impact of the proposed changes to the EEO-1 reporting scheme, and the impact of those changes on our nation's employers.

The Chamber is the world's largest business federation, representing more than 3 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, and on behalf of the Chamber, I would like to thank you for the opportunity this morning to address the agency on the important issue that impacts so many employers, 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, and I have organized my comments into two subject areas.

First, the proposed changes to the reporting of data on race and ethnicity; and, number two, 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 EEOC's proposed race and ethnicity categories.

We recognize that the agency was faced with a difficult task in redefining the race and ethnicity categories to square with the 2000 census data, and prior directives of OMB.

We believe that the two or more races category is a reasonable means for addressing the difficult issue of racial identification, as many employees 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 conceivable race combination appropriately limits the new data collection and the reporting burden on employers.

The Chamber's endorsement of this approach is conditional. Our support is conditioned on the presumption that the EEOC has the support of other enforcement agencies, most particularly the Office of Federal Contract Compliance Programs, and the OFCCP will adopt a consistent position regarding the data collection and analysis requirements for government contractors.

To that end, the Chamber was certainly heartened to hear Mr. Melvin's comments this morning pledging that the OFCCP would adopt a consistent approach. Moving beyond the categories themselves, I would like to briefly discuss the way that race and ethnicity data will be collected.

The agency has proposed a two question format that singles out Hispanic and Latino employees for individual treatment. Many Chamber members have expressed confusion about why ethnicity is addressed as a separate question, and why Hispanic or Latino is the only ethnic category identified.

The front line human resources personnel often do not know how to respond to employees' questions about this proposed distinction between race and ethnicity.

The Chamber encourages the EEOC to provide detailed background guidance, and to the extent that the EEOC believes that a two question format is required by Federal legislation that mandates separate tracking of Hispanic and Latino individuals, we suggest that the EEOC identify this rationale in the statutory authority underlying this decision.

The Chamber has several other concerns regarding the suggested questionnaire, all of which are outlined in detail in the comments that we have previously submitted.

Our two primary concerns are, number one, that the questionnaire discourages employees from providing both race and ethnicity information, and number two, the questionnaire does not clearly state that an employee's response is voluntary.

Our written comments propose changes that would remedy what we perceive as those two deficiencies. I would like to now move on to the second topic, which is the proposed changes to the EEO-1 job categories themselves.

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 to us is the proposal to divide the officials and managers job category into three separate categories.

Input that we receive from multiple Chamber organizations, both large and small, indicates that the three-tiered officials and managers job category is an unworkable format 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, and reporting to him or her are several senior vice presidents. We then have multiple vice presidents who report either to a senior VP or to the president himself or herself.

One of these vice presidents is also the chief financial officer, and 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 CFOs 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 this employer, this hypothetical employer, draw lines among its other top management positions? Moreover, there is a question 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.

HR managers and marketing managers are classified as mid-level, while purchasing managers and customer service managers are classified as lower level. Some managers, such as managers of gaming workers and managers of landscaping, and lawn service, and groundskeeping workers, are not classified as managers or officials at all.

Employers will have a difficult time properly categorizing their managers based on these guidelines. Different employers will undoubtedly reach different conclusions, and the consistency that this 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. That is the only way for the EEOC to identify trends, understand industry practices, and determine whether 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. Should the EEOC nonetheless decide to divide officials and managers into more than one category, the Chamber recommends that it divide the category into only two subcategories, 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, the second category, would be used to classify the managerial work force that implements the policies established by senior management.

This would include both front line supervisors and mid-level managers who are responsible for day to day management and implementation of company policy, rather than actual policy development.

We believe that this straightforward distinction between those who set policies, and those who manage the implementation of policies, accommodates the EEOC's desire to create subcategories, and also provides a clearer, more realistic division of the management rank.

The other job classification issue that I would like to discuss is the agency's renumbering of the job categories, for which no rationale has been articulated in the public notice. While this change may seem insignificant, numerous Chamber members expressed concern about this proposal, because it will be burdensome, and it will create an unnecessary implementation cost, and it will generate confusion, and simply won't provide any benefit.

Multiple Chamber members report that they code 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 here, which are often operating with limited resources and rudimentary HRIS systems at best. I would also note that many HR managers and professionals think and speak in terms of the current EEO-1 job category codes rather than the names.

Changing a numbering system that has been used for decades would result in considerable confusion for them in both communication and conceptualization. The agency has not articulated a reason for this numbering change. We cannot identify a rationale for changing a structure that is firmly embedded in both the consciousness and the computer systems of countless employers.

We strongly encourage the agency to maintain the current numbering scheme. The final comment that I would like to make concerns the implementation of the proposed changes. Here 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 work force for race and ethnicity data. Each may also be required to recategorize its officials and managers into multiple levels, and will have to reconfigure HRIS systems to accommodate those data changes.

The technological changes and the necessary training of HR and recruiting personnel is simply going to take considerable time. Further, assuming as Mr. Melvin pointed out today that 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 and ethnicity categories.

It would be impossible for them to switch practices mid-stream or in the middle of their affirmative action plan years. The Chamber strongly encourages the agency to give employers ample time for this transition, and recommends that the proposed changes become effective no sooner than January of 2005.

Thank you again for the opportunity to share the views of the Chamber of Commerce.

CHAIR DOMINGUEZ: Thank you very much, Mr. Meade. I appreciate your remarks. Let us now proceed with questions. Madam Vice Chair.

VICE CHAIRPERSON EARP: Thank you. Mr. Meade, setting aside small employers for large companies, the Chamber's position that the Commission should probably leave the job categories of managers and officials as it is currently, or in two levels, if we set aside small companies, how would you propose with large corporations we address our concerns regarding glass ceiling, or some of the other issues that Mr. Henderson raised in terms of tracking progress for managers and managers at upper levels?

MR. MEADE: I think the proposal that we have identified as our secondary position, which would permit the establishment of two different categories, sort of a senior officials category and a lower category, would certainly permit both the agency and the OFCCP to gather data that would assist in glass ceiling analyses.

That is certainly possible. And the OFCCP of course currently looks at glass ceiling issues in the context of the audits that it conducts and it is able to do that notwithstanding the fact that we currently have a single officials and managers category.

And they proceed by looking at the top 3 or 4 levels of reporting directly to the CEO or the president of the corporation.

VICE CHAIRPERSON EARP: One follow-up. In a large hypothetical food service company, very large, but service, where would the manager of cafeteria services fall in the scheme that you suggest with two tiers?

MR. MEADE: Well, without knowing what the job duties may be, the title indicates to me that this is somebody who would be implementing policy rather than setting policy. So under the Chamber's proposal, alternative proposal, this person would fall in the second group, the lower group.

VICE CHAIRPERSON EARP: Thank you.

MR. MEADE: Sure.

CHAIR DOMINGUEZ: Commissioner Silverman.

COMMISSIONER SILVERMAN: Do you think that we, the Commission, should be providing more guidance on any aspect of our proposal that would help employers implement it more easily and effectively, and if so, what would you recommend with ours?

MR. MEADE: The piece of guidance that I think would be most helpful to employers generally, large and small, is guidance on dealing with the sensitive issues of racial and ethnic identification.

Why it is that the format that has ben proposed by the EEOC is the best format from the government's perspective, and how it is that front line HR personnel will be able to deal with the inevitable questions that come up and have come up using the categories.

I certainly have heard in my practice from front line HR managers that they really struggle explaining to employees why it is that they are asking questions about race and ethnicity, and I think the suggested questionnaire that has been proposed by the agency does not go quite far enough in explaining to the employee as the employee is providing this information why it is that the employer is gathering that information.

So I think that it is really a two-fold piece of guidance. The first is really to HR managers and dealing generally with questions on these sensitive subjects. And the other is beefing up the suggested questionnaire so that employees can gain a better understanding as to why it is that the Federal Government is obtaining this data through employers.

COMMISSIONER SILVERMAN: Thank you.

CHAIR DOMINGUEZ: Commissioner Miller.

COMMISSIONER MILLER: Thank you. Going back to your first point, Mr. Meade. And, first, thank you, both of you, for your comments. They are very useful and very helpful through this process.

I want to go to Mr. Meade's first point about Hispanic information. Hispanic information has been characterized as ethnicity for quite some time in the government, and I believe going back to the Nixon Administration.

And Hispanic classification is not a race. In fact, there are multiple races that may be identified, self-identified, as Hispanics. So I am trying to understand sort of the Chamber's position on this. Would you suggest -- and I guess also assuming that we can sort of figure out the technical assistance of how to sort that through the information about the questioning.

Would you suggest that we no longer sort of track information about Hispanics or Latinos, and that we drop that, or that we characterize that now as a race, as opposed to ethnicity?

MR. MEADE: No, I would answer no to both of those questions. We certainly -- the Chamber recognizes that this is an ethnicity category that does exist and has existed.

The issue I think again is in communicating to employees why it is that this exists as a separate ethnicity category, and in particular on the suggested questionnaire format why it is that you are telling Hispanic and Latino employees that their race will not be reported if they mark Hispanic or Latino.

COMMISSIONER MILLER: Okay. Thank you.

CHAIR DOMINGUEZ: Thank you, Commissioner Miller. Mr. Henderson, one of the -- and I appreciate your comments on the historical value. When we look back to 1966 when the form was first established -- and I want to note that the former executive director of the EEOC, Al Golub, who is here with us, and I understand that it was under his watch that this form was established many, many years ago.

I don't think that there was an issue about the participation of women and minorities in the officials and managers category back in 1966.

MR. HENDERSON: That's right.

CHAIR DOMINGUEZ: I think that was a very safe bet to come up with such a broad category. However, we have come a long way since those days, and we are now looking at the challenge that both OFCCP and the Commission face when you have the head of an administrative pool, typing pool, administrative pool, lumped in with the chairman of the board.

One of the concerns in order to get some of these positions made, has been timing. Would the Leadership Conference support a delay in getting the provisions put in place in 2005? Would you envision that?

MR. HENDERSON: Well, Madam Chair, first, I think it is important to acknowledge as you have done the evolutionary progress that indeed we have made in our country in combating discrimination from the inception of this documentary process in 1966 until today.

Our country has made extraordinary progress and yet we all acknowledge that discrimination is a current, present and ongoing problem for far to many persons who are otherwise authorized to work here in the United States.

I think that in order to address this issue as we have done over the past many years, I think it has been through a combination of effective legislation from Congress mandating certain protections be implemented, and the vigorous enforcement of agencies like the EEOC, and the role of Attorneys General in seeking to enforce existing statutes where private rights of action have been made available.

I think the key to all of this has been the availability of data. Data collection is absolutely essential as a point of determining where we are at any given point in this process, and I think for that reason that I am reluctant to suggest a time delay for the implementation of this new program, unless there is a rationale for doing so.

And I think there has to be first a demonstration by those who would seek the delay that a delay is merely intended for purposes of more effective implementation, rather than to obfuscate the need for this important and critical information.

Secondly, I support the concept that Mr. Meade alluded to by virtue of his response to a couple of questions, which is transparency of information.

We have long believed that it is necessary, of course, that all who would be subject to the requirements of the Federal government in this important area of our work know fully well what is expected of them, and what is required, and the steps that the Federal government will take to evaluate compliance with this regime.

And I think that providing information to employers and employees alike to the extent necessary to facilitate their understanding is something that clearly we would support.

I think the question of implementation and time delays, however, is really tied to specific objections, and let there first be a demonstration that the time frame that you have set forth, which I think is on the face reasonable and generous.

It does not facilitate obfuscating -- you know, collecting this data, or provide some otherwise illegitimate purpose to be carried out. Thanks.

CHAIR DOMINGUEZ: Thank you. Thank you very much, Mr. Henderson.

VICE CHAIR EARP: I have one follow-up question.

CHAIR DOMINGUEZ: Yes, go ahead.

VICE CHAIR EARP: I have one follow-up. Mr. Henderson, how would you respond to the Chamber's comment that we were able to identify glass ceiling issues with the single category, and often without the kind of support that we, the OFCCP and the Commission, may have wanted?

MR. HENDERSON: Well, Vice Chair Earp, I think that your line of questions at the outset with Mr. Meade were very perspective. I mean, I do think that the data as now called for under the EEOC's proposal is actually to a proposal intended to produce a more refined measure of data than was previously available.

I mean, I think over the years since the glass ceiling problem has been identified and acknowledged as a real issue, an issue that went beyond the anecdotal information in the early days of this problem, helped to characterize its existence, and we now have real data which says that limitations on gender, and opportunities to rise still on race and ethnicity within the work place are too real.

I just think that this refined data is necessary to pursue the more vigorous case that I think is expected under the proposal that the EEOC has put forth. So I think that the one category characterization that currently exists is no longer sufficient for purposes of meeting the need for a more refined set of data than is currently available.

VICE CHAIR EARP: Thank you.

CHAIR DOMINGUEZ: Thank you very much, Mr. Henderson and Mr. Meade. We appreciate your remarks.

MR. HENDERSON: Thank you, Madam Chair.

MR. MEADE: Thank you, Madam Chair.

CHAIR DOMINGUEZ: Let me now invite our panel two speakers to please come up and take your seats.

Our first speaker for panel two is Marisa J. Demeo, who is the regional counsel for the Mexican American Legal Defense and Educational Fund, better known as MALDEF. Welcome, Ms. Demeo.

MS. DEMEO: Thank you, and good morning. First, I want to thank the Chair, the Vice Chair, and the Commissioners for inviting MALDEF to present today on the proposed changes to the EEO-1 Form.

By way of background for those who are not familiar with MALDEF, we are a national civil rights organization dedicated to the protection and advancement of the civil rights of the Latino community here in the United States.

In my written testimony, I do provide a review of the history of the Federal government's classification of racial and ethnic data since 1977, and the decisions that the Federal government has reached on how to aggregate racial and ethnic data in light of the changes to the collection standards issued in 1997.

In order to save time, I will spend most of my time here today just discussing MALDEF's recommendations regarding the collection of the use of racial and ethnic data by the EEOC as it relates to the EEO-1 collected data, and I will also present briefly MALDEF's recommendation in the collection of the job category data.

The first recommendation MALDEF presents is that the instruction booklet section on race/ethnic identification, and that is Section 4, should make it clear that the employer should only determine the race or ethnicity of an employee if the employee declines to self-report.

Currently the draft instruction booklet section on race and ethnicity follows OMB guidance when it states that self-identification is the preferred method of identifying the racial and ethnic information to fill out the EEO-1 report.

It diverges, however, from OMB guidance that where self-identification is "not feasible," the employer can gain the information from post-employment records or observer identification.

The instruction booklet should make it clear that an employee should be given the option to fill out a form self-identifying his or her race, and whether or not he or she is Hispanic.

Only if the employee declines should the identification fall to the employer. Employers could interpret the term "not feasible" too broadly, and not provide employees the opportunity to self-identify. Clear instructions are warranted to ensure compliance with OMB's consistent guidance on this matter.

The written testimony that I have read of ORC worldwide, Mr. Northup, and Society for Human Resource Management, all appear to be consistent with this recommendation by either acknowledging that new employees have to self-identify, or specifically stating that self-identification is the best method to collect race data.

The EEAC's written testimony is quite different, asking that the employer be able to identify an employee's race and ethnicity not just when he or she does not want to self-identify, but also when the employer believes that it would be unduly burdensome or not practical, or feasible.

OMB was quite clear on this matter on what it requires for the collection of racial and ethnic data. OMB only allows the employer to determine the race and ethnicity of an employee if the employee declines to self-report.

Recommendation Number 2. Employers should report both the race and ethnicity of all their employees. In the 1990s the OMB specifically considered whether to make Hispanics a racial category.

This was conducted over a number of years and consulting with dozens of agencies throughout the Federal Government and consulting with the public as well, and collecting research on this issue. They rejected that proposal.

As a result, OMB retained the two question format, asking race separately from whether a person was Hispanic or not. In order to be in compliance with OMB directives, the EEOC must provide as much detailed information on race and ethnicity as possible, and where the two question format is used, the EEOC must report the number of respondents in each racial category who are Hispanic or Latino.

This makes sense from a civil rights enforcement perspective. As both OMB and the Census Bureau have pointed out, a person who is Hispanic or Latino can be of any race.

A Latino worker can be discriminated against because of his or her ethnicity, and/or because of his or her race. For example, an employer can discriminate against an Afro-Latino because he or she is prejudiced against Latinos; or because he or she is prejudiced against Blacks, or even because he or she is prejudiced against Afro-Latinos.

As I read the U.S. Chamber of Commerce, Rainbow PUSH Coalition, or ORC Worldwide's written testimony, their responses are consistent with our recommendation. The Chamber expressed concern that the format of the questionnaire discourages employees from providing both race and ethnicity.

Rainbow PUSH objects to the reporting of ethnicity only. Our positions, while not expressed exactly the same way, reach the same conclusion. That race and ethnicity should be reported by employers of all employees.

ORC Worldwide expressed the concern that not allowing Hispanics to report themselves as multi-racial is problematic, a position we believe is consistent with our recommendation.

Recommendation Number 3. If an employee reports he or she is a member of more than one race, both races should be reported by the employer. The employer should not report the employee as a member of a "two or more" race category.

When OMB conducted its review of the collection of racial and ethnical data for Federal statistical and law enforcement purposes, it specifically rejected the proposal to have a "multi-racial category."

Further, the OMB guidance on aggregation of data on race for use in civil rights monitoring and enforcement is clear. In order to accommodate the possibility of having to deal with too many racial classifications and combinations, OMB provided a clear framework for deciding which categories to collect information on.

The EEOC is required to allow employees to choose among five single race categories, the four most common racial combinations, and additional combinations if it is determined appropriate, and a residual racial combination category.

Reporting in this manner allows the EEOC to comply with OMB's guidance on allocation of data on race for civil rights monitoring and enforcement, which I will discuss more in recommendation number four.

It is unlikely that the EEOC could monitor or enforce the employment anti-discrimination statutes it is charged with enforcing for employees who are lumped together into a two or more race category as currently proposed in the EEO-1 Form.

A person who is a combination of White and Asian could be perceived very differently in the work place than a person who is White and Black, or African-American. In our current society, it is unlikely that they will be perceived to look the same, or that assumptions made about them based on how they look will be the same.

Rather, it is likely that a person who is mixed-White and Asian will be identifiable as either Asian or part-Asian; while a person who is mixed White and Black, or African-American, will be identifiable as either Black or part-Black.

If an employer has prejudices against Asians, but not Blacks, these two employees will be facing a very different work place environment, despite the fact that they both fall into a "two or more" race category.

For these reasons employers should be required to report on the EEO-1 Form both races of employees, at least for the most common racial categories combinations, and not lump them into a two or more race category.

Both the Chamber and the EEAC's written testimony support the use of the two or more race category. In particular, the EEAC highlights the problems of employers having to possibly collect data on 62 racial categories, and the dilemma that employers might face in the position of assigning or allocating employees into certain racial categories.

OMB contemplated all these scenarios when it led an interagency group to review the specific needs of civil rights enforcement agencies. First, OMB limited the number of racial groups that employers would need to report by limiting the racial groups to the five single race groups and the four most common two race groups.

This leaves once you combine all the different possibilities a total of 10 possible racial boxes and one separate Hispanic box, far less than the 62 categories contemplated by the employers.

Also, by using the racial categories in the OMB guidance, employers do not have to assign or allocate an employee's racial identities. OMB instructs the EEO agencies to perform the allocation. Employers are not put in this position.

Recommendation Number 4. If an employee reports that he or she is both a minority race and white, then the employer should report the employee as a member of the particular minority race identified and why; and then upon receiving that data, the EEOC should allocate that individual to a group.

This is really less about what needs to be inside the EEO-1 Form and the instructions to the employers and employees, but more about the EEOC making sure that it collects the data that it needs in order to do civil rights enforcement.

Ultimately, it is the EEOC's responsibility to do the allocation that is directed by OMB. This is more fully explained in my written testimony. Finally, I want to touch on the collection of job category data just to be on the record.

MALDEF applauds the agency's efforts to subdivide the current officials and managers category into three distinct subcategories. We wish to endorse the LCCR comments submitted to the Commission in this subject area.

What I do want to turn the Commissioner's attention to is that we do raise a new and novel issue separate from what was contained in the proposal in the Federal Register, as well as what was contained in other written comments submitted to the EEOC, and that is a concern from the Latino community that the service workers job category needs to be further subdivided.

In the testimony that I have submitted for the record, you will find evidence that shows that Latinos are often segregated within the service sector into certain jobs that pay less and not given the service sector jobs that pay more.

And by subdividing out that category, we believe that the EEOC can better track and enforce civil rights laws in the service worker category. Thank you very much.

CHAIR DOMINGUEZ: Thank you very much, Ms. Demeo. Our second speaker for panel two is Jeffrey Norris, who is the president of the Equal Employment Advisory Council. Welcome, Mr. Norris.

MR. NORRIS: Chair Dominguez, Vice Chair Earp, Commissioners, General Counsel Dreiband, it is indeed a pleasure for me to appear before you once again on behalf of the more than 330 members of the Equal Employment Advisory Council, this time regarding the proposed changes to the EEO-1 Form.

And before I get into my substantive comments, I would just like to say a few words by way of background. First, I would like to compliment the Commission on the very careful and deliberate way in which it has proceeded to develop the proposal that we are talking about today.

As you know, and as we know, the EEO-1 Form is arguably the most important tool for monitoring and enforcing compliance with our nation's non-discrimination laws.

We all know that we are here today not simply to discuss a few changes in the rows and columns of a single annual reporting requirement, but rather we are considering changes which could fundamentally alter the ways in which important work force demographic data are collected and used to further the causes of non-discrimination, affirmative action, and diversity.

And we also are conscious of the fact that this exercise today is not being conducted in a vacuum. That it is being conducted against a backdrop of proposals that are government-wide to standardize the way in which employment related information, including information on race, ethnicity, and job categories, is collected, analyzed, and reported by the Federal government.

Consistency in matters such as this generally are to be commended, but I would caution you about what Emerson said about a foolish consistency, and that it is the hobgoblin of little minds. And what I think we all are striving for today is how can we be consistent within the bounds of common sense.

And it is with that objective in mind that I would like to focus my remarks on three areas. First, why we believe that the EEOC should move forward with the implementation of a uniform seven category classification system for collecting, maintaining, analyzing, and reporting race and ethnicity information, and why we believe the EEOC should not move forward with the proposals regarding the changes to the job category classification system.

And I would like to conclude with a few practical suggestions as to how the Commission can facilitate the move from the current EEO-1 reporting requirements to the new.

First, why EEOC should proceed with implementing a seven category classification system. Here again we recognize that we are not operating in a vacuum, and that under the 1997 OMB standards the Commission basically was given two alternative reporting formats; the combined format, which with one exception would perpetuate the reporting categories that we have lived with for 30 years, and the two question format, the preferred format, which would provide for the separate reporting of ethnicity and allowing individuals to report themselves in one of multiple racial combinations in possible race and ethnic categories that we would need to deal with, a 10-fold increase from where we are today.

In our view these 62 categories are not necessary, and in fact they are with respect to employment monitoring counterproductive. Undoubtedly, these detailed data have value in some government contexts, scientific contexts, such as medical research, for example.

But not in a social context of civil rights enforcement. In fact, the more precise and detailed the categories for collecting and maintaining the data, the smaller the reported populations in those categories become, and the less useful they are for purposes of -- for the main purpose for the data in the first place, which is non-discrimination monitoring.

So we believe that the Commission wisely embraced a seven category format; one for ethnicity, five for single-race categories; and a single category for two or more races.

And we believe that this strikes the best possible balance between the combined format and the two question format set out in the OMB guidelines. These seven categories are large enough to generate useful statistical demographic data.

They can easily be used for purposes of historic tracking, and they can be reconciled with 2000 census data, and they accomplish two major objectives sought by the OMB's revised standards, allowing individuals to indicate that they belong to more than one race, and distinguishing Native Hawaiian and other Pacific Islanders.

So we recommend that you proceed with this seven category classification. Having said that, we were somewhat surprised at the suggested employee questionnaire, because it seems to suggest that employers are encouraged to solicit data not in the seven categories in which it should be reported, but rather in the 62 categories that would be authorized under the two question format.

This to us does not make a lot of sense to require companies to expend resources and time to accommodate 62 categories, only then to have to turn around and aggregate them back up to seven for reporting purposes.

And in correspondence with the Commission we have been informed that the Commission does not intend by these proposals to change the reporting requirements to require the companies collect information that it is not required to report.

So with that insurance in mind, we did prepare an other suggested employee questionnaire that we suggest employers be allowed to us, which would -- and they can be reconciled with 2000 census data and -- to be true.

We believe that the most efficient way to gather this data is to ask employees which of the seven categories do they choose or they most closely affiliate with, and then that is the information that the employer is required to collect and required to report on the EEO-1 Form.

And we also suggest that the seven categories be used for all aspects of the data management process. That is, collection, analysis, monitoring, and reporting.

Collect in seven, and report in seven, and allow the employees to make their determination as to which category they affiliate with. That to us is the best possible result.

I would like to just take a moment to address the concerns that my colleague on the panel has made about the fact that individuals can be subject to discrimination with multiple races. That indeed is true, but I would remind the Commission that nothing that is being discussed today alters the substantive rights that individuals have to be free of discrimination on any basis.

We are changing a reporting requirement, and we are not changing the complaint form. And any individual who believes that they are multi-racial can identify on that complaint form the basis upon which they believe they have been discriminated against, and anything that they might indicate in a self-identification form, or any way that they might be reported on the EEO-1 would not alter that right.

Second, why should EEOC not move forward with respect to the proposed revisions to the EEO-1 job classification system. I think this issue already has been well addressed by the Chamber. I will not go over those issues again.

I will simply say, however, that it seems to us that there are two things here. One is the stratification of the officials and managers, and one is the proposal to in essence correlate the census occupational classification categories to the EEO-1 categories, and we feel that that is not an appropriate analysis, because the occupational classifications are skills-based and not level-based.

And what you are attempting to do in the EEO-1 Form is identify people by level, and not by skills. So we think the hard link to the recommended categories is inappropriate, and we think that it is also going to result in a perception of precision which simply will not be there.

The difficulty of differentiating between the three stratification levels has already been articulated, and the difficulty of using the EEOC codes for assignment has been articulated.

And we think that the result is going to be is that there will be an element of precision to the data that simply is not there, because it is not going to provide the uniform consistent baseline information that you are looking for.

Finally, a couple of recommendations as to what steps we believe the Commission could take to facilitate transition to the new form. First, since self-identification is going to replace employer visual observation as the preferred method of collecting information on race and ethnicity, employees are going to have questions about differentiating between their race and their ethnicity.

The pretest, the 2000 pretest that the Census Bureau conducted earlier this year, and we that we have given you in prior correspondence a report on that, suggests that with respect to Hispanics that they had a very difficult time addressing the questions that were posed in that pretest, questions which are very similar to the suggested employee questionnaire in the Commission's proposal.

And, number two, while you are looking at the EEO-1 Form, also take a look at the instruction booklet. There are a couple of areas where that needs to be clarified. First, the definition of employee in the attachment, individuals who are not required to be reported on the EEO-1 Form needs clarification.

And also the employers no longer are organizing their work forces and managing their work forces by addresses and establishments. So while you are at it, take a look at the definition of establishment to determine how employers should be dealing with situations where employees work from home.

And also look at situations where a single location may in fact encompass more than one establishment, and also where there may be situations in which there may be multiple locations for a single establishment.

And finally please do take time to give employers the opportunity to reconfigure all of their systems. We recommend that the report on the revised form not be required until the 2005 reporting cycle. That would do two things.

It would give employers an opportunity to reconfigure their HRIS systems, and equally important it would give the Commission an opportunity to coordinate pursuant to its coordinating authority with other agencies, and not simply the Department of Labor, but with a wide variety of other agencies that have reporting requirements pertaining to race and ethnicity of employees. Thank you very much.

CHAIR DOMINGUEZ: Thank you, Mr. Norris. Madam Vice Chair.

VICE CHAIRPERSON EARP: Mr. Norris, so that I can better understand, would you give an example of why employers believe that the hard link does not exist, an example of the disconnect that is perceived between the skills-based collection of data, and how we collect it based on skills, and where employers see the hard link not existing between skills and the categories.

MR. NORRIS: Well, I think the written testimony that we have supplied, as well as the written testimony of some of the other panelists, given specific examples of situations where specific codes don't match up.

An example that I think rings true for many of us is that HR managers will always be designated according to the EEOC's mid-level position, and never in the senior level position, where that is not true for other positions of comparable stature within the companies.

And the problem is that different skills are valued differently for different corporations, and in some corporations a particular skill will have a very high value, and an individual with that skill will occupy a very high position in the organization, and that same skill level for another company may not be as valued, and that individual may not occupy as high a level within the organization.

So are you suggesting that a company that calls the position vice president for human resources, and another company that calls it human resources manager, that we would not collect that data in the same stratified level for officers and managers?

MR. NORRIS: You might not. You might not depending upon what the specific requirements of being -- the vice president of human resources, I believe, is specifically designated as being in the senior category.

VICE CHAIRPERSON EARP: Right.

MR. NORRIS: But there are some, many, most other HR positions are designated as being in the middle-management category, where in many corporations that simply is not the case.

The HR people do very much make policy and don't implement policies made by others.

VICE CHAIRPERSON EARP: Thank you.

CHAIR DOMINGUEZ: Commissioner Silverman.

COMMISSIONER SILVERMAN: Ms. Demeo, your fourth recommendation favors identifying race and ethnicity by allocation, allocating persons who identify themselves both as white and a particular minority group.

What would happen and how would we allocate persons who identified themselves with two minority groups?

MS. DEMEO: That is a discussion that had begun back when OMB was struggling with this issue, and we met with both employers and civil rights folks to try to work on that issue.

And I think that OMB has set forth some questions that still need to be resolved in that area, but what is clear from OMB's guidance is how to handle the situation of someone of a minority and a white racial combination.

But I think that question still is something that needs to be resolved if you did follow the OMB's guidance, which suggests that you use the top four racial combinations. Actually, 3 of the top 4 are combinations of minorities and whites.

So the question would not really come up in 3 out of 4. And the fourth category would be the combination of African-American and American Indian, and I think there would have to be a discussion within the Federal agencies, also with civil rights organizations, and particularly from constituents from the African-American and American Indian groups, as to how to handle that particular case.

COMMISSIONER SILVERMAN: Thank you. And how do you respond to Mr. Norris' comments that ultimately how we collect the information does not matter because when the individual comes in to file a complaint, they decide which boxes to check?

MS. DEMEO: I agree that the form itself doesn't change, and so if an individual were to come forward that would not be affected. However, I will say that when you look at statistics historically, and specifically of the Latino community, you have a severe under-reporting of employment discrimination.

When you have testing that is done out in the field, they show that Latinos are actually discriminated against at comparable rates to African-Americans. The rate of discrimination is similar. However, when you look at EEOC's charges, the percentage of complaints that come in from the Latino community is much, much lower than the amount of discrimination that is actually happening.

Therefore, it is very important for you all to be collecting the data in the form so that you can identify patterns and practices that may be causing a discrimination against a large number of individuals who are similarly situated.

An individual can still come forward, but what I am saying is that there is a barrier within our community, and it is a long existing barrier in which I can time, but the history is that the Latino individuals generally under-report, and it is important for you all, too, as charged with enforcing Title VII, not just in terms of handling individual claims, but also pursuing pattern or practice cases, to be able to monitor what is happening both in terms of the Latino data and the racial data all together.

COMMISSIONER SILVERMAN: But our proposal would capture sort of the -- would capture the Latino data. It is the racial component of it that you are concerned about?

MS. DEMEO: Well, there is the situation which I explained a little bit more in my testimony, which is that there are within the Latino community, there are some Latinos who may identify as black, and some as white, and different racial groups.

And so being able to also identify them by their race and not just their ethnicity, will allow you to be able to figure out when you combine those numbers. Let's put it this way. African-American numbers with Latino Blacks, and when you are able to combine that, you may be able to tell that there is actually a pattern or a practice against people who are black, regardless of their ethnicity.

But you may not necessarily have the numbers to really identify that if you are not reporting or having people report both ethnicity and race.

COMMISSIONER SILVERMAN: Mr. Norris, do you have any response to that?

MR. NORRIS: Well, I would simply respond that we need to take a look at the benefit versus the burden issue. This is something that OMB always looks at, and the experience from the 2000 census suggests that only 2.4 percent of the population identify themselves as belonging to more than one racial category.

And that when you look at the percentages of the four most common combinations that have been referred to, the most popular I believe was only 4/10ths of a percent of the U.S. population. So we are dealing with very, very small numbers now.

And I am not sure of the statistical analyses that are sought here in the short term, anyway, are going to be that significant. In the long term, perhaps, but in the next 10 years, I think the numbers are too small to warrant the granularization of data on race and ethnicity that has been suggested.

COMMISSIONER SILVERMAN: Thank you both.

CHAIR DOMINGUEZ: Commissioner Miller.

COMMISSIONER MILLER: Thank you. I want to thank both of you for your sort of detailed and extensive contributions. I thought they were both excellent and really helpful to our understanding of the question or of the issue before us.

I want to return, Ms. Demeo, to this issue of sort of two or more races category, and if I understand your recommendation, sort of doing away with that multi-racial category and having individuals check off the boxes for each of the individual races that they affiliate with.

How does this support effective enforcement? We heard earlier how these EEO-1 Forms have multiple uses, including enforcement of civil rights laws. How does this sort of break down support that?

MS. DEMEO: Well, if I can first answer I guess in the negative, which is having a multi-racial category does not allow you to enforce Title VII, because if you have a two or more race category, you have now lumped in all sorts of people who may have nothing in common.

And who may be discriminated against, some section of them, and let's say people who may be combined black and white may be discriminated against, and people who are American Indian and White may not be, but you won't be able to tell because you have now lumped them all into one sort of category.

So everything is sort of a mess, and it might even itself out. On the issue of getting rid of the multi-racial category, which is actually really seems to be quite clear from OMB's guidance, and not just in terms of the census, and how it is collected, but in terms of how the EEO agencies are supposed to collect the data.

What they did is that they said obviously we need to take into consideration the burden that this could put on employers to actually have to collect data, that if somebody were to check off two races, and another three, and another one, four, it could add up to 62 categories.

So what OMB did after numerous Federal agencies had said that we will just pick the ones that are the most common, and I think that is a balance that they struck in order to address this issue.

Finally, on the civil rights enforcement question and as to how that plays out, that is why the OMB then ultimately said that you do as an enforcement agency have to do some reallocation.

So just based on how race really works in society, and it is not just a matter of how you identify, but also how you are perceived, and how you are treated.

So, just because you might racially identify as more than one racial group doesn't mean that you won't be perceived as a member of a minority race, and then treated subsequently as a member of that race.

COMMISSIONER MILLER: Mr. Norris, do you have thoughts on the multi-racial category?

MR. NORRIS: I do, and I have concerns about the government on the one hand asking employees to identify with great precision all of the ethnic and racial groups to which they feel that they belong,

Only to then turn around and say, well, thank you very much for that information, but we know better than you do, and we are going to use an allocation formula, either Hispanic trumps all in the case of ethnicity versus race; or in some of the other cases that you may say that you are white, and you are black.

But for our purposes, you are black, because that is the way that we are going to allocate you, and the government itself still has not given guidance on how to allocate when you have got two or more minority races identified.

So we have a very real concern about the wisdom of a policy that allows people to identify with precision where they feel they belong, only to reallocate that according to some formula.

Under the approach that we recommended the employee's decision ends the matter, and what they say where they belong is where they are reported, and is where they are analyzed, and that in your judgment is where they belong.

COMMISSIONER MILLER: Thank you. Just one follow-up question for you, Mr. Norris, about the implementation issue in 2005 versus sort of at an earlier point. Tell me about -- I guess I am sort of -- I want to know a little bit more from your perspective about the sort of hoops that changes sort of that businesses are going to need that sort of extra time, or that longer period of time, to implement. Or is it just a matter of sort of not that?

MR. NORRIS: Well, no, there are tremendous differences. I mean, this makes a tremendous difference, your decision on this matter. If you were to implement and require companies to collect in the 62 categories, that is going to require companies to re-engineer, and as I said, expand 10-fold the number of categories used for collecting information on race and ethnicity, only then to turn around and have to aggregate that for purposes of reporting.

Also, with that format, it raised the prospect of having to resurvey the entire work force in order to give individuals the opportunity to identify which combination of racial groups that they would like to be affiliated with.

That is going to cost hundreds of millions of dollars. If you were to go to the 7 and 7 format that has been proposed, the costs would not be extensive. We don't think that a re-survey would be essential. There may be some companies that would choose to do that.

But the costs would be far less to go to the 7 and 7 format than the 62 and 7 format that has been suggested. But in either event, even with a more simplified format, companies are going to need at least a year to reconfigure their systems, not only because it is technically difficult to do, but because at this point in most budgeting cycles, there isn't money available for reconfiguring HRIS systems in calendar year 2004.

That money will be budgeted in the 2004 cycle to be used in 2005. So that's why we feel even with the simplified format a delay to 2005 is necessary.

COMMISSIONER MILLER: Thank you.

CHAIR DOMINGUEZ: Thank you, Commissioner Miller. Mr. Norris, I want to get back to the stratification question, because I am still unclear given the examples. Going back to 1966 when this form was designed, again we were in a manufacturing society. Lines of progression were very clear.

People knew exactly where they stood. Peter Drucker, our guru of management, says that career ladders gave way to a step ladders, and now we are lucky to find a rope ladder, and now the lines of progression are not very clear.

But we do know that proximity to power, and we do know that proximity to a CEO does define the role that one plays in terms of setting policy and influencing a particular direction in an organization.

So, for example, using a human resources example that you gave, the executive of Human Resources would be part of a managing committee, who may have a director of staffing two levels from the CEO, who may have a staffing manager under that director.

So it is very well defined, even though we don't have a manufacturing setup any more, but that we have a very well defined line of authority, because the source of the authority is the CEO.

And I don't know, but I have yet to find a CFO or a General Counsel reporting three levels down from a CEO. I think the first thing that a CEO would find is their brain trust, their team that would be responsible for the line operations and all of that.

So I am -- and titles don't do that. If I may wear my OFCCP director hat from the old days, and my corporate consulting hat from the old days, there are SVPs under SVPs, and there are VPs under VPs. Titles don't tell you a thing.

Reporting relationships do, and so I am at a loss as to why a stratification process that truly delineates one's influence, and importance, and value to a corporation as defined by reporting relationships is something that is not considered to truly reflect that.

MR. NORRIS: Well, I wanted to clarify our concern with the Commission's proposal, because it is not an absence of sympathy with what you are trying to do. The stratification is intended to make more visible the glass ceilings. We understand that. We don't disagree with that at all.

I think what our concern is, however, is that the three level stratification that has been proposed is going to be inconsistently applied in good faith across companies. It is not going to give you the level or the amount of consistency that you are looking for.

So it is not out of a lack of sympathy for what you are trying to do, but we don't think that this proposal is going to work. We would prefer that companies continue to deal with the current one-tiered form. We all know the limitations of the one-tier format.

But I think we are willing to address that largely through your own efforts when you were at the OFCCP, and you implemented the glass ceiling initiative. Companies are themselves evaluating tiers within their organization, but it is being done in the context of their organization, and their culture.

And we don't think that you are going to get the same consistency with the proposal that you have advanced.

CHAIR DOMINGUEZ: Well, I appreciate your assumption that we now have consistency under the current structure.

MR. NORRIS: Well, at least all managers and officials are in that category, yes.

CHAIR DOMINGUEZ: Right. Right. It is a fairly broad category, but thank you for that. Well, thank you very much, Ms. Demeo and Mr. Norris. Now, let's take a 10 minute stretch break, and we will resume at 11:15.

(Whereupon, at 11:05 a.m. the hearing was recessed and resumed at 11:15 a.m.)

CHAIR DOMINGUEZ: Well, it is a great, great personal pleasure for me to welcome for the first time participating at the Commission Mickey Silberman, who is on the Board of the Advisors Council for the National Industry Liaison Group.

The National Industry Liaison Group is a very valuable and important constituent, both to OFCCP and to the Commission. And we are just thrilled to have them as partners in our discussions this morning. So, Mr. Silberman, welcome.

MR. SILBERMAN: Thank you. Madam Chair, Members of the Commission, and colleagues, on behalf of the National Industry Liaison Group, I would like to thank the Commission for the opportunity to appear today to discuss the EEOC's proposed changes to the EEO-1 report.

I am Mickey Silberman, legal counsel to the National ILG's Board of Advisors. As background, the ILG is an association of employers throughout the United States committed to equal employment opportunity and affirmative action.

The ILG originated as a liaison organization between Federal contractors and the OFCCP programs. Today, ILG represents hundreds of employers who in-turn employ many millions of our citizens.

Our member companies all have EEO-1 reporting obligations, and the vast majority are government contractors or subcontractors. Therefore, we are particularly interested in the impact of the proposed EEO-1 changes on affirmative action planning.

Before I provide my substantive comments, I would like to commend the Commission on its efforts to revise and update the EEO-1 Form, the first revisions proposed in more than 30 years.

We recognize the EEOC's efforts to develop consistency with the 2000 census data gathering methodology, and the guidance provided by the Office of Management and Budget regarding the collection of race and ethnicity data.

I would like to address my substantive remarks to certain aspects of the proposed EEO-1 revisions. First, the proposed subdivision of the officials and managers EEO-1 category into three hierarchial subcategories.

We support the subdivision of the officials and managers category into the three subcategories. We believe the subdivision should allow for more precise analysis of the EEO-1 trend data, and enhance affirmative action planning.

In addition, companies utilize EEO-1 data for many other initiatives, such as diversity planning. The subdivision of this category should enhance these initiatives as well by offering more precise nuance grouping of management level titles.

Over the past several years, we have witnessed a significant increased focus by employers on diversity planning, particularly at the management level. Increasing, this includes small to mid-sized employers that do not possess the resources to independently benchmark data to which they can compare their management race and gender representation.

The proposed subdivision of the officials and managers category will provide readily available inexpensive benchmarking data that will enhance diversity planning. However, we do not support the move of the service workers category from its current position, ninth among the EEO-1 categories, to the sixth category.

And the resulting move of craft workers, operatives, and laborers, down one peg each. The anticipated cost to employers in changes to their HRIS systems as a consequence of the reordering of these EEO-1 categories will be potentially enormous.

Furthermore, we do not anticipate any significant benefit from the reordering of these categories. Next, I would like to raise our concerns regarding the proposed linkage of the EEO-1 categories to census occupation codes.

We do not support the required linking of EEO-1 category to these codes. For affirmative action purposes, employers need broad discretion and flexibility to identify those census occupation codes that most closely mirror the specific job titles in their particular work force.

The content of seemingly similar job titles vary from industry to industry, and even among employers in the same industry. Providing employers with this flexibility will allow for more accurate EEO-1 reporting and enhance affirmative action planning.

In addition, I would like to respond to the EEOC's burden estimate for the proposed changes. It is difficult to predict with certainly the anticipated costs in time and resources to implement the changes proposed by the EEOC.

However, we do believe that the EEOC underestimates the likely burden on employers. According to the EEOC's notice of proposed revisions, 45,000 private employers respond annually to the EEO-1 report survey.

The EEOC estimates that the total time implementation burden for the proposed revisions will be approximately 660 thousand hours, resulting in an average burden estimate per employer of 14.7 hours. We believe that this significantly under-estimates the likely burden for employers in view of the substantial resources needed to accomplish the following.

First, resurveying the incumbent work force to incorporate the new race and ethnicity categories. Second, the design and incorporation of these changes into a company's established HRIS systems. Third, the training of human resources and information technology staff regarding those proposed changes.

And, last, compiling, proofing, and finalizing for the first time the responses to a substantially redesigned EEO-1 report. Because of this substantial burden, we recommend that employers be required to implement these changes no earlier than 2005.

In addition, I would like to comment on our concerns regarding any inconsistencies between the EEO-1 report and a changed form, and OFCCP's obligations. And Mr. Melvin went a long way in assuaging those concerns earlier today.

Nonetheless, we believe that it is critical that the EEOC coordinate with OFCCP regarding the timing and the specific substance of those proposed changes. Employers will be unfairly burdened if they are required to maintain divergent data collection and record keeping systems because of inconsistencies between the EEOC and other agencies, even if it is for only some small gap in time.

The proposed changes should not be implemented until the EEOC, the OFCCP, and other relevant agencies have publicly announced a consensus on the content of the changes, and the precise time frame for implementation.

In closing, once again I would like to commend the EEOC on its efforts and thank the Commission for the opportunity to provide the National ILG's feedback today. Thank you.

CHAIR DOMINGUEZ: Thank you very much, Mr. Silberman. Let us now take some questions from our fellow Commissioners. We are not sure whether the representative from the Rainbow PUSH Coalition will be here, and so we will just treat you as a stand alone panel for now. Vice Chair Earp.

VICE CHAIRPERSON EARP: Just one question. If the proposed changes are to be effective in FY '05, and if employers are using the time to recalibrate their systems, what will employers report to us in '04, or how do you respond to the reporting expectation for this current fiscal year?

MR. SILBERMAN: I think it is a good question. For lack of a better method of approach, I think that the 2004 EEO-1 cycle should continue with the existing race and ethnicity categories, and I appreciate your point that companies presumably, at least some companies, will be in the process of redesign and reimplementation.

In speaking with companies, their feeling is that there will be a significant amount of time needed on the redesign side, and I believe that can move forward during 2004 once the EEOC has given direction as to what the final categories are.

Nonetheless, there is no need for companies generally speaking to actually implement the redesign, the changed format, for 2004. I am speaking now based on a small survey, a sampling of companies, but they believe that they can produce based on the existing categories in 2004, and most likely be prepared to respond based on revised categories in 2005.

VICE CHAIRPERSON EARP: Okay. Thank you.

MR. SILBERMAN: Sure.

COMMISSIONER SILVERMAN: No questions.

CHAIR DOMINGUEZ: Commissioner Miller.

COMMISSIONER MILLER: No questions. Thanks.

CHAIR DOMINGUEZ: Thank you very much, Mr. Silberman, and let me also thank the members of the NILG Board who have taken time to join us this morning. Thank you.

Our next panel, panel number four, please come up.

MS. BEECHER: I am Anita Beecher, and I am with ORC Worldwide. I am the Chair of the Employment Law and Litigation Group with ORC, and it is our pleasure to be here to give comments to you this morning.

Madam Chair, Madam Vice Chair, Commissioner Silverman, and Commissioner Miller, and colleagues, on behalf of ORC Worldwide, I appreciate the opportunity to appear before the Commission to offer our comments on the EEO-1 Form, which is, as we know, required annually of private employers.

ORC Worldwide is an international management consulting firm specializing in human resources. Nearly 300 senior managers in corporate labor and employment councils from major Fortune 500 companies participate in our networks and other activities in order to provide compliance in management systems and practices in the area 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 reports, and then there are also Federal Government prepared affirmative action plans. We would like to spend just a few minutes discussing what we see as the practical impact of the proposed changes and, first and foremost, we would like to thank Mr. Melvin for providing us with some comfort in the area of whether there will be consistency between the two, EEO-1 and OFCCP.

We would like to -- all of our comments reflect concern that the proposed regulations are very burdensome to employers. ORC recommends the following to employers to relieve some of the burden. First, which a number of other panelists have mentioned, please make the effective date 2005. Pretty please.

The screams from the members could be heard from coast to coast when the thought of -- many of them have vendors who can't even start implementing systems changes until you finalize them. So once we know what the finalized guidelines are, then they can start hiring their vendors, or going to their IT people to begin rolling this out.

Second, clarify the data that is going to be required to be collected, analyzed, reported, and maintained. And at this point we are especially concerned, and which many others have also expressed, about the two or more race category.

As many others have said, it is cost prohibitive for employers to make any changes to our computer systems until we know what the final rules are going to be. The idea that EEAC proposed when we turn to the issue of the data collection, we would like to propose a slight variation of a theme.

There has been much concern expressed by employers, by our human resource experts, how are we going to explain to Hispanic Latinos that they cannot also check that they don't have a race. So the idea of using seven categories, including the two or more races, makes a lot of sense from an HR perspective.

But our twist on that would be to have the two or more races be two or more ethnicities, and then allow the employee to decide what category they would like it allocated to. "I would like to be counted as..." Just a suggestion on a variation on a theme, understanding that OMB has a very different approach on this.

Our concern from the present regulations as EEAC expressed, and the Chamber as well, is the collection of the 62 different variations. We technically under this present regulation would have to collect it, but how long do we have, and according to what Jeff has expressed in the testimony, we don't have to maintain it, however, but we do have to collect it.

And that would be very confusing to employees as we try to explain to them about the forms. And these are not exercises, I would like to indicate, that employees particularly like.

I recently read that many younger employees are refusing to self-ID, which is going to put us in an even bigger problem. They don't want to be identified, thank you very much.

It is problematic to us that individuals who are Hispanic, and I would like to slightly contradict by saying that we want to report both race and ethnicity. We don't want to double-count, but we are concerned about the fact that Hispanics cannot report race as well as ethnicity.

And our concern, which is why we have made a proposal, might be a way around that. I do think that is a problem that there needs to be dealt with in some way.

We, like the NILG, do like the three tiered system for officials and managers, because we believe that most of our employers already look at their people that way.

So from that perspective, most of them being government contract employers, they already have that. However, as a number of other speakers have noted most of the companies cannot live with the idea of hard wiring the job codes to the various levels.

If there can be guidance, clearly we want guidance, and that would be very useful. But a hard-wiring, employers are going to give you whatever you ask for, but it may not accurately reflect the way that their organizations are really set up.

A perfect example is we have financial institutions and in the financial institutions, clearly people who are in finance are higher on the scale, a manager in finance may be at a middle level.

A manager in HR may not be at a middle level. They may be at a lower level. It is a hierarchial thing within the organization. Who brings in the money and that is how it usually works.

And it would really -- I think that the idea of somehow allowing the employees, or I'm sorry, we don't really have a problem with the three levels, but we do need the idea of being able to have this not as a requirement that we do that.

Another pretty please if I could. The moving of the service workers from 9 to 6, that is a very difficult situation for our members who have to go to their bosses and ask them to please give us a lot of money to change our internal computer systems in order to make this number change.

Why are you making this number change. Well, because they told us to. But why are they making it. Well, we don't know. And if there is a good reason for it, you know, that is what we would really like as an explanation, because I think that, more than anything else, we would rather not change it unless there is a really good explanation for why.

I had one final request, which I think really goes to Commissioner Silverman's earlier comment. There are some minor changes in the job category definitions which seem to have made a change in those job categories.

In particular, in the professionals, technicals, and service workers categories, the definitions have changed somewhat, and some clarification on whether that is a substantive change.

The example that comes to mind, and in particular raised by some members, where the professional category seems to be eliminating those people who are non-degreed, and many engineers may have -- many professionals may be professionals based not on their degrees, but on their experience.

So a minor point, but a clarification would be very helpful, and I think in general that educational materials would be very welcomed by all employers. I would like to commend the Commission for the job that they have done on this. I know it is a very difficult task, and we are very appreciative of this opportunity to speak.

CHAIR DOMINGUEZ: Thank you very, very much, Ms. Beecher. I appreciate your remarks and your presence here today. Mr. Northup.

MR. NORTHUP: Madam Chair, Madam Vice Chair, Commissioners, I would like to thank you for the opportunity to speak today at the hearing for the EEO-1 Form. My name is Christopher Northup, and I am an independent HR consultant. I have been working in the affirmative action and EEO field for over 20 years in a variety of roles.

My comments today are based on the experience that I have had with a wide variety of employers, both large and small, and across many different industries. I had prepared and submitted already a detailed statement, which is part of the record.

And what I would like to do since many of those have already been covered by previous persons testifying here is to elaborate and focus in on several comments that I think I would like to bring to the Commission's attention.

The first is that if we look and sort of go back upstream and look at the process by which the EEO-1 information is first gathered and processed at organizations, I think it is important to know and understand that many of the people who are actually preparing and classifying the jobs within the organizations are perhaps not as knowledgeable as many of us might assume.

Based on my experience in just looking at the records that companies maintain, you find that often the classification of job titles into the existing nine EEO-1 categories may be done by an HR professional, or it may be done by an administrative assistant, or a clerical type person.

It can be what we would consider a very low level function, and those persons who are involved in this classification often do not understand what the impact of the coding is. They don't perhaps see how this information is used in the enforcement and in the affirmative action areas.

And the reason that I bring that up is that with the current nine categories going into organizations, I have seen many errors, either innocent -- well, not deliberate, but perhaps due to a lack of understanding, or perhaps just from carelessness.

But the Chair in her conversation earlier with Mr. Norris even made the statement that the assumption is that the current information is accurate, correct, and consistent. And I am not sure that we really know the answer to that.

And therefore if the Commission is proposing with the officials and managers category to further subdivide that into three categories, then as statements have been made before, that the assumption is that if you have these additional categories that you are going to have accurate information and consistent treatment across all organizations.

I think there is some serious question about that, and as others have stated, I think the major concerns are probably with the mid-level and the lower-level, where you don't have as much of a bright line to differentiate the upper, senior level executive from the other two categories.

So I would suggest that the Commission take a very hard look at that, and I think you have already heard a number of arguments, or positions on that, and I won't repeat that.

But, again, I would suggest that we look at the process and make sure that we do what we can to ensure a consistent classification process. And to that end, one of the things that I think would be helpful, and I think that has been touched on earlier, is that education as we go forward with whatever categories, whatever form we end up with, it would be helpful to have sufficient training or educational materials.

The current EEO-1 instruction booklet has actually very little in terms of guidance, and certainly it is better than none, but there is confusion out there, and I know recently talking to an organization, a professional, who had never done this before, when I referred this person to the existing documentation was at a loss as to exactly what they had to do.

And I think that a lot of us who are familiar with it use our experience in making judgments and decisions as to how to classify these. So I would ask that some effort be placed on educating and providing assistance on that end.

And I think that will go a long way to making sure that the data are accurate and consistent. So I will just sort of leave you with that. Then the second comment that I would like to address that if in fact we do have three categories in the officials and managers, I think there will be some areas, and certainly at the national level, when we look at the data in the aggregate, that will not be as much of an issue of having sufficient numbers to analyze and to rely upon.

But as soon as you perhaps look at the mid and the lower level categories, and start stratifying both by industry and perhaps by local regions or areas, there may be a scarcity of data in some areas. Obviously we won't know until we actually -- and if we collect the data, we would have a better idea.

But it would be important to at least consider that, and that you don't want to subdivide the categories so much when you are looking at subnational levels that the data become meaningless, and that you then essentially have to aggregate up, and you are back to where you started.

And again the issue of looking at the burden versus the benefit. Certainly, I think that with the executive, the senior level category, the assumption is that would probably be used at a national level, and even though the numbers there would be relatively small compared to the rest of the categories, as long as you stay at the national level that might not be an issue.

But again I would like to reiterate that the mid and the lower level categories, there could be data issues, and being sort of a numbers person, I am sensitive to that, and if you are looking at it for litigation purposes, or more than just general trend purposes, and I think that is something that has to be considered.

Then my last set of comments pertains to the resurveying effort. That is, again with whatever categories are final in terms of the race and ethnicity as proposed with the seven that have been put forth on the current form or the post-form, it will be necessary obviously for employers to comply with that.

And it appears that the current guidance in the proposed form and the instructions does not really address the issue of whether or not employers must or are mandated to resurvey their work force.

And certainly that would be helpful to clarify and I have a couple of recommendations with suggestions there that the Commission I would hope would consider. And before I get into that, I want to go just a little into the background again, and I think that some statistics have been thrown out before, but I want to clarify that.

When we are addressing the issue of those persons responding in the two or more races category, on the 2000 census, approximately 2.4 percent of respondents reported that they were in that one category, two or more races.

Now, if you then back up the Hispanics or Latinos under the assumption under the current seven categories that if you are Hispanic or Latino that would trump all others, that if you then back out those persons of Hispanic or Latino origin, then you are left with 1.6 percent of the population is reporting in the two or more races.

And then if you further add to that the .1 percent, which is the representation of Native Hawaiians or other Pacific Islanders on the 2000 census, with those sort of new categories as a result of the OMB directive, that you are talking about 1.7 percent of the U.S. population is reporting in these new categories.

The other thing that we should keep in mind is this is the 1.7 percent across the board for all ages, and if you actually look at the statistics, I believe that those who are under 18 tend to report higher in the two or more races, as opposed to those who are older. I think that is one of the reasons that this came about.

So that at most we are talking about 1.7 percent of the U.S. population reporting in these new categories, and the impact of this is that if you had an employer who had, let's say, 500 employees, that was reporting on the EEO-1, that you would expect on average less than nine individuals to report in these two new categories; the two or more, or the Native Hawaiian.

And if you take a thousand employees in a work force, then that only goes up to only 17 employees, and if you look at an even larger work force of about 50,000 employees, that would result in only 850 employees approximately that might identify, self-identify into these categories.

And the reason that I bring this up is to look at the effort that is going to be required to gather this information. That is, that if a survey effort is mandated, then the results of that could result in very few people self-identifying into these new categories.

And again the issue of the benefit versus the burden. Of course, as we go forward, new employees, new hires, would have the opportunity to be -- you know, to self-identify, but again talking about the resurvey efforts within the work force.

Then the other last point related to this, again in the resurvey area, is that employers will have --- if they have to resurvey, they will send out a questionnaire either electronically, or perhaps in paper format, and there will be a certain percentage that will be non-responding.

And if you have only let's say a 10 percent non-response rate, what that means is that an employer that has a thousand employees, we are still talking about perhaps a hundred employees that they are going to have to follow up, and either do a visual or do some other follow-up with.

And obviously as the organization grows larger the numbers become more extensive and take more time. Given that the HR staffs these days -- and I think you could say safely are overburdened and have a lot to deal with, that this additional effort in following up on the resurveying is going to be a burden to them, and probably will hit the smaller companies as much as it will the larger ones.

So with that, what I would like to propose for your consideration is that, one, that in the final issuance of the EEO-1 Form that employers be given the option to resurvey their work force for the current time being, and that obviously with new employees that they would have to do that.

But that would at least relieve them of some of the burden; and that, second, if it was decided that resurveying is mandatory, that employers then be given the option to look at the current race or ethnicity that is already identified in their HRS, or their systems, and that would then further relieve them for having to go out and either do a visual or do the follow-up.

And I think that those are things that would go a long way to assisting employers in this effort, and make it easier for them to comply, and still stay within the spirit of these regulations.

So with that, I would like to thank the Commission for the opportunity to speak, and appreciate it.

CHAIR DOMINGUEZ: Thank you very much, Mr. Northup. I appreciate your remarks. We will now hear from Cornelia Gamlem, who is here representing the Society for Human Resources Management. Welcome.

MS. GAMLEM: Thank you, Chair Dominguez, Vice Chair, and Commissioners. I appreciate the opportunity to come before you today to speak about these changes to the EEO-1 report.

My name is Cornelia Gamlem, and I am an HR consultant. I started my own consulting practice in 2000 but, prior to that, I spent 16 years with a Fortune 500 company, where I had responsibility for EEO and affirmative action.

In fact, I was responsible for filing the EEO-1 report every year for an employee population of over 50,000 employees all around the United States. I am a long time member of the Society for Human Resource Management, and I have held a number of leadership positions, including serving on its Board of Directors for 2 years, and chairing its Workplace Diversity Committee from 1997 to '99.

I am here on behalf of the Society, which represents 175,000 human resource professionals. Our mission is to serve the HR professional, while advancing the profession, to ensure that HR is recognized as an essential partner in developing and executing organizational strategy.

SHRM applauds the Commission on its efforts to revise the EEO-1 Form in order to achieve consistency, and to recognize the diversity of our work force, and our overall population today.

But we see some significant changes, most of which have already been addressed, but there are some things that I would like to reiterate from a practical point of view where the HR practitioner sits.

We have heard about concerns with the questionnaire, and the fact that an employee is asked first to identify their ethnicity, and then to identify race, and are given a number of options with which to identify, but are then told that if you choose Hispanic Latino, your race will not be reported.

I think that is going to cause a great deal of confusion and contention among employees, and absent more specific guidance to the employees, to the HR professional as well I think there is going to be more of a push back and resentment, and unwillingness to provide a lot of information.

HR members, who in their roles as HR professionals stand on the front line, see and recognize this every day. There is also going to be pushback when employees are told that if you choose more than one race, assuming that you are non-Latino or Hispanic, we are going to ultimately report you into one group that is lumped together as two or more races, rather than with that race or races with which they primarily identify.

Again, some pushback, and some concerns, and I think that the HR practitioner is going to be at a loss to explain why some of this information is being collected and not used.

Well, the data gathering methods proposed are certainly supported, and we do agree that self-identification is preferable to trying to do a visual observation, particularly when you are dealing with issues of multi-races.

There are still some concerns that we have. We would suggest that the two-step process be eliminated, and that employers gather only that data that will have actual use on the EEO-1 Form, and that the employee questionnaire contain a clear and concise explanation as to the purpose of the data collection.

Parallel with this is the other discussion that we have heard around how the information will be reported out, and separating out a number of the racial categories.

Once again, separating ethnicity and racial categories, while most of the people in this room recognize the precision around those, the average employee does not, and the average HR practitioner does not.

In a speech that I made or a presentation that I made just a few weeks ago, and I was talking about this issue, one comment that came up was why are we seeking to just find out about the Latino-Hispanic ethnicity, and what about other ethnicities and groups.

A lot of employees are going to start to have some push back around that, and the concern that we have though is if we begin to report by ethnicity, and then not the race of those individuals who identify as being Hispanic, but then choose several other races, we are going to get some skewed data.

And in trying to ensure from an internal point of view that we are treating our employees fairly, and that we have a good representation of the work force, the danger that we are concerned about is that there is going to be a heavier representation via the statistics of individuals who are Hispanic-Latino.

And individuals who identify in other races will not be adequately reported and adequately identified in some of the work force statistics that are gathered.

With respect to civil rights enforcement, we see that this is a particular problem, and with respect to those of our members who are Federal Government contractors, and have to write affirmative action plans, trying to balance out data that right now is not balancing is going to be more problematic for them as they go forward.

SHRM can infer no rationale for treating Hispanic or Latino employees differently from other minority subgroups, and I think that is a key to where so many people are going to hold on to.

We are used to looking at five mutually exclusive minority subgroups, and there really is some confusion about how you handle a number of subgroups that are now not mutually exclusive.

In addition, inaccurate population numbers will not assist the EEOC nor OFCCP in the proper performance of its function, and SHRM is concerned that if such faulty data is relied on that government action to combat discrimination may be undertaken based on faulty premises.

We recognize that multi-racial demographic data needs to be addressed, and that the proposed form would greatly diminish the utility of EEO-1 data gathering.

While the current form does not address multi-racial issues, it does at the very least provide a tool that gives the government consistent and clear data.

SHRM feels that the use of the Hispanic-Latino ethnicity category which trumps all over race categories, and a two or more race category that potentially eliminates the reporting of an individual's primary racial identity, does not result in improvements.

Therefore, SHRM recommends the following suggested changes to the EEO-1 Form: All race and ethnicity categories should be presented, considered, and counted uniformly.

Require all employees to check the race and ethnicity with which they primarily identify.

Provide all employees, including Hispanic-Latinos, with the option of checking a two or more race category.

When compiling statistics, the percentage of multi-race ethnicity would be based on the entire work force, and thus the EEO-1 Form would not only be an evenhanded and neutral reporting of an employer's demographic based on primary identifiers, but a percentage of the work force that considers themselves as multi-racial.

And as proposed, consider Asians and Pacific Islanders as separate races. Finally, I think in order to serve the HR profession today, I have to comment on a number of the changes that are being suggested around the official and managers job group.

While SHRM supports this hierarchial structure, we do have concerns about hard-coding some of the census codes to individual levels, and I know that you have heard this before, but I think I would be remiss since I am representing SHRM to say that you can't take a function and expect that that function is always going to rest at the same level, and particularly for HR individuals.

We also have concerns about changing the order of some of the categories for a lot of the reasons that have already been expressed here today. And we do have concerns about the financial burdens and the time burdens, recognizing that there is a lot of work to be done, and organizations have not been given adequate lead time, nor can they start to make these changes until final decisions are made. Thank you very much for the opportunity.

CHAIR DOMINGUEZ: Thank you very much, Ms. Gamlem. Madam Vice Chair.

VICE CHAIRPERSON EARP: One question on data, Mr. Northup. From your comments should we presume that you support the Chamber's recommendation of two tiers for officials and managers, and if that assumption is accurate, does it cure the data problem?

You talked about stratifying the data for geography and other means, and restratification may give us a question with the pools of data being too small.

But if we have one category or two categories don't we have the same problem, but from the opposite point of view that the reliability of the data is questionable because it is too large?

MR. NORTHUP: You bring up some good points. I think that I would find the Chamber's proposal to stratifying into categories acceptable from a data perspective, and the reason is if you went along with that, the senior level or the current senior level executive category is relatively small. My estimate is probably in the 500,000 range, maybe.

So therefore what you are left with in the remainder, in the second category, would be very close to what the Commission is currently collecting now on the officials and managers category.

So that you would have no more data problems in terms of numerocity that you have now if you went to this two-level or two category proposal.

I don't know if I made that clear, but essentially if you take out, or if you have two categories, and you have the senior level and you have this other, which is a combination of mid-and-lower, that for all practical purposes all you have done is taken a small portion and put them into senior, and you are left with approximately the same number of employees that we have under the current officials and managers category.

So what it allows you to do is to at least look at the very high level executive type positions nationwide, and while not really affecting the integrity and the usefulness of the data in the other category, which will be really the majority of employees who are officials and managers anyway.

VICE CHAIRPERSON EARP: So you would say two categories will not give us data any more unreliable than the one category that it is currently giving us?

MR. NORTHUP: That's correct, yes. I think that would be a fair characterization. I wouldn't worry about having the lack of data at the lower levels.

I mean, if you had it now with the current EEO-1 Form, certainly that is not going to improve, but because you are shifting very few people out of the officials and managers up into the senior level, I don't think that it would affect the reliability of the results there.

But it would still give you that senior level and which could be useful for a trend analysis. Again, you have to be careful because even with that senior level band, depending on what you want to do with it, you have to be careful of the types of assumptions and the use of that data.

But certainly, I think that is of interest to a lot of groups, and Commission's civil rights enforcement, and other things like that.

VICE CHAIRPERSON EARP: Thank you.

MR. NORTHUP: You're welcome.

CHAIR DOMINGUEZ: Commissioner Miller.

COMMISSIONER MILLER: Mixing it up a little bit.

CHAIR DOMINGUEZ: A little bit, yes.

COMMISSIONER MILLER: I was paying attention. I want to return for a moment to this issue of the two or more racial categories, and sort of tease out a little bit of, I guess, reaction on that, because that is something that we have heard a lot of people sort of comment upon.

I think that, at least from my perspective, we are in a different place today than we were 30 years ago, or however many years ago, when these categories first sort of sprung.

And so I guess that the effort is to try to acknowledge that difference, and to do so in the least imperfect way possible. And so I want to sort of revisit. Mr. Northup, you sort of talked about sort of splitting the categories a bit.

But I also heard Ms. Beecher say something about being more attuned to these multi-racial or multiple race categories. So I guess sort of at some point do we need to acknowledge two or more races?

I mean, my mom is white, and my father is Chinese-American, and why should I have to choose which race I sort of identify with? Over time, is this going to sort of play out? I mean, what are your sort of senses?

MS. BEECHER: Well, just to start, I guess the problem that we are dealing with is that we have a data issue here, and the issue is for counting purposes the best thing for employers is to be able to have one person in each of the boxes. So everybody is only counted once.

COMMISSIONER MILLER: Right.

MS. BEECHER: So the issue with counting both ethnicity and race for everyone ends up with skewed numbers. So you don't really know who you have and what, at least the way it is set up.

The two or more race category is a growing area, and I think as, our country changes, it is going to be growing ever more. So the concept of I think two or more races is a great concept, but then how do you count those people? I think that is an issue that is not yet resolved.

Two or more races is an issue, but where do we put them for purposes of affirmative action, which to be honest is where many of our members come back to? I mean, we are willing to gather this data ever how you all want us to. Our worry the back of our head is, okay, how am I going to count this, and how am I going to organize this, you know, and what are the numbers?

And our members are often, and as Mr. Northup is aware, and so I think that we are all trying to balance to achieve a result that will do as many different things as possible without making the numbers irrelevant and burdensome at the same time. That is my answer from my perspective.

COMMISSIONER MILLER: Any other thoughts? Mr. Northup.

MR. NORTHUP: If I could just maybe add some comments there. One of the things that I was trying to make a point when I was throwing out some of those statistics and it is just showing that there are at this point in time relatively few people who are reporting the two or more race categories.

It was not necessarily an indictment of not collecting that, you know, in general or in theory, and it was more of a practical matter in the near term, because I think that there is a general trend towards more people falling into that category.

I think that it is a reflection of our society and a lot of barriers have come down, and so that over time you would expect more to categorize themselves like that, and especially the census statistics show that, and that with the younger people, those under 18, to have a higher propensity to self-identify.

So that is important as we look forward. The question is that for our current work force, for the next 5 or 6 years perhaps, what is the impact of that category, and how is that used.

And the numbers of people that are going to fall into that two or more race category is, from a statistical standpoint, really minimal. And so the question there, then, is how much effort should go into collecting and maintaining that data, at least for the present, versus the long term use of that?

So that was sort of what I was trying to suggest is that maybe from a practical standpoint, today, it is not going to make that much of a difference of who ends up in that category, but going forward certainly that becomes more of an issue.

COMMISSIONER MILLER: If I can just follow up briefly. It sounds like that you are saying that a transition to some sort of two or more racial category is a direction that you support that makes sense, but that it might not make sense right now because there aren't enough people there to justify the costs?

MR. NORTHUP: Well, perhaps again looking at the near term benefits versus the costs that employers would occur currently, in the resurveying especially. But, for example, if you have a work force of, you know, 10,000 employees, and there are relatively few people who you would expect --

COMMISSIONER MILLER: But wouldn't there be benefit, and this will be my last question, wouldn't there be benefit in sort of tracking this growth as it expands, and moves, and changes, rather than waiting for the change to have occurred, and then jumping in now that it is a different landscape?

MR. NORTHUP: The question is exactly how this data would be used, and whether it would be for enforcement, or how reliable could that data be used again, because you are talking small numbers, and it may be used for trend analysis.

But perhaps for more rigorous statistical analysis, it may be insufficient for basing a case on. Again, it depends on how plaintiffs and other complainants actually consider themselves and how they will press or file charges, and how they bring other issues forward.

I guess there is -- I don't have all the answers, but I sort of raise that for the time being that again looking at the near term versus long term, there are different considerations.

COMMISSIONER MILLER: Well, we in the government do have all the answers. So, rest assured.

MR. NORTHUP: I am glad about that.

COMMISSIONER MILLER: Thank you very much.

MR. NORTHUP: Makes me feel very comfortable.

CHAIR DOMINGUEZ: Commissioner Silverman.

COMMISSIONER SILVERMAN: I just want to turn back for a moment to the officials and managers issue. To be clear, SHRM and ORC, are you on the same page with this, that you support the three categories, but not hard lining them to the census codes?

MS. GAMLEM: Yes.

COMMISSIONER SILVERMAN: Is that correct?

MS. GAMLEM: Yes, although I do just want to comment that listening to the Chamber earlier, they raised a good point. That if you are trying to have a three-tiered hierarchial structure, it works fine in very large organizations like my former employer.

I get concerned though when I realize that a lot of the SHRM members work for smaller to mid-sized companies, and are they going to have that level of sophistication to understand what the purpose of stratifying that data is?

So coming down to a different or some different schemes, or some options, may be something that you may want to be thinking about.

COMMISSIONER SILVERMAN: Are you saying to support the Chamber, or do you have any suggestions how firms following such an approach could create their own subgroups so that we could still compare similarly situated employers without using the census codes?

MS. BEECHER: Well, I think looking at the three tiers, employers have -- their executives are already set up, and large employers are primarily our members, but they are already set up in that way for purposes of OFCCP glass ceiling initiatives, and as a result, they already kind of know who -- they have people that fall into the three levels.

And the problem is that those are not necessarily the same people that we see when we look at the occupational codes that have been assigned. For example, my favorite, and I think a couple of them are the mid-level are all your finance managers.

Well, in the bank that may be true, but in an engineering company, it probably is not true. All your advertising people are in this mid-level, and so forth, and so on, and they are not all going to be at one level. So that is the hardwiring problem.

And there were a couple of others that were mentioned, I believe, by Mr. Northup where there were some people that were assigned to the third level who aren't even managers.

They are not first level managers, and they were basically engineering types that management is not really part of their job. So we recognize that there needs to be guidance, but we need a fair amount of flexibility, because as you all know, as well as we do, how different organizations are set up today. And they are very evolving as we go along.

MS. GAMLEM: I think that SHRM has the same concerns about hardwiring certain occupational codes to organizational levels. I think you are going to get an unrealistic look at an organization, and indeed we are even starting to see some untraditional inroads with people coming out of the HR field and moving into a CEO type of position.

And in the past it had always been assumed that that was not a natural progression, but we are making advances, and I think we have got to have that flexibility within our reporting.

COMMISSIONER SILVERMAN: But with the flexibility do we end up anyway with apples to oranges, or do --

MS. GAMLEM: I don't think so because, as we explained earlier, if I am working on an affirmative action plan, and I have a group of HR managers, I may already place them using the same occupational code, but I am going to place them in different job groups which could essentially be driven by level of responsibility within that organization.

So I think that you are more likely to be comparing apples to apples than apples to oranges.

MS. BEECHER: At the very least, you are going to have a better and more accurate look at how the management is actually set up in that organization. Of course, a particular form in every corporation.

I know why you all would like to have it that way, but unfortunately corporations are all developed differently.

COMMISSIONER SILVERMAN: Thank you. That answers my question.

CHAIR DOMINGUEZ: So what I am hearing you say is that the hardwiring in terms of aligning the occupational codes to that isn't really a good connection, but that the relationship, the reporting relationships, which is more attuned with the affirmative action program component of ranking people from highest to lowest, and all of that, would make a better predictor of comparing apples to apples?

MS. BEECHER: Correct.

CHAIR DOMINGUEZ: Okay. I see that Mr. Melvin has been a big hit today. Well, thank you very much. I am going to -- well, first, I need to leave, but I just wanted to express my appreciation to this panel and all the other panels, not only for your oral remarks, but also for your written comments.

I know that they are going to be tremendously helpful to us as we continue to deliberate on this, and I am going to yield the remaining of the hearing proceedings to the Vice Chair.

VICE CHAIRPERSON EARP: Thank you. Hopefully there won't be very much to yield. My question is do we have a representative from Operation PUSH, Rainbow/PUSH? Thank you. So do we save the best for last?

MR. LONG: Madam Vice Chair, and other Panelists, I will be very brief. I just want to read a brief statement to be entered in as text as far as testimony on behalf of Rainbow/PUSH and Reverend Jesse Jackson. And I again thank you very much for this opportunity.

The Rainbow/PUSH Coalition is a civil and human rights organization with approximately 300,000 members throughout the United States and abroad. Its mission is to promote a level playing field for achieving employment equity and parity, and equal rights under the law.

The Rainbow/PUSH Coalition is especially interested in equal enforcement of the laws protecting equal employment opportunities. The Rainbow/PUSH Coalition thanks the Commission for holding the hearings on proposed changes to the EEO-1. This action demonstrates the acknowledgement by the EEOC to have a review and consensus of all affected parties.

These parties include employees, the job applicants, employers, and those who may experience discrimination, the Federal contractor community, and other Federal agencies like the Office of Federal Contract Compliance Programs (the OFCCP), and of course the civil rights community.

The Rainbow/PUSH Coalition supports the need for an EEO-1 Form that truly gives an accurate and complete snapshot of the work force of American employees. The organization's commitment is equally strong for reporting documents that lays a proper foundation for companies to effectively create, manage, and monitor their affirmative action plans.

To some extent the new form assists with this endeavor. However, uncertainty in its applicability to affirmative action makes it unacceptable and premature for enactment in its current state. The Rainbow/PUSH Coalition is concerned about the question of representation and advancement for people of color.

While the Rainbow/PUSH Coalition acknowledges and celebrates the increasing size and influence of the Latino population in America, it is important that the EEOC continues to acknowledge the root cause for color and race discrimination in the United States today.

Under the new proposed form, those of African and Latino descent will have no choice on how they want to be protected under the current form. The employee chooses one designation, Latino or Hispanic, or black.

There is no trumping of one race or another. Under the new form, if an employee opts for the Latino designation, they will be considered Latino only, even if they designate another race or ethnicity.

Ordinarily an employee elects an ethnicity, or racial classification based upon identity, affinity, or ethnic or racial group that it has felt protection against discrimination as is most needed.

Under the proposed form the designation of Latino or Hispanic eliminates the reporting of any and all other racial designations for that employee, regardless of any other racial or ethnic designation that that employee might deem to need protection.

Therein lies the problem with the rationale for this new form. While there are important and valid reasons for multi-racial classification, and the gathering of that information for the census, those reasons do not necessarily translate to the need for racial and ethnic identification in terms of employment.

Work place discrimination based on race cannot be effectively addressed by designation based on the first instance on ethnicity or culture. The unfortunate legacy of race in America is that it remains the most visible badge of difference.

While it is important for multi-cultural America to celebrate the rainbow, individual Americans in the work place are more likely to suffer discrimination due to race than due to culture or ethnicity. Numerous studies show that racial stereotyping clings to persons of African descent more than to other ethnic groups.

Persons of mixed race heritage are more likely to face discrimination because of the African component. Under the proposed form, an employee who marks two or more categories, not Latino or Hispanic, is counted in the new category, two races or more.

For those contractors doing affirmative action plans required by Executive Order 11246, it is uncertain how this designation helps to further the cause of equal employment opportunities or affirmative action.

As a result, many contractors will have to suffer the costs of new information technology systems, time resurveying employees, new HR processes, hours upon hours of training and communication without knowing how to incorporate these changes into an affirmative action plan, or knowing how the new data benefits their equal employment goals, or how they improve equal opportunity employment.

These contractors will spend millions to convert to a process that adds little value to their business.

The Rainbow/PUSH Coalition holds the view that the affirmative action process requires the creation of an estimated availability.

The estimated availability is created by looking internally into the employer's work force and externally into the market place for women and people of color who possess the qualifications for the jobs being evaluated.

Since the composition of two races or more is unknown, it is impossible for this factor to be included in any meaningful way in the analysis to create the estimated availability or placement goals for people of color.

While the statute requires the creation of only minority goals in the aggregate, most major contractors create this goal by looking at individual groups to get the most accurate goals.

They also create this goal in this manner so that there is some assurance that all groups have equitable and fair access to employment opportunities; i.e., not just one ethnic group.

Two races or more is costly for employers to determine, but does nothing to enhance or further the affirmative action process, and may actually tend to weaken equal employment efforts.

To move forward on this form without understanding the potential ramifications is premature and to date the process has not afforded the strategic review typically required of any major business practice.

The Rainbow/PUSH Coalition therefore respectfully requests that the EEOC rescind this form and further consult with all parties affected to determine a reporting mechanism that truly meets the mission of the EEO-1 report.

Further, no EEO-1 reporting structure should be approved or implemented until it is determined how it will affect the affirmative action process. This means that a new EEO-1 should not be issued until the OFCCP, the Federal contractor community, and the civil rights community, have determined how employees will be notified about the changes, and how affirmative action plans will be constructed under the new format.

The Rainbow/PUSH Coalition supports the EEOC's three-tiered approach to the officials and management category of the form. This modification will clearly show the need for corporations to more closely monitor their promotions and selection processes.

As we all know from the experience of major corporations nationwide, a lack of attention to the upward mobility of women and people of color will result in a lack of diverse representation. Again, thank you for this opportunity to express the views of an organization that strongly believes in the power of the EEOC.

VICE CHAIRPERSON EARP: Thank you, Mr. Long. Commissioner Miller.

COMMISSIONER MILLER: No, thank you. Thank you very much, sir.

MR. LONG: Thank you.

VICE CHAIRPERSON EARP: Commissioner Silverman.

COMMISSIONER SILVERMAN: No questions. Thank you for coming.

VICE CHAIRPERSON EARP: Well, on behalf of Chair Dominguez, let me thank you for your presence here today, your patience, and your testimony, both what we heard orally and what you have submitted for the record.

This is a complex issue and I want to assure you that we all will take very seriously under consideration the testimony that you have presented.

Thank you again, and this hearing is adjourned.

(Whereupon, at 12:15 p.m., the hearing was concluded.)


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