Pay equity, diversity and inclusion
OFCCP To Release Federal Contractor EEO-1 Reports
On August 19, 2022, the Office of Federal Contractor Compliance Programs (OFCCP) gave notice regarding a request to release federal contractors’ EEO-1 report data.
Below we dive into the specifics of the request, which organizations it applies to, and what to do to prepare.
Why is the OFCCP requesting EEO-1 report data?
The Center for Investigative Reporting initiated a Freedom of Information Act request (FOIA) to make federal contractors’ Type 2 EEO-1 reports public. So, the request is actually from the Center for Investigative Reporting, and the OFCCP’s notice to federal contractors is more of a courtesy. In the official notice, the agency states, that it “received a request under the Freedom of Information Act (FOIA) from Will Evans of the Center for Investigative Reporting (CIR) for all Type 2 Consolidated Employer Information Reports, Standard Form 100 (EEO-1 Report), filed by federal contractors from 2016-2020.”
As a reminder, Type 2 EEO-1 reports contain federal contractors’ consolidated employee demographic data, including race, gender/ethnicity, and EEO-1 job category. These consolidated reports are typically filed by the parent company and account for all of its subsidiaries.
Fortunately for employers, the OFCCP believes that affected contractors may dispute the request under Freedom of Information Act Exemption 4. The exemption states that organizations do not have to disclose the requested information if doing so would impact a company’s privileged or confidential commercial, or financial information, and/or would reveal trade secrets.
As to whether an organization can prove that the disclosure of the information contained in the annual EEO-1 report is one of the aforementioned criteria is entirely up to how they approach the situation.
Federal contractors have until September 19, 2022, to submit their objection statements for why the OFCCP should not disclose their EEO-1 reports. In objective statements, organizations should outline:
- What specific information contained in the EEO-1 report could be considered a trade secret, commercial, or financial in nature
- Why is the information contained in the EEO-1 report a trade secret, commercial, or financial, and what supporting facts prove this
- Is the information contained in the EEO-1 report typically kept confidential and if so, what process does the organization take to ensure that it’s kept private
- If the organization believes that the government provided confidentially, express or implied assurance, during the EEO-1 submission process, or the opposite, that upon submission the government indicated the information would be disclosed
- How the disclosure of the EEO-1 report would harm the business
Following the submission, the OFCCP will send written notice to the organization informing them of its decision to accept or reject the objection statement. In addition, the notice will also inform contractors of new timeframes for either obtaining counsel, if organizations choose to do so, as well as a new date for when the EEO-1 report information will be publicly shared.
In the age of transparency, many organizations voluntarily disclose the type of information included in the EEO-1 report. Federal contractors that have actively engaged in this will not be eligible for exemption and will have their information publicly shared.
Preparing for the disclosure
The OFCCP estimates that the number of affected contractors subject to the FOIA request exceeds 15,000, though the number could be significantly greater.
It is possible that non-federal contractors will also be subject to the request thus subsequently having their EEO-1 reports disclosed. The OFCCP often mistakes organizations as federal contractors in its compliance review and scheduling announcement lists, hence demonstrating that non-contractors may also be included in the disclosure.
Accordingly, organizations, whether they’re a federal contractor or not, may be subject to the OFCCP’s EEO-1 report disclosure. So there are no surprises, employers should reach out to the federal agency to confirm whether the request applies to them or not.
Of course, EEO-1 reporting and pay equity auditing firms like Trusaic can handle this correspondence for you, in addition to preparing any objections. Trusaic can also help you organize, consolidate, and understand your workforce data so that for future EEO-1 report submissions, you can be confident about what you’re submitting, before submitting it.
Recent OFCCP activity
OFCCP’s recent announcement is not surprising. The agency has made enhancing diversity, equity, inclusion, and pay equity a priority since the Biden administration took office.
In fact, the day before the OFCCP issued the warning notifying federal contractors of the potential disclosure of EEO-1 reports, the agency released the revised Directive 2022-01, which confirms the value and necessary process of performing pay equity audits.
In the revised directive, the agency makes clear that it “promotes greater contractor attention to federal contractors’ long-standing obligation to analyze compensation systems and document compliance,” according to the Department of Labor.
“The revised Directive clarifies its guidance and explains that in order to determine that a contractor has satisfied its obligation to conduct a compensation analysis, OFCCP requires certain documentation to demonstrate compliance.”
The agency has recently made pay equity and workplace equality a top priority. And prior to the release of the recent documents, OFCCP Director Jenny R. Yang said federal contractors must conduct pay equity audits annually.
So, in the big picture, the OFCCP notice to disclose EEO-1 report data is part of the larger theme of transparency in the workplace. It’s not the agency’s first initiative the agency and it’s most certainly not the last.
Federal contractor or not, organizations facing challenges in keeping up with the evolving transparency initiatives should consider partnering with a leader in pay equity and DEI analytics.
Trusaic’s PayParity pay equity software provides always-on analytics so you can understand your workforce composition and representation. The reporting functionality allows you to create multiple projects so that you can tailor your information to meet the needs of specific reports, including the annual EEO-1 filing.
For more information on the importance of transparency in the workplace, download our research report, Creating a Culture of Diversity, Equity, and Inclusion, conducted by the Harvard Business Review.
If your organization needs assistance achieving its DEI goals, check out our professional consulting services and DEI software, PayParity.