With this in mind, you have probably worked to put together a diverse team and hire individuals from varying backgrounds, each bringing an entirely different approach. The importance of a diverse workforce is not just a good idea or recruitment best practice – it is required by law.
The U.S. Equal Employment Opportunity Commission (EEOC) is a federal agency that defends against discrimination on basis of race, colour, nationality, religion, gender, age, disability, genetic information and retaliation for whistleblowing in the workplace.
This includes hiring, firing, promotion, harassment, training, wages and benefits. The EEOC enforces these laws in both the public and private sector. You have done the important part and fostered diversity in your organisation, but that is only part of your responsibility.
Record keeping and maintaining a secure database of information on employees, as well as job applicants, is essential to ensure your compliance with labour regulations – you need to be able to demonstrate your hiring patterns and justify why certain candidates did not make the cut in your hiring process.
The EEOC ensures that organisations foster diversity, equality and workplace rights. Diversity enriches any company and your workforce is likely to reflect this. An inclusive, happy workplace sees greater retention and job satisfaction, so the motivation is clear. If you’re doing everything right when hiring, good job!
Who needs to comply?
While the EEOC protects all employees in all organisations, the responsibility to submit an EEO-1 report falls on the following types of organisations.
Your organisation will be required to file an EEO-1 report annually, if you have 100 or more employees or if employee less than 100 people, but your organisation is owned by or affiliated with another (with a total of over 100 employees). The same goes if you have a contract worth $50,000 or more with the federal government, as well as 50 or more employees.
An organisation with 15 employees or over is covered by EEOC laws. It’s not just issues of workplace discrimination though – recordkeeping is essential to remain compliant. When it comes to the issue of recordkeeping, organisations have a responsibility to retain applications for job postings for one year from the creation of the record or one year after the decision was made on the role.
Organisations that include state and local governments, educational institutions, and federal contractors and subcontractors with 150 or more employees, or with a government contract of $150,000, have a responsibility to retain records for two years. Payroll information should be retained for 3 years.
Furthermore, the mandated EEO-1 report requires that employment and recruiting details are provided. As above, organisations with over 100 employees must submit a report of workforce data. This report assists in the gathering of information about gender, race and age profiles of the workforce, as well as determining if they meet legal requirements. By recording this and automating the process, it takes the effort out of this procedure.
Consequences of non-compliance
Non-compliance with the EEOC results in much more than a slap on the wrist. The organisation is federal and does have the power to sue an organisation that is not keeping in line with their regulations and will defend civil rights of employees.
If a complaint is filed, your organisation would be subject to an investigation by the EEOC. Again, recordkeeping and reporting are a significant part of remaining compliant with these regulations. The inability to produce these records places an organisation in no position to dispute claims of discrimination. It goes without saying, that maintaining your records is in your best interests.
If you you meet the criteria outlined above, but do not submit an EEO-1 report, you may be subject to a lawsuit to force you to report. If you submit incorrect or false information in your report, you face fines or imprisonment.
If you have a federal contract and do not file an EEO-1 report, you run the risk of losing your contract, as well as debarment from future contracts. Furthermore, if you face an accusation of discrimination and the EEOC find you have not filed the necessary EEO-1 report, investigators may see it as necessary to file a lawsuit, so that you do file a report. The perception of your organisation will also be negatively impacted.
If after investigation from the EEOC, the organisation does not have sufficient evidence that your organisation has been compliant, an employee who has filed a complaint may be issued official right to sue by the EEOC. The employee will then have 90 days to file a lawsuit.
Another inevitable result of failure to comply with the EEOC and failure to submit the EEO-1 report is the negative impact on public perception of your organisation. The financial costs of legal action are also considerable.
Diversity is an obvious appeal to candidates, so if you even seem to be non-compliant, you are immediately putting candidates off. The consequences transcend just the legal and financial – the negative PR generated may be irreparable.
How to avoid this?
The first step is obviously taking a zero-tolerance stance towards any form of discrimination and judging individuals purely on their ability to do the job. You are likely to already be hiring a diverse range of employees and doing your utmost to defend their employee rights, so the next important step is to maintain your employee and applicant records.
Simply put, record keeping is the best way of avoiding investigation. Collecting and recording data on applications is what is expected by the EEOC. Recruiting software may quickly become your best friend for accurately and securely recording voluntary applicant info, not in the candidate profile. There’s equity in automation.
Along with collecting data on employees on candidates and applicants, you should retain payroll information for 2 years. You need to be able to explain why you had particular rates of pay. Not only that, but if you have an employee benefits program in place, you need to be able to explain the criteria for this.
When making a decision on the role, always note the reason for disqualification or the reason you chose not to select a candidate, as is required by EEOC regulations. The same goes for job termination – you need to be able to offer a reason for ending someone’s contract with your company and keep record of this for at least one year (ADEA advises that you keep records for 3 years).
As stated already, it is necessary to submit an EEO-1 report annually, as per the criteria stated above. By routinely gathering the necessary information and using recruitment software to help centralise this, it is a straightforward step in the process. EEO-3 Local Union Reports should also be submitted.
Training is one possible option for an organisation, so if you feel that this would be beneficial the EEOC may be able to advise on this.
The EEOC’s requirements for compliance are ultimately defended by law. If the EEOC finds fault with your hiring patterns and you do not have the documentation to back up your choices, your ability to defend your organisation is greatly diminished.
The key here is maintaining good records for the duration required by the EEOC and similar organisations. Using recruiting software is an excellent way of centralising this process. It may seem a little bit labour intensive, to keep records on your hiring patterns, payroll and benefits, but incorporating your recruiting software will take much of the manual work out of the process.
Submitting the reporting required, is the simplest way of avoiding investigation and to keep your recruiting patterns transparent. This will avoid unwarranted investigation and further legal action from either the EEOC or former employees.
The EEOC ensures that organisations foster diversity, equality and workplace rights. Diversity enriches any company and your workforce is likely to reflect this. An inclusive, happy workplace sees greater retention and job satisfaction, so the motivation is clear. By keeping compliant, you are likely to attract a higher calibre of employee and define your organisation’s values to potential candidates.