In a world where change seems to be everywhere, it is reassuring to know there are a few things that are constants. The sun rises in the east and sets in the west. Traffic will be congested when driving in a major city during rush hour. The federal government will issue regulations and some people will be unhappy about these regulations.
While people are also in a constant state of change, something we traditionally understood was that people couldn’t change their race and their gender. You could count on the fact that if someone was born white and male, they would remain white and male for the rest of their lives. We had come to understand that some small part of the population might undergo gender reassignment surgery, but that the person who has undergone such surgery would ultimately be considered either male or female.
Then I started watching the television show “Billions,” which features a character played by Asia Kate Dillon. This character is a young prodigy working at a fictitious hedge fund called Axe Capital. Like some other viewers, I struggled to understand whether Asia Kate was playing a male or a female character, and whether Asia Kate was supposed to be transsexual or asexual or something else entirely. We finally learned that the character is considered to be “non-binary.” The character’s identity is not tied to being either male or female. This was a new idea for me and, I suspect, many viewers, and it made for an interesting understanding of the character and an introduction to a new world of how viewers could think about sexuality and sexual identity.
In real life, Asia Kate Dillon also identifies as non-binary, and uses pronouns such as “they” and “them” as self-reference points. This will require interesting choices should Asia Kate be nominated for an Emmy for the work on “Billions.” It also requires interesting choices as we begin to think about what it means to define applicants and employees as male or female.
EEOC and OFCCP Require Demographic Reporting on Employees
I have written extensively about the surveying that employers are required to do for federal regulatory purposes. The Equal Employment Opportunity Commission (EEOC) requires the annual submission of the EEO-1 report, a report which captures data on the race, ethnicity, and sex of employees. The U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) requires the annual completion of affirmative action plans that include reports on the race, ethnicity, sex, protected veteran status, and disability status of applicants and employees. In order to provide EEOC and OFCCP what they require, employers must survey employees (and in OFCCP’s case, applicants) about various demographic statuses.
While the reporting required by EEOC and OFCCP appears to be relatively straight-forward on its face, this reporting has always been built on a series of assumptions. One of these assumptions is that people fall into either the category “male” or “female” when reporting on sex. Another assumption is that people fall into some defined race or ethnicity. As we shall see, these assumptions are proving to be problematic in the new world of demographics. 1
Reporting on Sex
While reporting on race and ethnicity has become more complex over the last number of years for reasons we will explore below, at least employers could feel like they understood requirements in regard to reporting on sex. EEOC requires that employers show each employee as either male or female in the annual EEO-1 report. OFCCP requires that federal contractors and subcontractors show each employee as male or female in the organizational profile, job group analysis, and other statistical reports required in affirmative action plans prepared to comply with Executive Order 11246.
While EEOC has no formal requirement that employers collect race and ethnicity information on applicants, OFCCP has a long-standing requirement that federal contractors and subcontractors collect information on the sex of applicants. The Code of Federal Regulations (CFR) has the following provision at 41 CFR 60-1.12(c):
(1) For any record the contractor maintains pursuant to this section, the contractor must be able to identify: (i) The gender, race, and ethnicity of each employee; and (ii) Where possible, the gender, race, and ethnicity of each applicant.
This means that federal contractors and subcontractors must have valid information on the sex of employees, and must make an attempt to gather information on the sex of applicants. If applicants refuse to self-identify their sex, OFCCP allows federal contractors and subcontractors to appear in reports on applicants with a sex of “unknown.” However, if applicants do pick a known value, they must self-identify as either male or female. 2
Both EEOC and OFCCP have made no allowance for having employees with an unknown sex. The section of the Code of Federal Regulations noted above allows for applicants of unknown sex, but it says that federal contractors and subcontractors must be able to identify the sex of each employee. The EEO-1 report similarly has no provision for employers to indicate that the sex of an employee is unknown.
Issues Regarding Reporting on Sex
In the last few years, both EEOC and OFCCP have shown an interest in preventing discrimination against applicants and employees based on gender identity. There is growing understanding that an individual can be anatomically male or female (i.e. that a person can have a defined “sex”) while not identifying with that anatomy (i.e. that a person can have a “gender identity” different than their anatomical sex). However, neither EEOC nor OFCCP has done anything to recognize this difference between “sex” and “gender” (or “gender identity”) in the reporting that is required of employers. Employees must be categorized as either “male” or “female,” and applicants must be categorized as “male” or “female” or “unknown.” EEOC and OFCCP allow applicants and employees to self-identify sex, and thus a person who is anatomically one sex could self-identify as the other sex. When an employee fails to self-identify, though, employers are left to use visual identification or some other method to determine the sex of their employees.
Into this mix comes the idea that some persons want to be considered “gender neutral” or “non-binary.” The March 27, 2017 issue of Time magazine had a lengthy article which discussed the fact that there are a growing number of Americans who do not wish to be classified as one sex. Instead, they consider themselves “gender fluid,” existing either outside of the traditional classifications of male and female or existing along a continuum that includes the traditional classification of male and female at either end of the spectrum. For employers who are required to report on the sex of employees, the idea that an employee may consider themselves to be male one day, female the next, and neither male nor female on a third day can be very daunting.
Reporting on Race and Ethnicity
As with identifying sex, in the past many employers would have considered it relatively simple to know what type of demographic information should be collected from applicants and employees on race and ethnicity. For years, EEOC and OFCCP asked employers to report on the race of employees within one of the following five categories:
- American Indian (including Alaskan Natives)
- Asian (including Pacific Islanders)
- Hispanic (including persons of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish origin or culture regardless of race)
Things began to change in 2007 when EEOC modified the EEO-1 report. Employers were asked to report whether employees were Hispanic or Latino, which is considered to be an ethnicity and not a race. If employees were not Hispanic or Latino, they were to be included in one of the following race categories:
- White – A person having origins in any of the original peoples of Europe, the Middle East, or North Africa.
- Black or African American – A person having origins in any of the black racial groups of Africa.
- Native Hawaiian or Other Pacific Islander – A person having origins in any of the peoples of Hawaii, Guam, Samoa, or other Pacific Islands.
- Asian – A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian Subcontinent, including, for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, and Vietnam.
- American Indian or Alaska Native – A person having origins in any of the original peoples of North and South America (including Central America), and who maintain tribal affiliation or community attachment.
- Two or More Races – All persons who identify with more than one of the above five races.
OFCCP has never modified its regulations to correspond to EEOC’s revised race and ethnicity categories. However, OFCCP issued a directive in 2008 stating that federal contractors and subcontractors would not be cited for using EEOC’s revised race and ethnicity categories in the reporting found in their affirmative action plans.
As is the case with the sex of employees, EEOC and OFCCP make no allowance for having employees with an unknown race/ethnicity. The section of the Code of Federal Regulations noted above allows for applicants of unknown race or ethnicity in reporting to OFCCP, but it says that employers must be able to identify the race and ethnicity of each employee. The EEO-1 report similarly has no provision for employers to indicate that the race/ethnicity of an employee is unknown, and EEOC has posted a statement indicating that on the EEO-1 report, “All employees must be accounted for. There are no “OTHER” or “UNKNOWN” race/ethnicity categories.” 3
Issues Regarding Reporting on Race and Ethnicity
There are so many issues associated with the manner in which EEOC and OFCCP require reporting on race and ethnicity that it is difficult to choose the most prominent. However, a simple start to any discussion about race and ethnicity involves the fact that many people do not place themselves into one race or ethnicity. EEOC recognized this fact when it added the category “Two or more races” to the EEO-1 report in 2007. Even this addition, though, does not reflect the way in which many people think about race and ethnicity. For example, there are persons who have raised concerns about the idea that they must report as “Hispanic/Latino” or “Not Hispanic/Latino.” Some persons who might fall into the category “Hispanic/Latino” also have strong cultural or genealogical identification with one or more of the race categories, and would prefer to identify as BOTH Hispanic AND a member of some race group.
EEOC’s current race categories also create problems.
- The category “White” includes persons of Middle Eastern descent. Middle Easterners have routinely complained about being included in this category when they have limited cultural or genealogical relationship to persons of European descent.
- The category “Black or African American” includes only persons having “origins in any of the black racial groups of Africa.” However, there are non-white people from various geographic areas outside of Africa who identify culturally as Black more than as any other race category.
- The category “Asian” combines persons who have cultural or genealogical roots in two disparate parts of the world: the Eastern part of Asia and the Indian subcontinent. These two groups have not and do not necessarily share the same American experience.
Finally, we come to the category “Two or more races.” This category recognizes a fact that has been true for many years: the United States has a significant (and growing) number of residents whose heritage and genealogy does not belong to one group. However, the category “two or more races” acts as a catch-all for people for whom history and experiences are not necessarily alike in any way. For example, “two or more races” may include a person who has one white parent and one Asian parent. This person’s experiences might be dramatically different than a person who has one African American parent and one Native American parent.
The list of issues above is nowhere near an all-inclusive list of problems associated with EEOC’s race and ethnicity categories. Instead, this list begins to illustrate the idea that we live in a multi-cultural society where people are not easily categorized as being Hispanic or Non-Hispanic, and then falling into one of six simple boxes.
Considerations for Employers
Employers face two countervailing forces: the requirement by regulatory agencies to collect information on race, ethnicity and sex, and the desire by employees to self-identify outside the traditional classifications of race, ethnicity, and gender. There are no easy answers for how employers should deal with these two opposing forces. However, here are a few ideas that employers may want to consider:
- Until EEOC and OFCCP recognize that the world has changed, employers have a regulatory obligation to report a known value regarding the race, ethnicity, and sex of employees. Employers should give employees an opportunity to refuse to self-identify as a particular race, ethnicity, or sex. However, employers will then need to determine how to provide a known value on the race, ethnicity, and sex of employees who fail to self-identify.
- Employers should be sensitive to the fact that employees may have concerns about being required to choose a particular race, ethnicity, or sex. A growing number of employees do not feel as if they fit into the choices made available on race, ethnicity, and sex. Employers should be able to explain why they collect demographic data in the way they do while recognizing the concerns that employees may raise.
- Employers should expect that there will be a growing number of applicants and employees who do not wish to identify in one of the traditional race, ethnicity, and sex categories. A policy or procedure should be established on how to deal with these situations.
- Employers (and employees) should make EEOC and OFCCP aware of concerns that are raised about the inadequacies of the categories that are being used to collect demographic information on applicants and employees.
For me, the most important lesson I’ve learned from thinking about race, ethnicity, and gender is that I need to spend more time watching TV. And if Asia Kate Dillon is reading this, I expect to get a response on how I have no idea what I’m talking about, and how the world is changing faster than I can imagine.
Please note: Nothing in this article is intended as legal advice or as a substitute for any professional advice about your organization’s particular circumstances. All original materials copyright © HR Analytical Services Inc. 2017
1. There are also problematic assumptions made by OFCCP about protected veteran status and disability, but we will leave a discussion about these assumptions for another day.↵
2. Note that there are some situations where OFCCP will typically require federal contractors and subcontractors to show applicants as either male or female. For example, OFCCP expects that applicants who are hired will have a sex of either male or female in reports provided to the agency.↵
3. See https://www.eeoc.gov/employers/eeo1survey/sample_self_identification.cfm↵