Legal ComplianceLegal Compliance

MANA 5341MANA 5341

Staffing and Performance Staffing and Performance ManagementManagement

Major Staffing LawsMajor Staffing LawsClassifying EmployeesClassifying Employees

FLSA and Internal Revenue CodeFLSA and Internal Revenue Code

Equal OpportunityEqual Opportunity Civil Rights Acts (1964 and 1991) Civil Rights Acts (1964 and 1991) ADA and ADEAADA and ADEA

Affirmative ActionAffirmative Action Executive Order 11246Executive Order 11246

ImmigrationImmigration Immigration Reform and Control ActImmigration Reform and Control Act

Wages and BenefitsWages and Benefits Equal Pay ActEqual Pay Act

Many others….Many others….

Classifying EmployeesClassifying Employees

““Flexible” employment practices have Flexible” employment practices have risen sharply last 10-15 years.risen sharply last 10-15 years.

1.1. Independent ContractorsIndependent Contractors

2.2. FLSA (Salaried vs. Hourly)FLSA (Salaried vs. Hourly)

3.3. Temporary EmployeesTemporary Employees

What is an Independent Contractor?What is an Independent Contractor?

An employer does not generally have to withhold or An employer does not generally have to withhold or pay any taxes on payments to independent pay any taxes on payments to independent contractors.contractors. W2 vs. 1099W2 vs. 1099

General rule: An individual is a contractor if the General rule: An individual is a contractor if the employer controls only the result of the work and employer controls only the result of the work and not the means and methods of accomplishing the not the means and methods of accomplishing the result.result. Behavioral controlBehavioral control Financial controlFinancial control Relationship with firmRelationship with firm

http://www.irs.ustreas.gov/pub/irs-utl/emporind.pdfhttp://www.irs.ustreas.gov/pub/irs-utl/emporind.pdf

IRS ExampleIRS Example Vera Elm, an electrician, submitted a job estimate to a Vera Elm, an electrician, submitted a job estimate to a

housing complex for electrical work at $16 per hour for 400 housing complex for electrical work at $16 per hour for 400 hours. hours. 

She is to receive $1,280 every 2 weeks for the next 10 She is to receive $1,280 every 2 weeks for the next 10

weeks.  This is not considered payment by the hour.  Even weeks.  This is not considered payment by the hour.  Even if she works more or less than 400 hours to complete the if she works more or less than 400 hours to complete the work, Vera will receive $6,400. work, Vera will receive $6,400. 

Vera sets her own schedule but is required to complete the Vera sets her own schedule but is required to complete the

work in 10 weeks subject to inspection upon completion. work in 10 weeks subject to inspection upon completion. She also performs additional electrical installations under She also performs additional electrical installations under contracts with other companies, that she obtained through contracts with other companies, that she obtained through advertisements.  advertisements. 

IRS ExampleIRS Example Vera Elm, an electrician, submitted a job estimate to a housing Vera Elm, an electrician, submitted a job estimate to a housing

complex for electrical work at $16 per hour for 400 hours. complex for electrical work at $16 per hour for 400 hours.  She is to receive $1,280 every 2 weeks for the next 10 weeks.  She is to receive $1,280 every 2 weeks for the next 10 weeks. 

This is not considered payment by the hour.  Even if she works This is not considered payment by the hour.  Even if she works more or less than 400 hours to complete the work, Vera will more or less than 400 hours to complete the work, Vera will receive $6,400. receive $6,400. 

Vera sets her own schedule but is required to complete the Vera sets her own schedule but is required to complete the

work in 10 weeks subject to inspection upon completion. She work in 10 weeks subject to inspection upon completion. She also performs additional electrical installations under contracts also performs additional electrical installations under contracts with other companies, that she obtained through with other companies, that she obtained through advertisements.  advertisements. 

Vera is an Independent ContractorVera is an Independent Contractor

Temporary EmployeesTemporary Employees Temps are employees of an employment agency, not Temps are employees of an employment agency, not

the organization where they work.the organization where they work.

Companies cannot use long-term temporary Companies cannot use long-term temporary employment only to deny benefits to employees.employment only to deny benefits to employees.

Vizcaino vs. Microsoft (1999)Vizcaino vs. Microsoft (1999)Microsoft Corp. will pay $97 million to settle a federal lawsuit Microsoft Corp. will pay $97 million to settle a federal lawsuit

from employees who claimed the software giant classified from employees who claimed the software giant classified them as "temporary" workers for years to deny them them as "temporary" workers for years to deny them standard benefits such as health insurance and the lucrative standard benefits such as health insurance and the lucrative employee stock purchase plan, thereby saving the company employee stock purchase plan, thereby saving the company millions. millions.

Between 8,000 and 12,000 people were eligible for a share of Between 8,000 and 12,000 people were eligible for a share of the settlement.the settlement.

LA Times 12.13.00LA Times 12.13.00

Changes at MicrosoftChanges at Microsoft Guidelines to help managers figure out when a Guidelines to help managers figure out when a

job shouldn't be given to a temporary employee. job shouldn't be given to a temporary employee.

Policy prohibiting temporary employees from Policy prohibiting temporary employees from working more than 12 months at a stretch working more than 12 months at a stretch without taking at least a 100-day break. without taking at least a 100-day break.

Temporary workers wear orange badges instead Temporary workers wear orange badges instead of the blue badges for permanent employees.of the blue badges for permanent employees.

Temporary workers are not permitted to use the Temporary workers are not permitted to use the company health club, play on the company company health club, play on the company baseball and soccer fields or allowed to attend baseball and soccer fields or allowed to attend company parties.company parties.

Fair Labor Standards Act (FSLA)Fair Labor Standards Act (FSLA) Passed in 1938 and amended many timesPassed in 1938 and amended many times

Nonexempt workers earn a minimum wage of not less than Nonexempt workers earn a minimum wage of not less than $5.15 an hour, effective September 1, 1997. $5.15 an hour, effective September 1, 1997.

Overtime pay at not less than one and one-half times Overtime pay at not less than one and one-half times regular pay is required after 40 hours a workweek.regular pay is required after 40 hours a workweek.

An employee must be at least 16An employee must be at least 16 years old to work in most years old to work in most non-farm jobs and at leastnon-farm jobs and at least 1818 to work in non-farm jobs to work in non-farm jobs declared hazardous by the Secretary of Labor. declared hazardous by the Secretary of Labor.

Youths 14Youths 14 and 15and 15 years old may work outside school hours years old may work outside school hours in various non-manufacturing, non-mining, non-hazardous in various non-manufacturing, non-mining, non-hazardous jobs under certain conditions jobs under certain conditions

New Overtime RulesNew Overtime Rules First major change to FSLA in 50 years.First major change to FSLA in 50 years.

http://www.dol.gov/esa/regs/compliance/whd/fairpay/http://www.dol.gov/esa/regs/compliance/whd/fairpay/

In 2003 record $212.5 million in back wages was In 2003 record $212.5 million in back wages was collected from employers – a 20% increase from 2002. collected from employers – a 20% increase from 2002.

RadioShack will pay $29.9 million in unpaid overtime RadioShack will pay $29.9 million in unpaid overtime claims of 1,300 managers in California. Similar suits at claims of 1,300 managers in California. Similar suits at Eckerd, Starbucks, and Farmer’s InsuranceEckerd, Starbucks, and Farmer’s Insurance

U-Haul suit by 1,200 managers was dismissed due to U-Haul suit by 1,200 managers was dismissed due to substantial evidence that the supervisors "spend the substantial evidence that the supervisors "spend the majority of their time performing exempt managerial majority of their time performing exempt managerial tasks"tasks"

To be exempt from FLSA:To be exempt from FLSA: Salary Basis Test Salary Basis Test

Be paid a salaryBe paid a salary Salary Level TestSalary Level Test

Earn a minimum of $23,660/yr (old $8060/yr)Earn a minimum of $23,660/yr (old $8060/yr) White collar workers who earn more than $100k are White collar workers who earn more than $100k are

exemptexempt Blue collar workers “skilled trades” are NOT exempt Blue collar workers “skilled trades” are NOT exempt

““Duties” TestDuties” Test ““Administrative” Administrative” ““Professional” Professional” ““Executive”Executive” ““Outside Sales” Outside Sales” ““An employee who leads a team of other employees An employee who leads a team of other employees

assigned to complete major projects”assigned to complete major projects”

““Administrative Duties”Administrative Duties”

Whose Whose primary dutyprimary duty (50%) is the (50%) is the performance of office or non-manual work performance of office or non-manual work directly related to thedirectly related to the management or management or general business operationsgeneral business operations of the of the employer or the employer or the employer’s customersemployer’s customers; ; andand

Whose primary duty includes the exercise Whose primary duty includes the exercise of of discretion and independent judgmentdiscretion and independent judgment with respect to matters of significance.with respect to matters of significance.

FSLA – Special CasesFSLA – Special Cases Tipped employeesTipped employees Domestic service workers Domestic service workers Teachers and administrative personnel in elementary and secondary Teachers and administrative personnel in elementary and secondary

schoolsschools Outside sales employeesOutside sales employees Employees in certain computer-related occupations Employees in certain computer-related occupations Employees of certain seasonal amusement or recreational Employees of certain seasonal amusement or recreational

establishmentsestablishments Employees engaged in fishing operationsEmployees engaged in fishing operations Employees engaged in newspaper deliveryEmployees engaged in newspaper delivery Farm workers Farm workers Casual babysitters Casual babysitters Certain commissioned employees of retail or service establishmentsCertain commissioned employees of retail or service establishments Employees of railroads and air carriersEmployees of railroads and air carriers Taxi drivers Taxi drivers NursesNurses Announcers of certain non-metropolitan broadcasting stationsAnnouncers of certain non-metropolitan broadcasting stations Employees of motion picture theaters Employees of motion picture theaters Employees of certain bulk petroleum distributorsEmployees of certain bulk petroleum distributors Many others….Many others….

What are the differences between:What are the differences between:

DiversityDiversity

Equal Employment OpportunityEqual Employment Opportunity

Affirmative Action?Affirmative Action?

EEO LawsEEO Laws

Title VII of the Civil Rights Act 1964Title VII of the Civil Rights Act 1964 Civil Rights Act of 1991Civil Rights Act of 1991

Age Discrimination in Employment Act of Age Discrimination in Employment Act of 19671967

Americans with Disabilities Act of 1990 Americans with Disabilities Act of 1990 (ADA) (ADA)

Protected GroupsProtected Groups

RaceRace ColorColor ReligionReligion SexSex National originNational origin

AgeAge DisabilityDisability

Civil Rights Act of 1964 Title VII Civil Rights Act of 1964 Title VII

(a) It shall be an unlawful employment practice for an employer – (a) It shall be an unlawful employment practice for an employer –

(1) to fail or refuse to hire or to discharge any individual, or (1) to fail or refuse to hire or to discharge any individual, or

otherwise to discriminate against any individual with respect to otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, employment, because of such individual's race, color, religion, sex, or national origin; or sex, or national origin; or

(2) to limit, segregate, or classify his employees or applicants for (2) to limit, segregate, or classify his employees or applicants for

employment in any way which would deprive or tend to deprive employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such adversely affect his status as an employee, because of such individual's race, color, religion, sex, or national origin. individual's race, color, religion, sex, or national origin.

Civil Rights Act of 1964 Title VII Civil Rights Act of 1964 Title VII

(a) It shall be an unlawful employment practice for an employer – (a) It shall be an unlawful employment practice for an employer –

DISPARATE TREATMENTDISPARATE TREATMENT(1) to fail or refuse to hire or to discharge any individual, or (1) to fail or refuse to hire or to discharge any individual, or

otherwise to discriminate against any individual with respect to otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, employment, because of such individual's race, color, religion, sex, or national origin; or sex, or national origin; or

ADVERSE IMPACTADVERSE IMPACT(2) to limit, segregate, or classify his employees or applicants for (2) to limit, segregate, or classify his employees or applicants for

employment in any way which would deprive or tend to deprive employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such adversely affect his status as an employee, because of such individual's race, color, religion, sex, or national origin. individual's race, color, religion, sex, or national origin.

Court CasesCourt Cases Griggs v. Duke PowerGriggs v. Duke Power (1971) (1971)

McDonnell Douglas vs. GreenMcDonnell Douglas vs. Green (1972) (1972)

Connecticut vs. TealConnecticut vs. Teal (1982) (1982)

Watson vs. Ft. Worth Bank & TrustWatson vs. Ft. Worth Bank & Trust (1988) (1988)

Rudder vs. District of Columbia Rudder vs. District of Columbia (1995)(1995)

Court CasesCourt Cases

Griggs v. Duke PowerGriggs v. Duke Power (1971) (1971) Adverse impacts must be job relatedAdverse impacts must be job related Discriminatory intent not sufficient defenseDiscriminatory intent not sufficient defense

McDonnell Douglas vs. GreenMcDonnell Douglas vs. Green (1972) (1972) To establish To establish prima faciaprima facia in disparate treatment cases in disparate treatment cases

Connecticut vs. TealConnecticut vs. Teal (1982) (1982) Applies to each parts of a multi-step processApplies to each parts of a multi-step process

Watson vs. Ft. Worth Bank & TrustWatson vs. Ft. Worth Bank & Trust (1988) (1988) Adverse impact applied to interviewsAdverse impact applied to interviews

Rudder vs. District of Columbia Rudder vs. District of Columbia (1995)(1995) Affirm job analysis and content validity of testsAffirm job analysis and content validity of tests

Civil Rights Act of 1991Civil Rights Act of 1991

Followed Followed Wards Cove Packing vs. AntonioWards Cove Packing vs. Antonio (1989) (1989) Prohibits “race norming” of tests.Prohibits “race norming” of tests. Plaintiffs can sue for punitive damages in cases of Plaintiffs can sue for punitive damages in cases of

intentional discrimination.intentional discrimination. Adverse impact prohibited for each piece of a Adverse impact prohibited for each piece of a

selection system.selection system. Burden of proof on the employer.Burden of proof on the employer. Prohibits quotas in selection.Prohibits quotas in selection.

EEO Applied EEO Applied

Organizations with more than 15 employees.Organizations with more than 15 employees. Uniform Guidelines Uniform Guidelines onon Employee Selection ProceduresEmployee Selection Procedures

http://www.dol.gov/dol/allcfr/Title_41/Part_60-3/toc.htmhttp://www.dol.gov/dol/allcfr/Title_41/Part_60-3/toc.htm Principles for Validation and use Principles for Validation and use of Employee Selection of Employee Selection

ProceduresProcedures

http://www.siop.org/_Principles/principles.pdfhttp://www.siop.org/_Principles/principles.pdf EEO does NOT require preferential treatment EEO does NOT require preferential treatment Quotas are illegal by Civil Rights Act of 1991Quotas are illegal by Civil Rights Act of 1991 Must keep records of applicants for 6 monthsMust keep records of applicants for 6 months

EEO Applied EEO Applied Employer must show practices are “job-related for Employer must show practices are “job-related for

the position in question and consistent with the position in question and consistent with business necessity”business necessity”

Company DefensesCompany Defenses MeritMerit Bona Fide Occupational QualificationBona Fide Occupational Qualification Business NecessityBusiness Necessity

An “alternative employment practice” must be An “alternative employment practice” must be accepted if shown to meet the business necessity accepted if shown to meet the business necessity and have less adverse impact. and have less adverse impact.

Presentation of EvidencePresentation of Evidence

Must prove that rejection Must prove that rejection was discriminatory.was discriminatory.PlaintiffPlaintiff

Provides a clear and Provides a clear and specific job‑based specific job‑based explanation for actions.explanation for actions.

DefendantDefendant

He or She demonstrates: He or She demonstrates: a) Protected class a) Protected class b) Was qualified b) Was qualified c) Was rejected c) Was rejected d) The job remained opend) The job remained open

““McDonnell-Douglas McDonnell-Douglas Test”Test”

PlaintiffPlaintiff

Disparate TreatmentDisparate Treatment

Demonstrates Job Demonstrates Job relatedness (validity) and relatedness (validity) and business necessitybusiness necessity

Proves that an alternative Proves that an alternative practice is available that practice is available that has less adverse impacthas less adverse impact

4/5’ths Rule4/5’ths Rule

Standard Deviations RuleStandard Deviations Rule

Adverse ImpactAdverse Impact

Std. Dev. RULEStd. Dev. RULE Number selected needs to be within +(-) 2 standard Number selected needs to be within +(-) 2 standard deviation units from the “expected” case.deviation units from the “expected” case.

% Minority applicants X % Minority applicants X % NonMinority applicants% NonMinority applicants X # X # SelectedSelected

4/5ths RULE4/5ths RULE The selection rate for any protected group should be no less The selection rate for any protected group should be no less than 4/5ths or 80% of the selection rate for the group with the highest rate than 4/5ths or 80% of the selection rate for the group with the highest rate of selection. If SR1 *.8 > SR2, then Adverse Impact.of selection. If SR1 *.8 > SR2, then Adverse Impact.

Number Hired Number Hired Selection Rate (SR) =Selection Rate (SR) =

Number of ApplicantsNumber of Applicants

Selection Rate TestsSelection Rate Tests

S.D.=S.D.=

4/5ths Rule4/5ths Rule

Assume 200 employees were selected from a pool of 500 Assume 200 employees were selected from a pool of 500 applicants (200 black and 300 white). Of the applicants (200 black and 300 white). Of the employees selected 60 were black and 140 were white.employees selected 60 were black and 140 were white.

Selection Rates:Selection Rates:

White = 140 / 300 = 46.7%White = 140 / 300 = 46.7%

Black = 60 / 200 = 30%Black = 60 / 200 = 30%

4/54/5thsths Rule: .467 X .8 = .374 = 37.4% Rule: .467 X .8 = .374 = 37.4%

Since 30% (actual selection rate) is less than 37.4% Since 30% (actual selection rate) is less than 37.4% (4/5ths (4/5ths

comparison selection rate) evidence of discrimination comparison selection rate) evidence of discrimination exists.exists.

200200 300 300 X X 200X X 200

500500 500 500

Std. Deviation RuleStd. Deviation Rule

Assume 200 employees were selected from a Assume 200 employees were selected from a pool of 500 applicants (200 black and 300 pool of 500 applicants (200 black and 300 white).white).

# of Minority Applicants # of Non Applicants# of Minority Applicants # of Non Applicants XX X # Selected X # Selected

# of Applicants# of Applicants # of Applicants # of Applicants

S.D.=S.D.=

S.D.=S.D.=

== .4 X .6 X .4 X .6 X 200200

= 6.92= 6.92

Std. Deviation RuleStd. Deviation Rule Overall selection rate = 40% (200 out of 500)Overall selection rate = 40% (200 out of 500)

If blacks were selected at the same rate as whites If blacks were selected at the same rate as whites we would expect:we would expect:

200 X .4 = 80 Blacks 200 X .4 = 80 Blacks 300 X .4 = 120 Whites300 X .4 = 120 Whites

Std. Rule states that the actual number selected Std. Rule states that the actual number selected should be within +/- 2 Std. Deviations from the should be within +/- 2 Std. Deviations from the expected number.expected number.

S.D. = 6.93 or “7” 2 S.D. = 14S.D. = 6.93 or “7” 2 S.D. = 14

Target Range for Blacks: 80 +/- 14 = 66 to 94Target Range for Blacks: 80 +/- 14 = 66 to 94According to this, if fewer than 66 out of 200 were According to this, if fewer than 66 out of 200 were selected, then evidence of discrimination exists.selected, then evidence of discrimination exists.

Wal-Mart, employs 1.3 million workers at Wal-Mart, employs 1.3 million workers at roughly 3,522 Wal-Mart and Sam's Clubs.roughly 3,522 Wal-Mart and Sam's Clubs.

Certified as a class: 1.6 million women who Certified as a class: 1.6 million women who worked for Wal-Mart's U.S. stores at any time worked for Wal-Mart's U.S. stores at any time since Dec. 26, 1998. since Dec. 26, 1998.

Women comprise over 72% of Wal-Mart's Women comprise over 72% of Wal-Mart's sales workforce and less than 33% of its sales workforce and less than 33% of its managers. managers.

““Wal-Mart's Women Troubles”Wal-Mart's Women Troubles”

The Plaintiff’s CaseThe Plaintiff’s Case

TitleTitle %Women %Women %Men%Men

Store Store managermanager 14.3%14.3% 85.7%85.7%

Co-managerCo-manager 22.80%22.80% 77.2%77.2%

Asst. Asst. managermanager 35.7%35.7% 64.3%64.3%

Mgt. traineeMgt. trainee 41.3%41.3% 58.7%58.7%

CashierCashier 92.5%92.5% 7.5%7.5%

Source: Drogin Kakigi & Assoc.Source: Drogin Kakigi & Assoc.

Wal-Mart’s Defense Wal-Mart’s Defense

Wal-Mart says it classifies management positions Wal-Mart says it classifies management positions differently from its competitors. For example, it says differently from its competitors. For example, it says department "managers" are not included in the count of department "managers" are not included in the count of managers because they are not salaried positions. managers because they are not salaried positions.

"If we included these, our overall percentage would "If we included these, our overall percentage would probably be close to 50%," the company says. probably be close to 50%," the company says.

Wal-Mart men average higher seniority and are more Wal-Mart men average higher seniority and are more willing to relocate.willing to relocate.

ADEA (1967) and Age DiscriminationADEA (1967) and Age Discrimination Age Discrimination in Employment Act of 1967Age Discrimination in Employment Act of 1967

Protects employees 70 million workers over 40 Protects employees 70 million workers over 40 Nearly 50% of workersNearly 50% of workers

Cases most often arise from layoff or dismissalCases most often arise from layoff or dismissal It is legitimate to consider salary in layoffsIt is legitimate to consider salary in layoffs No standard of “reverse discrimination” for age suitsNo standard of “reverse discrimination” for age suits

Disparate impact rules applyDisparate impact rules apply Adams vs. Florida Power CorpAdams vs. Florida Power Corp

Dismissed by the Supreme Court 2002Dismissed by the Supreme Court 2002 Smith vs. City of JacksonSmith vs. City of Jackson

Affirmed by the Supreme Court 2005Affirmed by the Supreme Court 2005

Discrimination is prohibited against Discrimination is prohibited against individuals with disabilitiesindividuals with disabilities who can perform who can perform essential job functionsessential job functions with with reasonable reasonable accommodationaccommodation unless it would cause unless it would cause undue undue hardshiphardship..

Employers not required to change work rules if they Employers not required to change work rules if they are business necessity.are business necessity.

OFCCP vs. Ozark Airlines (1986) – employers must OFCCP vs. Ozark Airlines (1986) – employers must prove applicant could not perform the job safely.prove applicant could not perform the job safely.

Americans with Disabilities Act (ADA)Americans with Disabilities Act (ADA)

Disability is a physical or mental impairment Disability is a physical or mental impairment that affects a major life activity.that affects a major life activity.

Essential vs. marginal job functionsEssential vs. marginal job functions

Categories of "reasonable accommodations":Categories of "reasonable accommodations": changes to a job application process changes to a job application process changes to the work environmentchanges to the work environment changes to the way a job is usually done changes to the way a job is usually done employee trainingemployee training

Americans with Disabilities Act (ADA)Americans with Disabilities Act (ADA)

““Undue hardship” means significant difficulty or Undue hardship” means significant difficulty or expense.expense. Not only financial difficultyNot only financial difficulty Those that would fundamentally alter the nature or Those that would fundamentally alter the nature or

operation of the business.operation of the business.

Every request for reasonable accommodation should Every request for reasonable accommodation should be evaluated separately taking into account:be evaluated separately taking into account: Nature and cost of the accommodation neededNature and cost of the accommodation needed Overall financial resources of the businessOverall financial resources of the business Number of persons employed by the businessNumber of persons employed by the business Impact of the accommodation on the businessImpact of the accommodation on the business

Undue HardshipUndue Hardship

Record KeepingRecord Keeping EEOC requires that employers keep all EEOC requires that employers keep all

personnel records for one year after personnel records for one year after termination.termination.

Written descriptions of benefits plans (such Written descriptions of benefits plans (such as pensions) and any seniority or merit as pensions) and any seniority or merit system.system.

Fair Labor Standards Act (FLSA) and the Fair Labor Standards Act (FLSA) and the Equal Pay Act, require employers to keep Equal Pay Act, require employers to keep payroll records for at least three years. payroll records for at least three years.

All records relevant to wages including All records relevant to wages including wage rates, job evaluations, and seniority wage rates, job evaluations, and seniority and merit systems.and merit systems.

Employment Information Report (EEO-1)Employment Information Report (EEO-1)

EEO-1 survey is authorized by Title VII and EEO-1 survey is authorized by Title VII and the Equal Employment Opportunity Act of the Equal Employment Opportunity Act of 1972. 1972.

All employers with 15 or more employees All employers with 15 or more employees are required to keep employment records as.are required to keep employment records as.

Employers are required to file an EEO-1 Employers are required to file an EEO-1 report on an annual basis if they:report on an annual basis if they: Employ 100 or more employees Employ 100 or more employees Employ 50 or more employees and have Federal Employ 50 or more employees and have Federal

contracts totaling $50,000 or more. contracts totaling $50,000 or more.

EEO vs. Affirmative ActionEEO vs. Affirmative Action

Equal Employment OpportunityEqual Employment Opportunity Collection of laws that apply to all organizationsCollection of laws that apply to all organizations Aimed at ending discriminationAimed at ending discrimination

Affirmative ActionAffirmative Action Executive Order 11246Executive Order 11246 Applies Applies onlyonly to (1) government and contractors to (1) government and contractors

over $10,000 (2) court orders and (3) voluntary over $10,000 (2) court orders and (3) voluntary programs.programs.

NO affirmative action requirements for others.NO affirmative action requirements for others. Written document with targets for minority hiring.Written document with targets for minority hiring.

Enforcement AgenciesEnforcement Agencies

Equal Employment Opportunity Commission (EEOC)Equal Employment Opportunity Commission (EEOC) All private employers with more than 15 employeesAll private employers with more than 15 employees

EEO – 1 for more than 100 employeesEEO – 1 for more than 100 employees

Office Of Federal Contract Compliance Programs Office Of Federal Contract Compliance Programs (OFCCP)(OFCCP)

Government contractors or sub-contractors.Government contractors or sub-contractors.

Covers approximately 26 million or nearly 22% of the total Covers approximately 26 million or nearly 22% of the total civilian workforce. civilian workforce.

OFCCP requires a contractor to engage in a self-analysis for OFCCP requires a contractor to engage in a self-analysis for the purpose of discovering any barriers to equal the purpose of discovering any barriers to equal employment opportunity.employment opportunity.

Investigates complaints of discrimination.Investigates complaints of discrimination.

Affirmative Action Program (AAP)Affirmative Action Program (AAP)

Develop a written program for each establishment Develop a written program for each establishment

Identify potential problems in the participation and Identify potential problems in the participation and utilization of women and minorities.utilization of women and minorities.

Gives the specific procedures and the good faith Gives the specific procedures and the good faith efforts to provide equal employment opportunity.efforts to provide equal employment opportunity.

If there is underutilization, provides gives targets If there is underutilization, provides gives targets (not hard quotas) and timetables.(not hard quotas) and timetables.

Expanded efforts in outreach, recruitment and Expanded efforts in outreach, recruitment and training. training.

AAP StatisticsAAP Statistics

Flow StatisticsFlow Statistics Examines selection rates by groupExamines selection rates by group 4/5 th’s rule / Std. Deviation Rule4/5 th’s rule / Std. Deviation Rule

Availability and utilization analysesAvailability and utilization analyses Employee distribution compared with local populationEmployee distribution compared with local population ““Stock Statistics”Stock Statistics”

Concentration StatisticsConcentration Statistics Examining placement of women and minorities by job Examining placement of women and minorities by job

categorycategory

Availability AnalysisAvailability AnalysisU.T. System determines minority availability by: U.T. System determines minority availability by: The minority population in the surrounding labor The minority population in the surrounding labor

market. market. The minority unemployment rate in the surrounding The minority unemployment rate in the surrounding

labor market. labor market. The percentage of the minority workforce as The percentage of the minority workforce as

compared with the total workforce in the surrounding compared with the total workforce in the surrounding labor market and Texas. labor market and Texas.

The availability of promotable and transferable The availability of promotable and transferable minorities within U. T. System Administration. minorities within U. T. System Administration.

http://www.eeoc.gov/stats/jobpat/2000/pmsa/2800.htmlhttp://www.eeoc.gov/stats/jobpat/2000/pmsa/2800.html

http://www.census.gov/hhes/www/eeoindex.htmlhttp://www.census.gov/hhes/www/eeoindex.html

Utilization AnalysisUtilization Analysis

Compares the % Compares the % percentage of minorities percentage of minorities and women in each Job and women in each Job Group with the Group with the calculated % availability calculated % availability of minorities and of minorities and women. women.

"Underutilized" is "Underutilized" is defined as having fewer defined as having fewer than would reasonably than would reasonably be expected by their be expected by their availability. availability.

Job Category: Job Category:

Management TraineeManagement Trainee

Current Current TraineesTrainees

AvailabilityAvailability

Non Non MinoritMinorit

yy

MinoritMinorityy

Non Non MinoritMinorit

yy

MinoritMinorityy

90%90% 10%10% 70%70% 30%30%

Concentration StatisticsConcentration Statistics

0%10%20%30%40%50%60%70%80%90%

100%

Men Women

Executives

Managers

Supervisors

Technicians

Staff

Admin Asst.

This all means….This all means….

Make sure that selection criteria are fair.Make sure that selection criteria are fair. Use validated selection tests.Use validated selection tests. Use the same procedure for all applicants.Use the same procedure for all applicants. Collect data and keep records.Collect data and keep records. Only ask job-related questions.Only ask job-related questions. No medical exams before making job No medical exams before making job

offers.offers. No business is ever required to hire No business is ever required to hire

someone not qualified for a job.someone not qualified for a job.

How to Proceed?How to Proceed?

What can companies do to navigate the What can companies do to navigate the differences between targets and differences between targets and preferences (which are legal) vs. quotas preferences (which are legal) vs. quotas and reverse discrimination (which are and reverse discrimination (which are illegal)?illegal)?