EEO-1 Reports Can Trigger OFCCP Audits
Private employers with 100 or more employees are required each year to file an EEO-1 report with the Equal Employment Opportunity Commission’s Joint Reporting Committee. 29 C.F.R. § 1602.07. Related entities that constitute a single enterprise who together employ at least 100 employees are also required to file. Generally, the form requires employers to provide summary data as to the gender and race of their workforce in ten broad job categories.
In addition to companies with 100 or more employees, all federal contractors or first-tier subcontractors with 50 or more employees and a single government contract of $50,000.00 or more are also required to file an EEO-1 report. These are the same threshold number of employees and contract amount that triggers a contractor’s or subcontractor’s obligation to develop an affirmative action plan. 41 C.F.R. § 60-2.1.
Section C of the EEO-1 report form inquires as to whether an employer is such a government contractor or subcontractor in its question 3. Employers who are contractors at these thresholds should answer the question by checking the “yes” box. Many times, however, employers who are not government contractors or who do not meet these thresholds rush completion of the EEO-1 form and inaccurately answer this question in the affirmative. Doing so tells the federal government that the company is a government contractor subject to affirmative action plan requirements. It should not then be a surprise if the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) notifies the company that it is scheduling an audit of the company’s affirmative action program.
Takeaway: To avoid miscommunicating government contractor status, employers should carefully complete the annual EEO-1 report.