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GAO report issues recommendations for improved OFCCP, EEOC enforcement in technology sector

November 30th, 2017  |  Cynthia L. Hackerott

Both the EEOC and the OFCCP have taken steps to enforce equal employment and affirmative action requirements in the technology sector, but weaknesses in their enforcement processes hamper the effectiveness of their efforts, a newly released report by the U.S. Government Accountability Office (GAO) concludes. Based on its findings, the GAO issued six recommendations, including that the EEOC develop a timeline to improve industry data collection and that the OFCCP take steps toward requiring more specific minority placement goals by contractors and assess key aspects of its audit selection approach. In response, the EEOC neither agreed nor disagreed with the GAO’s recommendation, and the OFCCP stated the need for regulatory change to alter placement goal requirements.

The 76-page report, dated November 16, 2017, but not publicly released until November 30, examines (1) trends in the gender, racial, and ethnic composition of the technology sector workforce; and (2) EEOC and OFCCP oversight of technology companies’ compliance with equal employment and affirmative action requirements. For the report, the GAO analyzed: (1) workforce data from the American Community Survey for 2005-2015; (2) EEO-1 Report forms for 2007-2015, the latest data available during the analysis period; and (3) OFCCP data on compliance evaluations for fiscal years 2011-2016. It also interviewed agency officials, researchers, and workforce, industry, and company representatives.

The GAO also posted a link to an accompanying podcast.

Tech sector trends. Jobs in the high paying technology sector are projected to grow in coming years, yet, female, Black, and Hispanic workers, comprised a smaller proportion of technology workers compared to their representation in the general workforce from 2005 through 2015, and have also been less represented among technology workers inside the technology sector than outside it. The report found that the estimated percentage of minority technology workers increased from 2005 to 2015, but the GAO found that no growth occurred for female and Black workers, whereas Asian and Hispanic workers made statistically significant increases. Further, female, Black, and Hispanic workers remain a smaller proportion of the technology workforce—mathematics, computing, and engineering occupations—compared to their representation in the general workforce. These groups have also been less represented among technology workers inside the technology sector than outside it. In contrast, Asian workers were more represented in these occupations than in the general workforce. Stakeholders and researchers that the GAO interviewed identified several factors that may have contributed to the lower representation of certain groups, such as fewer women and minorities graduating with technical degrees and company hiring and retention practices.

EEOC not sufficiently tracking complaints by industry. Although the EEOC has identified barriers to recruitment and hiring in the technology sector as a strategic priority, when the agency conducts investigations, it does not systematically record the type of industry, therefore limiting sector-related analyses to help focus its efforts. The EEOC’s database of charges and enforcement actions—the Integrated Mission System (IMS)—has a data field for the North American Industry Classification System (NAICS) industry code, the standard used by federal statistical agencies in classifying business establishments, but the GAO found that this data field is completed for only about half the entries in the system. The GAO noted that the EEOC has plans to determine how to add missing industry codes but has not set a timeframe to do this.

In terms of systemic cases, according to the EEOC, as of June 2017, the commission had 255 systemic cases pending since fiscal year 2011 involving technology companies (13 of these were initiated as commissioner charges and 8 were directed investigations involving age discrimination or pay parity issues).

EEOC charges may not accurately reflect rate of workers who perceive discrimination. Several EEOC officials interviewed by the GAO noted that technology workers may be initiating few complaints at the federal level due to factors such as fear of retaliation from employers or the availability of other employment or legal options. They also said that technology workers may generally have greater wealth and can afford to hire private attorneys to sue in state court rather than go through the EEOC. Moreover, they said that some states, including California, have stronger employment discrimination laws that allow for better remedies than federal laws, which could lead employees to file charges at the state level rather than with the EEOC.

In addition, the EEOC has acknowledged in a 2016 report that binding arbitration policies, which require individuals to submit their claims to private arbiters rather than courts, can also deter workers from bringing discrimination claims to the agency, leaving significant violations in entire segments of the workforce unreported. That report stated that an increasing number of arbitration policies have added bans on class actions that prevent individuals from joining together to challenge practices in any forum. The report concluded that the use of arbitration policies hinders the EEOC’s ability to detect and remedy potential systemic violations. Researchers report that the use of such clauses has grown and data on federal civil filings for civil rights employment cases reflect a marked reduction in the number of such filings.

Steps in addition to charge investigations. Aside from pursuing charges, the EEOC has taken some steps to address diversity in the technology sector including research and outreach efforts. In May 2016, citing the technology sector as a source for an increasing number of U.S. jobs, the EEOC released a report analyzing EEO-1 data on diversity in the technology sector in tandem with a commission meeting raising awareness on the topic.56 In addition, EEOC’s fiscal year 2017- 2021 Strategic Enforcement Plan identified barriers to hiring and recruiting in the technology sector as a strategic priority. The EEOC has also been involved in outreach efforts with the technology sector. For example, the EEOC Pacific Region described more than 15 in-person or webinar events since 2014 in collaboration with OFCCP and local organizations focused on diversity in the technology sector. The topics of these events included equity in pay and the activities of these two agencies in enforcing nondiscrimination laws. Finally, in fall 2016, the EEOC initiated an internal working group to identify practices to help improve gender and racial diversity in technology, but as of June 2017 had no progress to report.

OFCCP placement goals lack specificity. The OFCCP’s regulations may hinder its ability to enforce contractors’ compliance because these regulations direct contractors to set placement goals for all minorities as a group rather than for specific racial/ethnic groups, the GAO found. By not requiring contractors to disaggregate demographic data for the purpose of establishing placement goals, the OFCCP has limited assurance that these contractors are setting goals that will address potential underrepresentation in certain minority groups, the GAO concluded.

Audits. While evaluation of technology contractors occurs in the course of the OFCCP’s routine activities, it does not currently use type of industry as a selection factor, according to agency officials. Although the OFCCP plans to incorporate information on disparities by industry into its process for selecting establishments for compliance evaluations, it has not fully assessed its planned methods. Without such assessment, the agency may use a process that does not effectively identify the industries at greatest risk of potential noncompliance.

In addition, the OFCCP faces delays in its compliance review process, but it has not analyzed its closed evaluations to understand the causes of these delays and whether its processes need to be modified to reduce them.

Violation statistics. The GAO found that few (less than 1 percent) of the OFCCP’s 2,911 closed technology contractor evaluations from fiscal years 2011 through 2016 resulted in discrimination violations, though 13 percent resulted in other violations, such as recordkeeping violations and failure to establish an affirmative action program (AAP). Technology contractor evaluations that had discrimination violations resulted in back pay, salary adjustments, or other benefits totaling more than $4.5 million for 15,316 individuals (averaging about $300 per award) for fiscal years 2011 through 2016. The vast majority of discrimination violations were on the basis of gender or race/ethnicity rather than disability or veteran status.

Other steps. In terms of other steps to conduct oversight of the technology sector, OFCCP officials in the Pacific Region told the GAO that they are hiring compliance officers with legal training to be better able to address needs for reviews in the technology sector, such as responding to lawyers representing technology contractors. Officials in both the Pacific and Northeast regions work closely with statisticians and labor economists on their cases, an effort officials said has increased over the past few years. Moreover, the OFCCP has requested funding in its fiscal year 2018 congressional budget justification to establish centers in San Francisco and New York that would develop expertise to handle large, complex compliance evaluations in specific industries, including information technology.

FAAP participation. Furthermore, key aspects of the OFCCP’s approach to compliance reviews of contractors’ affirmative action efforts have not changed in over 50 years, even though changes have occurred in how workplaces are structured. The OFCCP has developed an alternative affirmative action program for multi-establishment contractors— its Functional Affirmative Action Program (FAAP)—but few contractors participate in this program. Because the agency has not evaluated the program, it does not have information to determine why there has not been greater uptake and whether it provides a more effective alternative to an establishment-based AAP.

Recommendations. The GAO’s first recommendation was that the EEOC Chair should develop a timeline to complete the planned effort to clean IMS data for a one-year period and add missing industry code data. The other five recommendations were that the OFCCP should:

(1) analyze internal process data from closed evaluations to better understand the cause of delays that occur during compliance evaluations and make changes accordingly.

(2) take steps toward requiring contractors to disaggregate demographic data for the purpose of setting placement goals in the AAP rather than setting a single goal for all minorities, incorporating any appropriate accommodation for company size. For example, OFCCP could provide guidance to contractors to include more specific goals in their AAP or assess the feasibility of amending their regulations to require them to do so.

(3) assess the quality of the methods it uses to incorporate consideration of disparities by industry into its process for selecting contractor establishments for compliance evaluation. It should use the results of this assessment in finalizing its procedures for identifying contractor establishments at greatest risk of noncompliance.

(4) evaluate the current approach used for identifying entities for compliance review and determine whether modifications are needed to reflect current workplace structures and locations or to ensure that subcontractors are included; and

(5) evaluate the agency’s Functional Affirmative Action Program to assess its usefulness as an effective alternative to an establishment-based program, and determine what improvements, if any, could be made to better encourage contractor participation.

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