This blog was originally published on July 2, 2019 and revised to include new additional information.

Background: Both biology and culture have overtaken the historically simple “binary” reporting systems of the biologically designated sex of human beings. (Binary means one or the other of two choices…either “male” or “female” in the EEO-1 reporting context, for example.)

Most countries, including in the Unites States and its states and territories, have used simple binary (male/female) identification and reporting systems for centuries to report employee headcounts and when issuing driving licenses and birth certificates, among others. “Blue is for boys” and “pink is for girls” has been the fashion statement in America for a little over a century. Medical science and Human Resource Managers however, now report a substantial number of people (about 1%) with either complete or partial male AND female reproductive systems, or no sex organs at all. This sudden modern realization of the existence of human beings who are “intersex”, and thus suggest the need for a third reporting category (both sexes at once), a fourth reporting category (neither sex) and possibly a fifth reporting category (intermediate status between a male and a female sex) is thus now calling into question the utility of the continued use of “either/or” reporting formats (like the annual EEO-1 Survey tool) adopted much earlier in history.

 

First, a word about social, legal and medical nomenclature…

The term “intersex” is used to describe a variety of conditions in which a person is born with a reproductive or sexual anatomy that doesn’t fit the typical definitions of male or female. However, the nomenclature is in flux in social, legal and medical circles and has not yet finally settled. Intersex employees were historically (and often and are still) referred to as hermaphrodites (i.e. those who have simultaneously both either complete or partial Male and Female sex origins making unclear their biological sex at birth), or epicene individuals (having characteristics of both sexes or no characteristics of either sex, or of indeterminate sex), or third gender individuals (people who do not identify as male or female, but rather as neither, both, or a combination of both female and male genders), or androgyne (the combination of masculine and feminine characteristics into an ambiguous form), or indeterminate gender (either the individual or society categorizes the person as neither man nor woman because the person inhabits an intermediate state somewhere between being either a man or a women), or more modernly (and controversially) described by medical professionals as “DSD” (“Disorders of Sex Development”).

Note: While the research is controversial and not conclusive, there are also at least two reports that almost 2% of all live births in the United States currently result in an intersex baby, with both Male and Female genitalia, or no genitalia.

Despite the evolving nomenclature, we use the term “intersex” in this Blog to describe all of those persons who do not feel comfortable in a binary reporting world to declare themselves to be either “male” or “female.” The Intersex Campaign for Equality caused us to come to believe that the term “intersex” is more factually neutral, broad-and-all-encompassing of the many different types of sex identifications the medical and legal professions are now identifying, and is also a less judgmental reference than the usual medical references.

 

What box do you check if you are neither “male” nor “female”?

Many “intersex” individuals today, if given the choice, would NOT check the “male” or “female” box, but would prefer to check a box labeled “both,” “neither,” “non-binary,” or “other.” This is not unlike the updating dilemma which confronted those of mixed race which the U.S Bureau of the Census recognized beginning with the 2000 Census through the development of and deployment of the “Two or More Races” reporting format.

Note: Reporting formats are not necessarily of a legally “protected group” (i.e. a group the law protects…as the “two-or-more-races” reporting format illustrates. Employers/Government contractors “report,” for example, “Two or More Races” but do NOT undertake either Adverse Impact or Disparity Analyses of “Two or More Races.” (This is because Title VII law does not recognize “minorities” as a “Protected Group,” but rather protects only against discrimination made unlawful based on “race,” “color,” “religion,” “sex,” or “national origin”). See Section 703 of Title VII, 42 U.S.C. Section 2000e-2.) That observation also starts consideration of what the effect might be on existing data analyses were employers and Government contractors to begin to collect data as to incumbents (and Applicants) using “Both,” “Neither” or “Other” data reporting categories in addition to “Male” and “Female.” (Consider, for example, the effect such a change in reporting systems might have on statistical Disparity Analyses and on Adverse Impact Analyses for hires, promotions and involuntary terminations).

Component 1 of the EEO-1 Survey Requires a Binary Response: Employers and Government contractors required to report race, sex and ethnic information in response to Component 1 of the EEO-1 Survey know how to report those employees who identify as, or who the employer identifies as:

  1. Male or Female; and
  2. Transgender employees who identify as either Male or Female (as discussed below).

Note: The EEO-1 Survey reporting form does not currently recognize “Non-Binary” or “Both” or “Neither” or “Other” as acceptable reporting categories. This state of affairs remains true despite the fact that 9 states and the District of Columbia (a federal “territory”) have now passed legislation and made operational “non-binary” reporting systems (as discussed below), to issue birth certificates and/or drivers’ licenses (which processes the states control, of course). Rather the current (and historic) federal EEO-1 Component 1 Reporting Survey form contains only a Column “A” for employers to report “Male” employee headcounts and a Column “B” for employers to report “Female” employee headcounts.

Reporting Employers and Government contractors are caught, as a result, “between a rock and a hard place” without options to accurately report their Intersex employees. Indeed, Employers and Government contractors required to report race, sex and ethnic information in response to Component 1 of the EEO-1 Survey currently have NO GUIDANCE from the federal government on how to report intersex employees.

Do not change your self-identification forms just yet. Employers and Government contractors cannot currently modify their Self-ID forms for federal reporting purposes to accurately identify their Intersex employees since the Component 1 Survey Form currently requires either “male” or “female” reporting, as noted above.

As to “employees” as to whom Employers and Government contractors are currently and historically required to report sex information (“Male” or “Female”), along with race and ethnic information, in response to Component 1 of the EEO-1 Survey, most employers use a Self-Identification reporting tool to determine the sex of their employees.

Many contractors then choose to default, if need be, to a visual identification process to report “Male” or “Female” as to those employees who fail or refuse to Self-Identify. Of course, Employers/Government contractors could compel “employees” to report to the company either “Male” or “Female” as part and parcel of the employee’s general duty of loyalty (despite “urban legend” and cajoling from federal EEO agencies to make incumbent reporting “voluntary”). However, few Human Resources Managers we know wish to be so directive and intimidating as to threaten an employee with termination for failing or refusing to report his or her sex to management.

As a result, scattered reports are coming in that some employees are now asking whether they may report their sex-type to be a non-binary choice (like “Both” or “Other” or “Non-binary”). Moreover, some employees (not just Persons Expressing Interest to apply for work) are refusing to Self-Identify their sex-type at all since they do not see a reporting box on corporate Self-ID forms reflective of their “Non-Binary” sex-type.

As a result of those inquiries and experiences, a number of companies have asked whether they could perhaps use language like the following on their Self-Identification forms for employees:

“If you choose not to self-identify your gender, the federal government requires us to determine this information by visual survey and/or other available information.”

While there is no legal or regulatory guidance on this issue, we see no legal or regulatory restriction on the use of such a disclaimer or on the use of a visual identification process to determine the community with which the employee primarily identifies (either Male or Female). Indeed, Question and Answer 88 of the Questions and Answers to the Uniform Guidelines on Employee Selection Procedures, specifically approves of the use of visual identification to determine sex (and race/ethnicity), as discussed more fully below.

 

The federal government is not moving with the times and is thus not helping Employers and Government contractors (even apart from force-collecting erroneous sex-based data ignoring the true sex of perhaps between 1-2% of the working population of employees).

While the federal government has defined race and ethnicity (see OMB Directive 15), it has never defined the terms “Male” or “Female.” So, those employees who identify with a gender different than their biological gender at birth are free to select either male or female reporting categories. So, there is currently no EEO-1 or discrimination analyses reporting difficulties for transgender employees…just intersex employees.

Note, too, the absence of any definition of “Male” or “Female” in the Joint Reporting Committee’s EEO-1 Survey (technically known as Standard Form-100 or SF-100) “Instruction Booklet.” Nonetheless, the EEO-1 Instruction Booklet defines “race” and “ethnicity” at great length.

Moreover, the EEO-1 Instruction Booklet purports to REQUIRE employers to report ALL employees in “Section D- Employment Data” of the EEO-1 Survey reporting form, including as to “Male” in Column A and “Female” in Column B:

Note, too, the absence of any definition of “Male” or “Female” in the Joint Reporting Committee’s EEO-1 Survey (technically known as Standard Form-100 or SF-100) Instruction Booklet. Nonetheless, the EEO-1 Instruction Booklet defines “race” and “ethnicity” at great length. Moreover, the EEO-1 Instruction Booklet purports to REQUIRE employers to report ALL employees in “Section D- Employment Data” of the EEO-1 Survey reporting form, including as to “Male” in Column A and “Female” in Column B:

“Employment Data”

Employment data must include ALL full-time and part-time employees who were employed during the payroll period selected by the employer between October 1 and December 31 (workforce snapshot), except those employees specifically excluded as indicated in the Appendix. Employees must be counted by sex and race, and ethnicity, for each of the ten occupational categories. See Appendix for detailed explanation of job categories and race and ethnicity identification.

Every employee must be accounted for in only one of the categories in Columns A through N.” (emphases added)

As a result, intersex employees are in a quandary since their instinct would be to check BOTH boxes, or neither box. However, the federal government’s EEO-1 Survey also does not purport to permit employers to report both sexes simultaneously for any employee. Employers are thus left to make their best judgment about which sex with which each of their company’s intersex employees primarily align, typically through Self-Identification and/or visual observation.

Note: Shortly after DirectEmployers published an earlier version of this Blog, the EEOC suddenly adlibbed an “Other” category for employers to manually report Intersex employees when reporting the then in-progress EEO-1 Component 2 “hours worked” and “pay data” to the EEOC.

 

Tips when drafting any new employee self-identification forms.

We suggest that you also consider that use of any newly fashioned employee reporting terms such as “Non-Binary” or “Other” or “Both” are not ones most employees generally understand. These are relatively new terms in use thus far, primarily within the so-called and emerging “LGBTI” (Lesbian, Gay, Bisexual, Transgender and Intersex) and HR communities, and only as to some smaller portion of the HR community at that. We are concerned that many of your employees could be confused by the terminology without a definitions key. Confusion is important to avoid at a time like the present when so many companies are reporting decreasing percentages of employees (and Applicants) willing to Self-Identify. So, consider publishing a word “Key” to those employees you ask to Self-Identify.

Moreover, if you choose to collect information about sex-type beyond just “Male” or “Female,” please remember two things:

  1. The federal government will compel you to report only “Male” or “Female” On its annual Component 1 race/sex/ethnic reporting Survey. Accordingly, in the face of your company’s non-compliance, the federal government, through the Joint Reporting Committee, could seek to force you to force-fit each of your employees into one of the two allowable sex-reporting boxes: “Male” or “Female.” So, you will need a follow-on visual identification procedure, or some other identification procedure of your unique design, to capture “Male” or “Female” information so as to allow you to report all employees on your EEO-1 Survey response.
  2. Your company will likely have to work especially hard to arrest the fears of employees you are asking to report their intersex status – if you do – both as to the privacy of that information and as to what use your company would put these data (including even states like California which do NOT currently require a Non-Binary reporting option in the private workplace). Please remember, too, why your company makes inquiry about race/sex/ethnicity. Federal law requires it for EEO-1 Component 1 reporting, but does not require (or allow)reporting of “Non-Binary” or “Other.” So, your company would be best advised to explain that the company has used the non-binary reporting category for the reporting comfort of the employee BUT NOT to make employment decisions and not for reporting purposes.

But, if your company wants to use “Non-Binary” and “Other” reporting categories for the comfort of those employees who may feel constrained choosing between Male or Female reporting options, the good news is that SO FAR federal law would NOT appear to limit your company’s discretion to do so (and so long as your company eventually makes an election for the employees as to whether they are “Male” or “Female” when the company tenders its annual EEO-1 Component 1 Survey report to the Joint Reporting Committee reporting portal).

Note: By the way, to clear up a recurring question we receive, there is in fact no “Joint Reporting Committee” (“JRC”). Rather, the JRC is a legal fiction which operates as a line-item in the EEOC’s and OFCCP’s respective budgets allowing for the administration, collection, and reporting of employer EEO-1 reports to the EEOC and OFCCP. As the lead federal agency concerning equal employment opportunity, the EEOC takes the lead role to staff an office of Compliance Officers to hire a third-party data processor to annually receive, sort and report employer data inbound to the JRC. The EEOC JRC staff also administers the EEO-1 reporting cycle for the EEOC and the OFCCP, including the staffing of a Help Desk and publication of information notices to employers explaining their reporting obligations.

 

Background Facts/Issues to Remember

The EEOC required private employers which affect inter-state commerce and which employ 100 or more employees (in the company) AND OFCCP separately required covered federal Government contractors and first-tier subcontractors with ”a” covered Government contract valued at at-least $50,000 and which company employs at least 50 employees (in the company) to report their employee populations by “Sex” (and race/ethnicity) for the 2018 reporting year. This is the so-called Component 1 (race/sex/ethnic data) EEO-1 Survey for which the EEOC set a (unique to this reporting year) May 31, 2019 reporting deadline.

EEOC EEO-1 Reporting Rule: Here is the pertinent portion of the EEOC’s EEO-1 reporting Rule published at 29 C.F.R. § 1602.7:

Ҥ 1602.7 Requirement for filing of report.

On or before September 30 of each year, every employer that is subject to title VII of the Civil Rights Act of 1964, as amended, and that has 100 or more employees shall file with the Commission or its delegate executed copies of Standard Form 100, as revised (otherwise known as “Employer Information Report EEO-1”) in conformity with the directions set forth in the form and accompanying instructions.

* * *

[37 FR 9219, May 6, 1972, as amended at 56 FR 35755, July 26, 1991]”

OFCCP EEO-1 Reporting Rule: Remember: Covered Government contractors required to report Component 1 (race, sex, ethnic) data, are NOT (REPEAT NOT) required to report the highly controversial Component 2 “hours worked” and “pay data” which has been the subject of recent highly publicized litigation. Rather, the ONLY employers which must report Component 2 “hours worked” and “pay data” are those Title VII-covered employers which employ 100 or more employees. See above. (This is because the OFCCP declined to publish a Rule to amend its EEO-1 reporting requirement to add a Component 2 “hours worked” and “pay data” reporting requirement. Rather, OFCCP has historically “promulgated” only a Rule requiring Component 1 (race/sex/ethnic) reporting). See OFCCP’s current EEO-1 reporting Rule at 41 CFR Section 60-1.7(a)(1):

Ҥ 60-1.7 Reports and other required information.

(a)Requirements for prime contractors and subcontractors.

(1) Each prime contractor and subcontractor shall file annually, on or before the September 30, complete and accurate reports on Standard Form 100 (EEO-1) promulgated jointly by the Office of Federal Contract Compliance Programs, the Equal Employment Opportunity Commission and Plans for Progress or such form as may hereafter be promulgated in its place if such prime contractor or subcontractor (i) is not exempt from the provisions of these regulations in accordance with § 60-1.5; (ii) has 50 or more employees; (iii) is a prime contractor or first tier subcontractor; and (iv) has a contract, subcontract or purchase order amounting to $50,000 or more or serves as a depository of Government funds in any amount, or is a financial institution which is an issuing and paying agent for U.S. savings bonds and savings notes: Provided, That any subcontractor below the first tier which performs construction work at the site of construction shall be required to file such a report if it meets requirements of paragraphs (a)(1) (i), (ii), and (iv) of this section.”

 

Example 1: a company with a Government contract valued at over $50,000, but employing only 75 employees, WOULD file Component 1 of the EEO-1 Survey pursuant to 41 CFR Section 60-1.7 (see also the EEOC’s FAQs so noting), but WOULD NOT file Component 2 (“hours worked” and “pay data”). [The OFCCP’s EEO-1 reporting Rule does not require Component 2 Reporting under ANY circumstances, even though it does require Component 1 reporting, including at an employee headcount (i.e. 50 employees) threshold lower than the EEOC’s Title VII (100 employee) reporting threshold]. By the same token, such an employer employing only 75 employees would NOT file any EEO-1 form were it NOT a covered Government Contractor (since the EEO-1 reporting requirement for Title VII-employers is 100 employees). This is an example of how OFCCP’s Component 1 reporting requirement is broader than the EEOC’s Title VII reporting requirement.

Example 2: a company with a Government contract valued at under $50,000 and with more than 50 but fewer than 100 employees in the company would NOT file either Component 1 or Component 2 of the EEO-1 Survey [since neither the EEOC’s 100 employee filing requirement nor the OFCCP’s $50,000 contract or more reporting Rule captures this company].

Example 3: a company with a SECOND-TIER Government SUBCONTRACT valued at over $50,000 but with more than 50 but fewer than 100 employees would NOT file either Component 1 or Component 2 of the EEO-1 Survey since neither the EEOC’s 100 or more filing requirement nor OFCCP’s prime and first-tier subcontractor only reporting Rule captures it. [OFCCP’s reporting Rule requires only prime contractors and first-tier subcontractors to report. The EEOC reporting Rule would also miss this employer since it employs fewer than 100 employees in the company in this example].

 

State activity is now giving rise to “checker board” requirements as the federal government increasingly ceases to lead the way and ceases to drag the states along with it kicking and screaming (as was the case in years past).

We have seen it as to HR issues in the form of “Ban the Box,” paid leave, and pay equity state-level legislation. Following the state of Oregon’s lead, thirteen states (including Oregon) and the District of Columbia (a federal territory) have now sought to push beyond the federal law to allow non-binary identification for purposes (thus far ONLY) of birth certificates and/or state drivers’ licenses. (And, you thought everything new started in California!).

But, as we will see below, NONE of these state statutes address (yet) the identification of the sex of employees within a corporation or partnership, SO THERE IS NO CONFLICT WITH THE FEDERAL REQUIREMENT OF BINARY REPORTING OF THE SEX OF EMPLOYEES AT ANY RATE. Rather, the thirteen states and the District of Columbia thus far have simply permitted, or will soon permit, a non-binary choice on certain state documents, but do not impose or restrict the reporting of the sex of corporate employees.

Moreover, if there were a conflict, in fact, because a state were to pass a law forbidding an employer from using a binary Self-Reporting tool to obtain an employee’s sex, federal law would pre-empt the contrary state law, at any rate, as we will see below. Nonetheless, the action of these states to recognize non-binary reporting for certain state law purposes, now only lays the foundation to question whether federal binary reporting of employees still makes sense in light of advances in medical knowledge and reporting, and given our evolution in cultural acceptance.

Oregon led the way (not California or New Jersey). In 2016, Oregon became the first state to legally recognize a United States citizen as neither male nor female for identification purposes. In the Matter of the Sex Change of Jamie Shupe, Case No. 16CV13991 (Ore. Cir. Ct., Multnomah County June 10, 2016). Subsequently, thirteen states plus the District of Columbia (to the date of this Blog—and growing at a rate thus far of 1 every three months, or so) now permit, or will soon permit, individuals to identify as non-binary on driver’s licenses and/or on birth certificates. These states are Arkansas, California, Colorado, Indiana, Maine, Maryland, Minnesota, Nevada, New Hampshire, New Jersey, Oregon, Utah, and (the state of) Washington. (Note: Ohio in 2012 permitted an intersex person to have gender identified as “hermaphrodite” on a birth certificate; however, “male” and “female” remain the only options on state IDs, and there has been no allowance for a “non-binary” designation on birth certificates. Additionally, New York City allows an individual to identify as non-binary on birth certificates as of January 1, 2019, but this is a municipal law that does not extend to the rest of New York state). The states permit a non-binary designation as follows:

State Non-Binary Designation
Arkansas Arkansas permits an individual to identify as non-binary on their driver’s license pursuant to an informal Office of Driver Services policy. (https://transequality.org/sites/default/files/docs/id/AR%20Drivers%20License%20gender%20change%20guidance.pdf)
California The Gender Recognition Act (Sen. Bill 179, 2017-2018, ch. 853, 2017 Cal. Stat.) establishes the process, beginning in January 2018, by which an individual can obtain a new birth certificate reflecting a non-binary gender designation through the California Department of Public Health. The California Department of Motor Vehicles permits an individual to submit a completed Gender Category Request form to update their gender identification.
Colorado As of November 30, 2018, the Colorado Division of Motor Vehicles will issue a Male, Female, or X on a Colorado ID or driver’s license upon receipt of a form signed by a medical or behavioral healthcare provider. Furthermore, following adoption by the Board of Health on December 19, 2018, 5 CCR 1006-1 established a regulatory basis for individuals to amend the gender marker on their birth certificate upon submission of certain documentation.
District of Columbia The D.C. Department of Motor Vehicles permits an individual to identify as non-binary on their driver’s license. (https://dmv.dc.gov/sites/default/files/dc/sites/dmv/publication/attachments/DC%20DMV%20Form%20Gender%20Self-Designation%20English.pdf)
Indiana In March 2019, The Bureau of Motor Vehicles for Indiana announced that beginning in October 2019 it would begin permitting an individual to self-identify as non-binary on driver’s licenses and state identification cards upon submission of certification from a medical provider. (https://www.out.com/news/2019/3/12/mike-pences-home-state-starts-issue-nonbinary-ids). However, on October 7, 2019, the Bureau announced it would put on hold the policy allowing non-binary gender designations while state officials develop new formal regulations to permit such changes. (https://www.wfyi.org/news/articles/indiana-bmv-puts-nonbinary-gender-option-for-ids-on-hold)
Maine As of June 11, 2018, the Maine Bureau of Motor Vehicles has recognized non-binary individuals on Maine IDs.
Maryland Effective October 1, 2019, legislation passed by the Maryland General Assembly (Senate Bill 196 of 2019) allows an individual to identify as non-binary on driver’s licenses, learner’s permits, identification cards, or moped operator permits issued by the Maryland Department of Transportation’s Motor Vehicle Administration. (http://www.mva.maryland.gov/Changing-Gender-Designation/index.htm) No documentation is required to support a change in gender designation.
Minnesota Minnesota Driver and Vehicle Services do not require documentation for an individual to identify as non-binary on a license or state ID and may do so simply upon request.
Nevada Since April 22, 2019, Nevada now permits an individual to identify as non-binary on state driver’s licenses. (https://dmvnv.com/namechange.htm) Additionally, Nevada Administrative Code section 440.030 also permits an individual to receive a new birth certificate identifying as non-binary upon receipt of two affidavits reflecting an individual’s gender; one affidavit from the individual, their parent or guardian, or legal representative stating the gender that should be on the birth certificate and why, and another affidavit from a person who knows the individual who is able to confirm the facts in the first affidavit based on personal knowledge through a personal, familial, medical, or professional relationship.
New Hampshire Beginning January 1, 2020, New Hampshire residents will be able to identify as non-binary on state-issued IDs. HB 669, passed July 15, 2019 (https://legiscan.com/NH/text/HB669/2019)
New Jersey The Babs Siperstein Law (S. 478/A. 1718 (N.J. 2018)) permits issuance of updated birth certificates reflecting a gender of female, male, or undesignated/non-binary upon receipt of a form signed by the applicant.
Oregon The Oregon Driver & Motor Vehicle Services Department permits identification as non-binary on state ID cards or drivers’ licenses. (https://www.oregon.gov/ODOT/DMV/Pages/driverid/chg_gender_designation.aspx) Additionally, effective January 2018, OAR 333-011-0272 allows individuals born in Oregon to update their gender identity to reflect a non-binary status.
Utah The first non-binary state ID card was granted by court order in September 2018. Non-binary gender designation on birth certificates has been available since 2017. However, in both instances, allowance for a non-binary gender designation is based on court order from a judge; there is no statutory allowance for non-binary designations.
Washington While Washington has yet to permit non-binary gender identification on state ID cards or driver’s licenses, WAC 246-490-075 (December 27, 2017) permits individuals to change their birth certificates to identify as non-binary.

Also, one federal District Court in Colorado has ruled that the U.S. Department of State exceeded its authority under the Passport Act of 1926 when requiring an individual to identify as either male or female on a passport application. The Court enjoined the State Department from relying upon its binary-only gender marker policy to withhold the issuance of a passport.
Zzyym v. Pompeo, 341 F. Supp.3d 1248 (D. Col. 2018).

 

Federal law will trump any state laws contrary to federal binary reporting law, although there are no conflicting state laws yet.

Federal law “pre-empts” any contrary state laws. But, please realize that none of the existing state statutes allowing non-binary identification on state-issued birth certificates and drivers licenses thus far conflict with federal binary reporting of the sex of corporate employees.

But, were there a conflict, please also understand that federal law would pre-empt any contrary state law pursuant to the Supremacy Clause of the U.S. Constitution.

See Article IV, para 2 of the U.S. Constitution (the so-called “Supremacy Clause” of the Constitution):

“This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding.”

But, so long as they do not conflict with federal law, state laws may go further than federal law, UNLESS the Congress takes the specific and very unusual step to declare “complete” pre-emption (“filling the field” entirely and not allowing any local state legislation to apply—as you see with certain portions of ERISA so as to insure a cohesive and common nationwide standard regarding retirement policy and practices). You saw this allowance of state law supplements to the exercise of federal power occur when the SCOTUS upheld, in 1987, California’s pregnancy non-discrimination law which a bank in California challenged as pre-empted because it went further to protect women than did federal Title VII law. See California Federal S. & L. Assn. v. Guerra, 479 U.S. 272 (1987).

The Congress has never thought, however, to cause the federal government to be the exclusive and pre-emptive authority requiring the reporting of the sex of employees. Accordingly, the states are free to legislate in this area of corporate reporting of the sex of employees. The Trump Administration apparently agrees since it has filed no law suits to stop any of the now thirteen states and the District of Columbia allowing non-binary reporting of one’s “sex” on drivers’ licenses and birth certificates.

 

What is the best way to identify an employee’s sex for purposes of the EEO-1 survey report?

The EEOC has written that the preferred method of identification (at least for race and ethnic identification) is through Self-Identification. Specifically, the EEOC’s EEO-1 Frequently Asked Questions and Answers states: “Self-identification is the preferred method of identifying the race and ethnic information necessary for the EEO-1 report.” However, should an individual refuse to Self-Identify, federal agencies have also permitted the use of (1) visual observation, (2) personal knowledge, or (3) employment records. Id. The EEOC has also impermissibly sought, however, to limit employers by suggesting that the Commission has the power through its EEO-1 Instruction Booklet (which does not have the binding force or effect of law) to forbid the use of other than Self-Identification methodologies until Self-Identification has first failed: (“If an employee declines to self-identify, employment records or observer identification may be used”); see also EEO-1 Instructions Booklet, OMB No. 3046-0007 (rev. March 2018) (only if an employee declines to self-identify his or her race and/or ethnicity may an employer use employment records or observer identification).

Please also see OMB Directive 15, pertaining to race and ethnic standards for federal statistics and administrative reporting first adopted on May 12, 1977. OMB Directive 15 notes that use of visual observation or personal knowledge as to race and ethnic information contemplates using the “category which most closely reflects the individual’s recognition in his community.”

Note: This sudden EEOC antipathy to an employer’s use of visual observation to identify race and ethnicity, at least, sprang from the EEOC’s realization in the Obama Administration that there were approximately 40 million Americans of mixed-race working in the United States. The EEOC surmised, without the benefit of any empirical research, that perhaps visual self-identification was no longer as reliable a methodology as it had been 50 years earlier when employees in the United States were more clearly of one race or ethnicity and not a blend.

The conclusion that employers could adopt visual observation protocols to identify gender finds support in two different places, even apart from the fact that no EEOC or OFCCP writing stands against the proposition. First, the EEO-1 Instruction Booklet passage which notes that employers may use employment records or observer identification when an employee fails to Self-Identify is contained within Section 4 of the Booklet entitled: “Race, Ethnic, and Sex Identification.” (Emphasis added). Thus, even though the specific language in this section of the EEOC EEO-1 Instruction Booklet relates only to race and ethnicity identification, the section header specifically includes sex identification.

Second, the EEOC and the OFCCP, among other agencies, published in March 1979 the Uniform Guidelines on Employee Selection Procedures Question and Answer 88 to provide advice to employers about how to collect race, sex and ethnic data and encouraged the use of visual observation.

Q: How should a user collect data on race, sex or ethnic classifications for purposes of determining the impact of selection procedures?

A: The Guidelines have not specified any particular procedure, and the enforcement agencies will accept different procedures that capture the necessary information. Where applications are made in person, a user may maintain a log or applicant flow chart based upon visual observation, identifying the number of persons expressing an interest, by sex and by race or national origin; may in some circumstances rely upon personal knowledge of the user; or may rely upon self-identification. Where applications are not made in person and the applicants are not personally known to the employer, self-identification may be appropriate. Wherever a self-identification form is used, the employer should advise the applicant that identification by race, sex and national origin is sought, not for employment decisions, but for recordkeeping in compliance with federal law. Such self-identification forms should be kept separately from the application, and should not be a basis for employment decisions; and the applicants should be so advised.

Thus, until the EEOC or OFCCP properly amends its reporting instructions and forms through a Rule which has the binding force and effect of law to prohibit employers from undertaking visual identifications of sex, employers may use visual observation, personal knowledge, or corporate records to “assign” one of the binary choices available to intersex employees to report their sex-type in EEO-1 Component 1 reports. This practice raises two very important concerns of which employers should be aware.

 

1. Do not report false or misleading data to the JRC.

First, employers should not falsify EEO-1 data reports or else they may run afoul of criminal statutes making false or misleading statements to the federal government to be unlawful (see 18 U.S.C. 1001, for example). Also, please see the EEOC’s EEO-1 reporting regulation at 29 C.F.R. § 1602.8 (“The making of willfully false statements on Report EEO-1 is a violation of the United States Code, title 18, section 1001, and is punishable by fine or imprisonment as set forth therein”). It is unlikely that an agency would find any liability in this regard, given that the reporting regulations require reporting of sex-type as either “Male” or “Female,” and given the employer’s appropriate use of visual observation or corporate records. (For example, the OFCCP regulations at 41 C.F.R. §§ 60-2.10 – 60-2.17 discussing affirmative action programs also require employers to classify employees only as either Male or Female).

Second, and most importantly, employers should make employees aware that the company is identifying the sex of employees pursuant to federal legal requirements and not to make employment decisions.

 

2. The bottom line on reporting Intersex employees.

For now, for purposes of federal EEO-1 Component 1 reporting of the sex of corporate employees, reporting employers must report non-binary individuals as either “Male” or “Female” based on self-identification, visual observation, personal knowledge, or corporate records. Until the federal agencies revise the EEO-1 Component 1 reporting form to accommodate the newly socially and medically recognized reality of non-binary employees, employers should feel free to advise their non-binary employees that their “corporate hands are tied.”

Query: would the EEOC prosecute your company for reporting Intersex employees?

Would the EEOC and/or the OFCCP “come after” your company and seek to compel it to reform its EEO-1 filing through a supplementary filing to accomplish COMPLETE binary reporting if the company had chosen NOT to report non-binary employees in a binary format (thus not placing intersex employees into either “Male” or “Female” reporting data cells?) Remember, there are no financial fees or penalties which the EEOC could assess against an employer for inadequate reporting of an EEO-1 form, or for a late filing, or for even not filing an EEO-1 report at all. Rather, the EEOC’s only recourse, proceeding on behalf of the Joint Reporting Committee, is to file a Complaint in federal Court seeking an injunction to require the required reporting. (The OFCCP, on the other hand, could seek debarment for failing to timely file its required EEO-1 Component 1 Report). We think the agencies would NOT exercise their discretion to sue defaulting employers. We believe it would be particularly difficult for the EEOC and the OFCCP to summons the appetite to litigate such a case, particularly if the employer/Government Contractor/first-tier subcontractor also sent the Joint Reporting Committee an e-mail:

  1. reporting the employer’s action,
  2. explaining that the JRC’s EEO-1 reporting form was not responsive to the sex-type of the employer’s employees or sufficiently broad to accept a report of the employer’s workforce which was more diverse than the EEOC’s form permitted, and
  3. reporting its non-binary employees by race, ethnicity, EEO-1 category, (and if Component 2 also attached to the employer)work hours and pay data.

Our “Best Case” prognostication is that the federal government works through this Intersex reporting anachronism not earlier than the 2024 EEO-1 reporting year…and that is if the EEOC and/or the OFCCP puts the issue on “the Fast Track.”

 

Conclusion

As with any cultural change, time suddenly seems to move quickly even as government responsiveness to change seems to move disproportionately more slowly. Employers will continue to be caught between a federal government that insists every reporting employer force-fit every employee into either a “Male” or a “Female” box: while the growing number of Intersex employees being birthed and coming into the workforce increasingly demands a third, a fourth or a fifth box. In the transition, employers and Government contractors must continue to disappoint Intersex employees (federal law compels that disappointment) but should not be hesitant to explain to Intersex employees that the company’s “hands are tied” and the employee should write his/her Congressman and the President to suggest a more accurate reporting format for Intersex employees.

THIS COLUMN IS MEANT TO ASSIST IN A GENERAL UNDERSTANDING OF THE CURRENT LAW AND PRACTICE RELATING TO OFCCP. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. COMPANIES OR INDIVIDUALS WITH PARTICULAR QUESTIONS SHOULD SEEK ADVICE OF COUNSEL.

SUBSCRIBE.

Compliance Alerts
Compliance Tips
Week In Review (WIR)

Subscribe to receive alerts, news and updates on all things related to OFCCP compliance as it applies to federal contractors.

2 + 13 =

OFCCP Compliance Text Alerts

Get OFCCP compliance alerts on your cell phone. Text the word compliance to 55678 and confirm your subscription. Provider message and data rates may apply.

Jay J. Wang

Mr. Wang is a Partner at Fox, Wang & Morgan P.C. where he focuses on employment litigation that includes civil claims involving wrongful termination, harassment, unpaid wages, discrimination, trade secrets and workplace violence claims.

Share This