Mandi Smith T


OFCCP’s new "Ethnicity" reporting requirements: Cutting Through The Confusion
Mandi Smith T

It is finally time for federal contractors to start complying with the new "ethnicity" tracking requirements that were adopted by the Office of Federal Contract Compliance Programs ("OFCCP") during the eleventh hour of the Clinton Administration. The new data is supposed to be included in affirmative action plans starting in 2003.

Federal contractors have long been required to report on the racial makeup of their work forces, and few if any of us knew there was a difference between "race" and "ethnicity." Until recently, even the Department of Labor used the terms interchangeably. Many of us understood both terms to mean a shared culture, customs, language, and nationality.

However, the new rules, based on classifications adopted by the Office of Management and Budget ("OMB") in 1997, require contractors to treat "race" and "ethnicity" as two separate characteristics. And, in the government’s terminology, the only "ethnicities" are Hispanic/Latino and non-Hispanic/Latino. Let’s look more closely at how these work.

Historically, the OFCCP has required contractors to classify applicants and employees as members of any of five "racial" groups: White, Black, Hispanic, American Indian, or Asian/Pacific Islander. These classifications were none too nuanced, but they at least made it relatively easy for people to identify themselves and for the receptionist who received job applications to take a reasonable "visual" guess when the applicant failed or refused to self-identify.

The new requirements say that after asking about gender, employers should ask for "ethnicity" information. But, according to the government, as stated above, there are only two "ethnic groups": "Hispanic/Latino," and "non-Hispanic/Latino." Thus, people as ethnically diverse as Anglo-Saxons, Pakistanis, Poles, Italians, Tanzanians, Germans, Egyptians, Chinese, Sudanese, Maoris, and Afghans should all be lumped together as "non-Hispanic/Latino." (OMB acknowledges that its ethnic designations are not "anthropologically correct.")

The OMB defines "Hispanic/Latino" as "a person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin, regardless of race."

Once the "ethnic" information is gathered, the "race" must be identified. The racial classifications, with a few cosmetic label changes, are essentially the same as before but with "Hispanic" removed from the list of "races." The new racial choices are "American Indian or Alaska Native"; "Asian"; "Black or African-American"; "Native Hawaiian or Other Pacific Islander"; and "White." Individuals must be allowed to choose multiple races if applicable.

Identifying oneself this specifically may be confusing for some people, but probably overall doable. But the OFCCP regulations have always required employers to make a good-faith attempt to designate people who don’t self-identify. And employers might wonder how on earth the receptionist at a factory in "Smalltown, USA" can be expected to know the difference between a "Cuban (white) Hispanic" and a "Mexican (American Indian) Hispanic."

Fortunately, the new rules explicitly provide that employers do not have to separately designate "ethnicity" in the event that applicants or employees do not self-identify. In other words, employers who are forced to do their own designations may revert to using "Hispanic" as a "race," just as they have done in the past.

Here are the OMB’s definitions of each group:

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 maintains tribal affiliation or community attachment.

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.

Black or African-American: A person having origins in any of the black racial groups of Africa. Terms such as "Haitian" or "Negro" can be used in addition to "Black or African American."

Hispanic or Latino: A person of Cuban, Mexican, Puerto Rican, Cuban, South or Central American, or other Spanish culture or origin, regardless of race. The term, "Spanish origin," can be used in addition to "Hispanic or Latino."

Native Hawaiian or Other Pacific Islander: A person having origins in any of the original peoples of Hawaii, Guam, Samoa, or other Pacific Islands.

White: A person having origins in any of the original peoples of Europe, the Middle East, or North Africa. (The OMB considered but rejected a proposal to create a classification for Middle Easterners.)

What are employers to do with all this melting pot information once they collect it? We recommend you review the information in the same manner that the government would, to wit:

  • If a person checks "Hispanic" for ethnicity, then consider this person a "minority." (The employee or you must still identify "race," but a "Hispanic" will always be a "minority," regardless.)
  • If a person checks any single race other than "White," then consider the person a "minority."
  • If a person checks any combination of races, then consider the person a "minority."

It may be easier to say who isn’t a minority under these new rules – the only "non-minorities" are persons who check both "non-Hispanic" for "ethnicity" and "White" for "race." Everybody else is a minority.

Needless to say, these new rules are expected to increase the number of "minorities" at most companies and have the opportunity for dramatically changing employers’ adverse impact calculations.

As stated above, the OFCCP regulations requiring use of the OMB classifications were among the Clinton Administration’s "eleventh-hour" enactments, and it is not entirely clear how aggressively the Bush Administration will enforce them. However, we recommend that employers begin gathering the ethnicity/racial information, both for current employees and on all applicants, as soon as possible. This will facilitate the development of the company's 2003 affirmative action plans. If you have any questions about how to gather or use this information, please call one of the attorneys in Constangy’s affirmative action practice group.

Mandi Smith T (Birmingham, AL) is co-chair of Constangy’s affirmative action practice group.

From the Editor’s Desk

I received quite a bit of feedback from current and former nursing mothers as a result of the last edition’s "The Best and Worst of ‘01"— specifically, regarding my listing California’s "lactation accommodation" statute as one of the "worst." I appreciated the feedback and thoroughly enjoyed communicating with those of you who wrote.

I myself fall into the "former nursing mom" category. Although my oldest is in college and my youngest (born while I was in law school) is now 14, I haven’t forgotten what it was like. I support the laws against pregnancy discrimination and believe that employers should be as family-friendly as they can afford to be. To me, it’s good business as well as the right thing to do.

My only grievance with the California statute was its coercive aspect. Although I agree with the California legislators that employers should accommodate nursing mothers as much as possible, I am sure there are some employers who cannot because they are struggling to make it and can’t afford a private space for such purposes. These employers, in my opinion, deserve to be cut some slack. The employers who can afford to offer accommodations but refuse because they are penny-wise and pound-foolish, or just stubborn, will get their comeuppance in their inability to attract and keep talented women of childbearing age.

At the same time, I appreciated the horror stories that some of you shared about employers who were . . . how shall I say this politely? . . . not terribly sensitive to nursing mothers’ needs. According to our readers, there are definitely some bad apples out there. Fortunately, none appeared to be our client companies.

The best news from all of this was that you cared enough to write. Please keep that feedback coming!

Robin E. Shea, Editor
Winston-Salem, NC


California, apparently inadvertently, created new hoops for employers to jump through in doing background checks on employees and applicants. A statute intended to protect against identity theft requires employers to disclose to the employee or applicant whatever information is gathered during a reference or background check. As we went to press, the California Assembly was considering ways to address the concerns of employers. In the meantime, the statute took effect January 1, 2002 . . .

Louisiana voters approved legislation to increase the minimum wage above the federal minimum, as did the city of New Orleans . . .

Washington state has expanded its collective bargaining statute to include teaching and research assistants at the University of Washington. There will be no right to bargain over terminations of employees who don’t meet the university’s academic requirements, amounts of tuition and fees, the academic calendar, and class size. The university cooperated with the Graduate Student Employment Action Coalition (an affiliate of the United Auto Workers) in drafting the legislation . . .


Constangy will be a sponsor for the Society for Human Resource Management’s 54th Annual Conference & Exposition in Philadelphia, Pennsylvania on June 23-26, 2002. The conference is the world’s largest event dedicated to the advancement of the human resource management profession. Keynote presenters will include Rudolph Giuliani, Time magazine’s 2001 Person of the Year, and David McCullough, author of the new biography John Adams.

Pat Tyson, the head of Constangy’s OSHA practice, will present the break-out session, "Think All’s Quiet on the OSHA Front? An OSHA Insider Reveals What Companies Should Know for the Coming Year." In total, more than 100 sessions ranging from employment law to HR management will be offered to attendees. Learn more about the Conference by visiting We hope to see you there!

ENRON REFORMS: Out of the Darkness, Light for Employee-Stockholders

Regional Labor and Employment Law Workshop 2002: A Brave New World
Robert P. Floyd, III

President Bush is moving aggressively to reform retirement plan rules to deal with the problems highlighted by the recent Enron collapse. The President announced plans to implement certain recommendations of a Cabinet-level task force he convened to examine pension security issues. Top priorities include the following:

  • providing greater rights to plan participants to diversify by selling company stock
  • reducing the disparity between the ability of corporate executives to sell stock outside of the 401(k) plan and the ability of rank-and-file employees to sell company stock in their 401(k) accounts during so-called "blackout periods" (defined below)
  • imposing "blackout notification" requirements
  • increasing the fiduciary responsibilities of employer plan sponsors to participants during "blackout periods," and holding plan sponsors responsible for any adverse consequences that result from breach of these responsibilities
  • providing plan participants with better access to independent investment advice

A "blackout period" is a timeframe during which a self-directed plan is making certain administrative changes and participants are prohibited from making investment changes. Most of the bills being contemplated on Capitol Hill propose that participants receive 30 days’ notification of any blackout period.

The major bills pending will also require individual account plans to provide quarterly benefits statements to participants.

Other problem areas being addressed by proposed legislation include diversification rules. These proposals seek to reform problem areas found at Enron, where matching contributions were made exclusively in company stock. Participants in the Enron plans were not allowed to diversify their company matching accounts until they attained age 50—yet the executives had no similar restriction. One bill would require plans to allow diversification after the participant attains age 35 and five years of participation in the plan. A companion bill proposes to limit to 20% the amount of employer stock that is allocated to any participant’s account in a non-ESOP (employer stock option plan). In addition, this bill would give the participant in a non-ESOP the right to direct the plan to divest of employer securities, provided that the participant is fully vested and that at least 90 days have elapsed since the plan allocated employer stock to the participant’s account

Other proposals include requirements that plans provide additional information to plan participants and beneficiaries regarding the importance of diversifying the investment of the assets in their accounts, limits on employer deductions if employer matching contributions are made in the form of employer stock, and limits on the ability of officers to sell stock that is not owned by the plan during a blackout period.

Although the precise changes are not yet certain, it is clear that changes will be made. If you need additional information about the pending legislation, or assistance in modifying your benefits plan, please contact any member of Constangy’s employee benefits group.

Rob Floyd (Arlington, VA) practices in the areas of employment litigation prevention and defense, employee benefits, wage and hour, and independent contractor issues.

Getting To Know Us

BOB LEMERT (Atlanta, GA, labor relations law, employment liability prevention and WARN compliance) received his bachelor’s degree in industrial engineering with highest honors from the Georgia Institute of Technology and his law degree from Emory University. Before joining our law firm, Bob had a career in the private sector in human resources and as legal counsel. When he is not practicing law, Bob enjoys gardening, travel, photography and raising fish, and he even builds ponds with waterfalls for fun. Bob and his wife, Anne, have three children and two grandchildren.

BOB JANOWITZ (Kansas City, MO, union avoidance, and NLRB litigation, negotiation, and arbitration) is the head of our Kansas City office and of our Labor practice group. He received his bachelor’s degree from City College of New York and his law degree from the University of New Mexico. Bob has been practicing labor law since 1969, when he started as an attorney with the National Labor Relations Board ("NLRB"). He also served with the NLRB in Pittsburgh and was the Regional Attorney in Kansas City before entering private practice. Since 1979, he has been an Adjunct Professor of Labor Law at the University of Missouri-Kansas City Law School. In his spare time, Bob enjoys fishing and baseball. He and his wife, Linda, have one daughter.

DAVID SMITH (Atlanta, GA, occupational safety and health) received both his bachelor’s degree summa cum laude in history and Latin and his master’s degree in history from Emory University. David worked as a paralegal before enrolling in law school at the University of Georgia, whence he graduated cum laude. He is a chapter author of the American Bar Association’s book on Occupational Safety and Health Law. When David is not practicing law, he enjoys World War II history, running, and spending time with his wife, Traci, and their two small children.

TERESA BULT (Nashville, TN, employment litigation prevention and defense, and employer audits) received her bachelor’s degree in English magna cum laude from John Brown University and her law degree cum laude from Pepperdine University School of Law. Before she joined our law firm, Teresa worked for Judge Thomas Penfield Jackson (the Microsoft Judge) in Washington, DC. Among Teresa’s other honors, she was selected for Harry Phillips American Inn of Court for the 1999-2001 term. She is co-author of "Technology Issues in the Workplace," which appeared in The Federal Lawyer. When Teresa is not practicing law she enjoys travel, home decorating, exercising, and spending time with her husband, Ryan, and one-year-old son.

KRISTINE HOWARD (Winston-Salem, NC, employment litigation prevention and defense, and affirmative action) received her bachelor’s degree in government from the University of Virginia and her law degree from the University of Richmond. Her law school honors include two awards for excellence in the study of labor and employment law. She is also on the Board of Directors of Cancer Services, Inc., of Forsyth County (Winston-Salem, NC). When she is not practicing law, Kristine enjoys swimming, movies, and spending time with her husband, Chris. They are expecting their first child in September.


As most of our clients are now aware, Constangy is delighted to have Dan White join us in our Atlanta, GA, office. Dan devotes his practice exclusively to all aspects of business immigration law. His services include business and professional visas, labor certifications, immigration visas, consular representation, and citizenship for foreign executives, managers and professionals.

Despite the embarrassing publicity caused by the visas recently issued to the already-deceased September 11 terrorists Mohammed Atta and Marwan al-Shehhi, the Immigration and Naturalization Service (INS) really has tried to become a more effective agency. Some of the steps taken are a boon for employers who need foreign talent; unfortunately, others just create more red tape. Here is a summary of the latest developments:

"Premium Processing" Lets Short-Staffed Employers Cut Red Tape. The new "premium processing service" offered by the INS for employment-based petitions provides much-needed relief for companies eager to get foreign workers through the approval process and into workplaces. For an optional, additional filing fee of $1,000, the INS processes nonimmigrant petitions in 15 calendar days. (Under normal conditions, these petitions take approximately 75 days to process.) If the INS fails to meet the 15-day timeframe, it refunds the additional fee but continues to expedite processing of the petition.

Currently, the following visa categories are eligible for premium processing: E-1, E-2, H-1B, H-2B, H-3, L-1A, L-1B, Blanket L, O, P, and Q, R, and TN classifications. Premium processing may in the future be expanded to include other petitions.

Less waiting for H-1B "Transfers." The H-1B nonimmigrant visa category (also known as the specialty occupation or professional visa) is available to foreign workers who hold a U.S. bachelor’s degree or the equivalent. The job in question must be in an industry that generally requires such a degree for entry-level work. The H-1B is often used for systems analysts, engineers, architects, accountants, physicians, and numerous other professionals. (Spouses and minor children of the H-1B worker are admitted in H-4 status, but cannot work.)
An annual quota limits the number of new H-1B visas available in any given year. On the other hand, there is no quota for H-1B "transfers," in which an H-1B worker moves from one company to another. However, until recently, neither a new nor a "transfer" H-1B could begin work until the INS approved the move.

The INS has now removed this requirement for H-1B transfers, although not for new H-1Bs. Now, H-1B transfers may change jobs as soon as a transfer petition is filed by the new employer, so long as the individual is in lawful status at the time of filing and has not engaged in any unauthorized employment since his or her last lawful admission. If the petition is ultimately denied, the authorization will end at the time of the denial.

As an aside, there were no quotas whatsoever on H-1Bs until the 1990s, when the high-tech boom created a huge demand for skilled foreign talent.

Is your company "H-1B dependent"? On a more negative note, the government is now classifying certain employers as "H-1B dependent," which means that they must jump through extra hoops when hiring H-1B employees. The purpose of the classification is to discourage U.S. employers from hiring "too many" foreign nationals.

Companies with 51 or more full time employees are H-1B dependent employers if at least 15% of their employees hold H-1B status. Employers with 26 to 50 full time employees are H-1B dependent if they employ more than 12 H-1B workers. Companies with fewer than 25 full time employees are H-1B dependent if more than seven employees hold H-1B status.

H-1B dependent employers must declare that no U.S. employee has been or will be displaced during the 90 days before or after the filing of an H-1B petition. They must also attest that they have taken good faith steps to recruit for the position using industry-wide standard practices and have offered the job to all U.S. applicants who are as qualified as or more qualified than the H-1B worker.

An H-1B dependent employer also cannot place an H-1B worker with another company unless the employer also declares that, after inquiry, it has no knowledge that the other company has displaced or will displace a U.S. worker within the 90-day periods surrounding the placement. This new requirement focuses upon the employee-leasing industry.

The new attestation provisions do not apply to a petition for an H-1B who holds at least a master’s degree or the equivalent in a field related to the intended employment or who is paid at least $60,000 annually, including cash bonuses or other similar compensation. The H-1B dependency determination is, however, an ongoing employer obligation affecting all current filings, whether for new or extended H-1B status.

The I-9 audit: Diagnose yourself before the INS does it for you. News flash: The INS has recently increased the fines for violation of I-9 requirements. It’s no news that employers should regularly audit their I-9 records to identify troublesome I-9 practices and minimize "surprises" and related fines in the event of a real INS audit, but what is the most effective way of doing so?

The first decision should be whether you will conduct a full audit or a "sample" audit, in which you examine only a portion of your facility’s records. Sampling saves both time and money, especially when I-9 compliance is strong and a full audit is not merited based upon the sampling. Ideally, a "sample" audit will be conducted only where the facility has at least 300 I-9 records so that the pool of records is large enough to render a 10% sample significant.

During the audit (whether full or sample), one of the most useful tools for an employer is a listing of all employees hired since November 6, 1986, the effective date of the Immigration Reform and Control Act, which requires I-9s. The list should include not only names, but also dates of hire and termination if applicable. If it is impossible to create a list dating back this far, a list of recent or even current employees will be sufficient.

Constangy attorneys are available to help your company conduct an internal I-9 audit.

You Got A Sample For Me?

The following is a sample self-identification form that complies with the new requirements:

Dear Applicant:

This Company is an Equal Opportunity/Affirmative Action employer and subject to certain reporting and affirmative action requirements. The information required on this insert is requested only so that we may meet our Equal Opportunity/Affirmative Action obligations. Your completion of this form is purely voluntary and will not, in any way, affect your consideration for employment. This insert will be separated from your application and will be separately maintained.

How were you referred to our Company?
Ad____ Walk-In____ Agency (Specify)____ Employee (Who?)____
State Employment Service____ Other____

Please select the appropriate information for each category:
1) Sex: ___Male ___Female

2) Ethnicity: ___Hispanic/Latino ___NOT Hispanic/Latino

3) Race: __American Indian or Alaska Native
___Black or African American
___Native Hawaiian or Other Pacific Islander

Applicant’s Name (please print) Applicant’s Signature


Thank you for your assistance.


Life is beautiful. Thus far, the U.S. Supreme Court has been eminently reasonable in most of the decisions it’s issued in employment cases. For example, employers who provide more than 12 weeks of leave do not automatically owe their employees another 12 weeks just because they forgot to do the FMLA paperwork, employees must be really disabled to be protected by the ADA, employers don’t have to pay back pay to illegal alien employees. . . .

What a difference a year makes. A federal court in New York threw out an age discrimination lawsuit by a 71-year-old executive who was fired. His age when he was hired by the same group of people? 70.

You snooze, you lose. A federal court in Kansas held that an employer did not owe overtime pay for time that an employee spent sleeping (albeit on premises).

How come we can’t grasp this concept? Not an employment case, but we’ve just gotta mention it: In Great Britain, 36 plaintiffs sued McDonald’s over hot coffee, just like in the infamous American lawsuit. But, unlike our American plaintiff who got a huge verdict (later reduced through a settlement), the court in Britain threw out the lawsuits, sensibly ruling that one should expect one’s coffee to be hot.

"NOW can we fire him? Please?" In a "Flails" column a few issues ago, we had an item about an arbitrator ordering an employer to reinstate a man who was terminated after he allegedly killed another father at their sons’ hockey practice. The arbitrator "reasoned" that the alleged killing was not work-related and thus not a legitimate ground for discharge. A jury recently found "devoted dad" Thomas Junta guilty of involuntary manslaughter, and he was sentenced to six to 10 years, which raises the question —will the arbitrator let his employer fire him for attendance now that he’s in the pen?


Maybe the Abbott & Costello version would be a reasonable accommodation. A federal judge in Maryland refused to dismiss an ADA lawsuit in which the plaintiff, an actress, alleged that she suffered from post-traumatic stress disorder and depression that were aggravated by, among other things, people who raised their voices. She sued under the ADA after being fired by a theater company that was performing Dr. Jekyll and Mr. Hyde.

"But if I hadn’t been fired, I’d have worked there forever...if I hadn’t died." A federal court in Michigan affirmed a front pay award in an age discrimination case filed by the widow of an employee who committed suicide before the suit was even filed.

Ach du lieber! If you think it’s hard to terminate employees in the U.S., just be glad you don’t live in Germany, where they actually try to force you to hire people you don’t need. The Westphalia region (where the good ham comes from) has issued a regulation stating hog farmers must give each of their charges 20 minutes of personal attention each day. The hog farmers claim that the mandatory pig-caressing will pretty much fill their entire work day... unless they hire more employees to perform this useless activity.

Jury also believes word "gullible" is not in dictionary. A plaintiff in a sexual harassment case won $215,000 even though she reportedly admitted that she had consented to the relationship. The California jury bought her claim that she "couldn’t resist" the advances of the "harasser" because she was a victim of childhood sexual abuse. And, as the cherry on top of the sundae of injustice, the employer of both individuals is the one who has to pay.


Teresa "Sam" Smith (Nashville, TN) has attained the Professional Legal Secretary designation from the National Association of Legal Secretaries.... Congratulations, Sam!


Constangy attorneys have been published in the following "out-of-house" publications:

Mel Haas, Bill Clifton and Jonathan Martin (Macon, GA) "Labor and Employment Law" chapter of Annual Survey of Georgia Law, Mercer Law Review (Fall 2001)....

Bill Principe and David Smith (Atlanta, GA) "OSHA Injury & Illness Recordkeeping—Best Practices," The Leader (August 2001)....


White Company has a vacant Vice President position. Bill, who is African-American, is the ideal person for the job—he has the right education and experience, and he is smart, respected, creative, and a "team player." Despite Bill’s obvious superior qualifications, the president of the company offers the position to his no-good nephew, Beavis, who graduated from the local technical college and has no relevant work experience. Since Beavis is white and not nearly as qualified as Bill, does Bill have a valid race discrimination claim against White Company?


Unfair as it is, the answer is probably not. Although normally offering a position to a less-qualified white employee would form a strong basis for a discrimination claim, the courts say that employment decisions based on "favoritism" or nepotism, as opposed to race or other legally protected factors, do not violate the anti-discrimination laws. Thus, to prevail in a lawsuit against White Company, Bill would have to present evidence that the president was motivated by race rather than the fact that Beavis was his nephew.

Of course, the "legal" answer and the "fair" answer are two different things. Employers who make decisions based on favoritism risk poor morale, which can lead to nuisance EEOC charges and lawsuits, and even union campaigns. Putting Beavis in charge is probably none too good for White Company’s business objectives, either!


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