To Collect or Not Collect - That is the Question!
Why am I, a traditional HR professional, advising caution when employers collect voluntary self-identification data from applicants and employees? Isn’t this a routine HR function? Read on and I’ll explain how the law of unintended consequences is ready to pounce here.
My head is still swimming and I am still suffering from recurrent whiplash since I last posted. The current chaotic environment takes me back to COVID-19 when I was working 24-7 to guide my clients through employee illness, lockdowns, PPP, layoffs, remote work and eventual return-to-work policies. Employment lawyers were on speed dial. The major difference between then and now is that the pandemic was thrust upon us by a deadly virus while the chaos today is largely self-imposed. Perhaps, we need a new version of Operation Warp Speed to bring some order and predictability back into the system.
Today’s HR headscratcher addresses Voluntary Self-ID or the collection of race, sex, disability and veteran data from job applicants and employees. Employers have for many years legally requested such identification data for legitimate, non-discriminatory reasons such as complying with federal and state reporting requirements, testing certain employment decisions for adverse impact or defending against claims of discrimination. For federal contractors or subcontractors, the data has also historically been necessary to comply with affirmative action requirements. We know that most affirmative action reporting requirements have been nullified by the President’s signing of Executive Order 14173, which among other things, rescinded Executive Order 11246. Since 1965, Executive Order 11246 prohibited employment discrimination by federal contractors and subcontractors on the basis of race, color, religion, sex, or national origin. Executive Order 14173 is challenging decades of established policy and the stated focus is “ending illegal discrimination and restoring merit-based opportunity” while also targeting “illegal and unlawful DEI” (terms still undefined).
The dilemma today is determining whether the collection and utilization of Voluntary Self-ID data for legitimate and non-discriminatory business reasons puts employers in the cross-hairs with the federal government. Despite the fact that such data remains necessary for employers to meet current compliance responsibilities for both federal and state reporting purposes, the Chair of the Equal Opportunity Commission has publicly hinted that collecting such data may be inconsistent with the current administration’s mission to root out anything that smells like “illegal DEI.”
What do employers do? I recommend waiting for more clarification from the administration before changing historical practices, especially if required reporting such as EEO-1 reporting remains intact. This is a good time however, to audit your policies for collecting, using and storing Voluntary Self-ID information to ensure that a) your purposes remain legitimate and non-discriminatory under current law; b) your process remains completely voluntary and is labelled as such for applicants and employees to see; and, c) the storage of the data protects the privacy of both applicants and employees. If your audit tells you need to modify your practices to meet any of the above three points, then make the modifications now.
Oh, and whatever you decide to do, I recommend you keep employment counsel on speed dial.
The opinions expressed in this blog are those of Zieleniec HR Solutions, LLC. We are not attorneys, and nothing expressed herein should be construed as legal, tax or accounting advice. We encourage our clients to consult with business attorneys, tax advisors and/or accountants for advice as appropriate.