For employers who must file an EEO-1 report, those with 100 or more employees or federal contractors or subcontractors with 50 or more employees, the demographic collection has been fairly consistent over the past 10 years.  However, times are changing, and as more groups are lobbying to separate themselves from the traditional reporting demographic groups coupled with diversity requests, life is going to be more interesting for HR.

On January 26, 2023, the Office of Management and Budget (OMB) published a notice in the Federal Register seeking comments on proposals to revise the race and ethnicity standards in OMB's 1997 Statistical Policy Directive No. 15: Standards for Maintaining, Collecting, and Presenting Federal Data on Race and Ethnicity (SPD 15). According to the notice, the proposals, which the OMB's Federal Interagency Technical Working Group developed, seek "to improve the quality and usefulness of Federal race and ethnicity data."  So, what does that mean?

The 1997 standards require that respondents self-identify their race and ethnicity in two separate questions: first, with which ethnicity do they identify (i.e., "Hispanic or Latino" or "Not Hispanic or Latino"), and second, with which race do they identify (i.e., "American Indian or Alaskan Native," "Asian," "Black or African American," "Native Hawaiian or Other Pacific Islander," or "White"). If they answer more than one race, they would be identified as “Two or More.”

The current race structure is as follows:

• White (not Hispanic or Latino) – A person having origins in any of the original peoples of Europe, North Africa, or the Middle East.
• Black or African American (not Hispanic or Latino) – A person having origins in any of the black racial groups of Africa.
• Asian (not Hispanic or Latino) – A person having origins in any of the original peoples of the Far East, Southeast Asian, or the Indian subcontinent including for example, Cambodia, China, India, Japan, Korea, Malaysia, Pakistan, the Philippine Islands, Thailand, and Vietnam.
• American Indian/Alaskan Native (not Hispanic or Latino) – A person having origins in any of the original peoples of North America and South America (including Central America), and who maintains tribal affiliation or community attachment.
• Native Hawaiian or Other Pacific Islander (not Hispanic or Latino) – A person having origins in any of the original peoples of Hawaii, Guam, Samoa, or other Pacific Islands.
• Two or More Races (not Hispanic or Latino) – All persons who identify with more than one of the above five races.

Interestingly, the 1997 standards expressly speak against a Two or More Races category and these proposed standards speak against such a category, yet it was included in the previous collection document.

The OMB group is asking the public to weigh in on various options.  First, OMB is asking whether the two-question approach is confusing and if just asking one question encompassing all would be a better way to collect the data.  Therefore, the race question would add in:

• Hispanic or Latino – A person of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish culture or origin, regardless of race.

By adding Hispanic or Latino into the current list, if a person selects that and one other race, it would automatically default to Hispanic. Although the language in the description states that, many do not read the fine print and will select another option if provided as well.

Next OMB wants to separate White European origin from North Africa and Middle East origin.  In other words, make 'Middle Eastern or North African' (MENA) as a new minimum category. This discussion has been going on for many years.  It has been argued that MENA origins are considered different than European and thus classified separately.  Yet, it could be argued that MENA may consider themselves of a specific religion (Islam as it is the majority religion throughout the region), and anyone of different religion may not be MENA even though they are from that region.

Finally, OMB wants to determine if more granularity in collection of data should be made.  OMB stated that there is a need for this detailed data collection due to an "increasing demand for analysis that represents the diversity of the American public." One example included in the notice would allow respondents to check a box for their race and then check other subcategories with which they identify. Under this example, if a respondent identifies as "White" the respondent would then be able to further identify as "German," "Irish," English," "Italian," etc.  Further, there is a question of dividing out East Asian and South Asian. 

For HR, if changes are made in the collection of demographics, they will have to ensure all their HRIS systems and forms are updated for collection of this data and will have to conduct a new survey of their workforce to meet the new data collection requirements for reporting purposes – and gender identity demographics are not even in discussion except in a few states such as California and New York.  On a side note, census data supporting these changes likely will not be available until 2030.

Comments on the proposals are due by April 12, 2023, and OMB has a stated goal of completing the revisions by the summer of 2024.

Source: Ogletree Deakins 2/17/23