Should all employers collect demographic data on applicants and employees? If so, when?

While some employers are required to track demographic information on applicants and employees, it is a recommended practice for all employers to protect against unlawful discrimination claims and to monitor diversity efforts.

Requirements

Employers with 100 or more employees are required to file an EEO-1 report with the Equal Employment Opportunity Commission (EEOC) by March 31 of each year. Government contractors with 50 or more employees and at least $50,000 in federal contracts must also complete an EEO-1 report. The report tracks race and gender information of employees but not of applicants. This demographic information should be collected post-hire and must be voluntary for the employee. The data collected are used to help determine if unlawful employment practices are being committed.

Federal contractors with affirmative action requirements must collect demographic data on applicants. These data may include race, gender, disability and veteran status, depending on the acts under which the employer is obligated to collect this information. When collected to meet regulatory requirements, this information can be collected pre-hire on all qualified applicants, but it must be voluntary on the part of the applicant. Federal contractors must also invite applicants to self-identify as a protected veteran post-offer as well as pre-hire.

Recommendations

The Uniform Guidelines on Employee Selection Procedures (UGESP) are guidelines the courts use to determine if unlawful hiring practices were the basis of a discrimination claim. Although not required by law, applicant tracking is recommended by these guidelines for all employers covered under Title VII and can be done pre-hire when it is part of an employer's decision to follow the guidelines. Adherence to these guidelines would strongly suggest an employer is free from unlawfully discriminatory hiring practices.

Whether operating under the UGESP or not, employers may need applicant demographic data to measure the validity of a selection procedure. For example, if an employer implements a pre-employment test that measures typing skills, it is essential to determine if the test is eliminating protected class members at a higher rate than candidates who are not members of a protected class. To measure this impact, it is necessary to collect information on candidates' demographics at the time of application or testing. When done with this goal in mind, and when voluntary for the applicant, collecting these data pre-hire is permissible.

In addition, proactively tracking the race and gender of applicants can help contribute to a more diverse work environment. When tracking demographic data, HR can periodically review its recruitment strategy and hiring decisions to make adjustments that may result in a more diverse applicant pool and, in turn, a more diverse workforce.