EEOC’s New Plan Targets Gig Work, Talent Analytics

By Roy Maurer Oct 24, 2016
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Heads up, employers: The Equal Employment Opportunity Commission (EEOC) has approved a new strategic enforcement plan—essentially its list of priorities for the next four years.

The plan addresses contingent work and the on-demand economy, people analytics in recruitment, and discrimination against Muslims, among other issues.

Employers should take a look at the plan's executive summary, said Mark Kisicki, an attorney with Ogletree Deakins in Phoenix. "It will give them a good sense of the agency's priorities. The EEOC has done a very good job in the past of following its strategic enforcement plan, so employers should be aware that the agency tends to do what it says it's going to do."

The 21st Century Workplace

The EEOC announced it intends to examine "issues related to complex employment relationships and structures in the 21st century workplace," meaning the gamut of contingent arrangements— staffing agencies and temp workers, independent contractors and gig working situations—that have arisen.

The McKinsey Global Institute reported that up to 30 percent of working-age people in the United States and Western Europe are engaging in independent work, either as their primary or a supplemental source of income. "That's 162 million people—almost 60 million in the U.S.," said Susan Lund, a partner at the McKinsey think tank based in Washington, D.C.

Earlier this year, the U.S. Department of Labor (DOL) announced plans to gather more reliable statistics about the number and characteristics of contingent and gig-type workers. The DOL will attach questions about alternative or contingent work arrangements to the May 2017 Current Population Survey, used to publish monthly reports on the labor market.

The typical concern with gig work is whether the workers are employees or contractors, added Michael Lotito, a shareholder in the San Francisco office of Littler and co-chair of the law firm's Workplace Policy Institute. "But the EEOC recognizes that this is a significant issue and is grappling with how to protect these types of workers from discrimination."

The agency may also bring more enforcement cases under the controversial joint employer theory in which partner entities such as staffing agencies and client employers are held liable for a labor violation committed by either one.

"Certainly the EEOC is geared up to bring more cases under joint employment," Lotito said. "They already have a more expansive view as to what joint employment means under Title VII [of the Civil Right Act of 1964]."

The Dangers of Big Data

The EEOC also has data-driven selection tools and processes in its crosshairs, specifically predictive talent analytics, job-matching algorithms, online sourcing tools, prehire assessments and employment screens. The agency held a hearing Oct. 13 on the potentially discriminatory role that data plays in hiring and recruiting. 

EEOC staff expressed concern that algorithms could match demographic characteristics rather than job skills or requirements, and feared selection tools may have an adverse impact on protected categories or could invade employee privacy.

A 2015 Economist Intelligence Unit survey found that 82 percent of organizations plan to begin or increase their use of big data analytics in employment over the next three years.

"Big data has the potential to drive innovations that reduce bias in employment decisions and help employers make better decisions in hiring, performance evaluations and promotions," but "at the same time, it is critical that these tools are designed to promote fairness and opportunity, so that reliance on these expanding sources of data does not create new barriers to opportunity," said EEOC chairwoman Jenny Yang.

The EEOC will be on the lookout for disparate treatment—employers using these tools and algorithms to discriminate against protected groups, said Eric M. Dunleavy, director of the Personnel Selection and Litigation Support Services Group at DCI Consulting, an HR risk management consulting firm specializing in equal employment opportunity and affirmative action compliance. But, "if decisions on the front end did not directly consider protected group status, then intentional discrimination as a function of the algorithm may not be an issue of concern."

Employers can avoid disparate impact—policies, practices, rules, or other systems that appear to be neutral, but result in an unintentional disproportionate impact on a protected group—by following the EEOC's Uniform Guidelines on Employee Selection Procedures, which apply to all employers that use tests in making employment-related decisions.

"The first general question of interest may be whether the tool has substantial adverse impact on members of a protected group," Dunleavy said. "If it does, the second question relates to job relatedness and business necessity, and traditional concepts of validation may apply."

'Backlash' Discrimination

Another new area in the enforcement plan tackles "backlash" discrimination against Muslims, Sikhs and those who are or are perceived to be of Arab, Middle Eastern or South Asian descent. Discrimination against people within these communities has increased due to terrorist events in the U.S. and abroad.

"This is not surprising, considering the issues involving terrorism and the fear of what is happening around the world," Lotito said. "It's very easy to engage in stereotypes. Fundamentally, the EEOC's mission is eliminating stereotypes so individuals are considered on their merits. That core principle is consistent with taking a look to make sure there's no backlash against any category of people."

Additional reporting done by Lisa Nagele-Piazza.

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