The U.S. Equal Employment Opportunity Commission


EEOC NOTICE
Number 915.002 
Date 5/2/97

1.     SUBJECT.  Enforcement Guidance on Equal Employment 
Opportunity Commission & Walters v. Metropolitan Educational 
Enterprises, Inc., 117 S.Ct. 660 (1997).

2.     PURPOSE.  This enforcement guidance analyzes the 
Metropolitan decision and provides guidance on how to count 
employees when determining whether the Respondent satisfies the 
jurisdictional prerequisite for coverage under Title VII, the 
ADA, and the ADEA. 

3.     EFFECTIVE DATE.

4.     EXPIRATION DATE.  As an exception to EEOC Order 205.001, 
Appendix B, Attachment 4,  a(5), this Notice will remain in 
effect until rescinded or superseded.

5.     ORIGINATOR.  Title VII/EPA Division, Office of Legal 
Counsel

6.     INSTRUCTIONS.  File after  605.8(b) of Volume II of the 
Compliance Manual. 

7.     SUBJECT MATTER.

I.     Introduction

The Supreme Court has held that the "ultimate touchstone" in 
determining whether an employer has a sufficient number of 
employees to satisfy the jurisdictional prerequisite for coverage 
under Title VII of the Civil Rights Act of 1964, as amended, 42 
U.S.C.  2000e(b), is "whether an employer has employment 
relationships with 15 or more individuals for each working day in 
20 or more weeks during the year in question." Equal Employment 
Opportunity Commission and Walters v. Metropolitan Educational 
Enterprises, Inc., 117 S.Ct. 660, 666 (1997).  The Court adopted 
the EEOC's position that employees should be counted whether or 
not they are actually performing work for or being paid by the 
employer on any particular day. 

In Metropolitan, the Court interpreted  701(b) of Title VII, 
which defines a covered employer as one who "has fifteen or more 
employees for each working daily in each of twenty or more 
calendar weeks in the current or preceding calendar year.@1  The 
Commission has interpreted this provision to include employers 
who have an employment relationship with 15 or more employees for 
the relevant days, regardless of the daily work schedules of the 
individual employees.  See EEOC Policy Guidance No: N-915-052, 
"Whether Part-time Employees Are Employees Within the Meaning of 
 701(b) of Title VII and  11(b) of the ADEA," April 20, 1990, 8 
FEP Manual (BNA) 405:6857, EEOC Compliance Manual (CCH) & 2167 
("part-time employees are counted whether they work part of each 
day or part of each week").       


The method the Court adopted is often called the "payroll method" 
because "the employment relationship is most readily demonstrated 
by the individual's appearance on the employer's payroll." Id. at 
663-64.  However, the Court stressed that "what is ultimately 
critical is the existence of an employment relationship, not 
appearance on the payroll."2 Id. at 666.  The Court upheld the 
EEOC's interpretation, reasoning that "an employer 'has' an 
employee if he maintains an employment relationship with that 
individual" on the day in question. Id. at 664 (emphasis added).  
The Court rejected Metropolitan's interpretation that an employer 
"has" an employee for a particular working day only when it is 
actually compensating the employee for that day. Id. at 664.   

The Court also disagreed with Metropolitan's argument that the 
EEOC's interpretation rendered the statutory phrase "for each 
working day" superfluous.  Without the phrase, the Court said, it 
would be unclear how to count an employee who departs in the 
middle of a calendar week or an employee who departs after the 
end of the workweek, but before the end of the calendar week. Id. 
at 664-65.  The Court held that "all one needs to know about a 
given employee for a given year is whether the employee started 
or ended employment during the year and, if so, when.  He is 
counted as an employee for each working day after arrival and 
before departure." Id. at 665-66.

The Court noted Metropolitan's argument that the EEOC's 
interpretation could produce some "strange consequences," such as 
counting an employee who works irregularly only a few days a 
month. Id. at 665.  However, the Court observed that 
Metropolitan's approach "produces unique peculiarities of its 
own." Id. at 665.  For example, by counting employees only on the 
days that they are compensated, a half-time worker who works 
every morning would be counted, while one who works on alternate 
days would not. Id. at 665.  Also, Metropolitan's approach "would 
turn the coverage determination into an incredibly complex and 
expensive factual inquiry."  Id. at 665.  "For an employer with 
15 employees and a 5-day workweek, the number of daily working 
histories [that would have to be examined] for [a] two year 
period is 7,800." Id. at 665.  

II.     Charge Processing


The Supreme Court's decision accords with the longstanding 
Commission position that all workers who have an ongoing 
employment relationship with an employer are counted for purposes 
of determining coverage.3  The phrase "for each working day" 
means simply that an employee is counted as an employee for each 
working day starting on the day that the employment relationship 
begins and ending on the last day of the employment 
relationship.4 

There should be fewer disputes about the number of employees in 
an employer's workforce because the Court has made the rules 
clear and simple.  The Commission will assume in the first 
instance that all individuals who perform work for the Respondent 
are employees.  However, if a Respondent alleges that some 
individuals are not employees and/or alleges that it has fewer 
than the jurisdictional prerequisite of 15 employees for Title 
VII and ADA coverage or 20 employees for ADEA coverage, it will 
be necessary to obtain and evaluate additional information. 

A.     Information to Be Requested from Respondents Who Claim to 
Fall Below the Jurisdictional Thresholds

Since the information needed will vary from case to case, 
information requests should be tailored to address the disputed 
facts.  Typically, it will be most effective to focus on records 
about those workers whose employment status or dates of 
employment are in dispute.  In other situations, it will be more 
efficient to obtain records of all workers.  The types of records 
that should be sought will typically include: 

1.      Payroll records and employment contracts relating to 
relevant workers for the year of and the year preceding the 
alleged adverse employment action.  Include contracts that 
involve workers provided by temporary employment agencies, 
contract firms, and other types of staffing firms.  For example, 
include maintenance workers and security personnel assigned by a 
contract firm and temporary clerical personnel assigned by a 
temporary employment agency.

2.     Personnel, payroll and/or contract documents that reflect 
the  dates that the disputed workers began and/or ended their 
employment relationship with the Respondent.

B.     Determining Who Qualifies as an Employee


1.     Evaluate whether the worker(s) whose status is disputed 
are  employees or are, instead, independent contractors or 
otherwise not employees.  To make this determination, consult  
EEOC Enforcement Guidance No: N-915, "Title VII Coverage of 
Independent Contractors and Independent Businesses," September 4, 
1987; and EEOC Enforcement Guidance No: N-915.007, "Whether 
Individuals Who Are Partners, Officers, Directors, or Major 
Shareholders in Organizations May Be Considered Employees Under 
Title VII, ADEA, and the EPA," July 14, 1987.

*     Example: The Respondent is a publishing company with 
fourteen employees. It has recently installed a new computer 
system in its office. The Respondent contracted with an expert 
computer technician (worker) to perform a myriad of duties 
relating to the installation of, and training on, the new system. 
The worker's contract will expire in six months. The Respondent 
alleges that this worker is an independent contractor, and not an 
employee. The Respondent does not supervise the worker or control 
the details of how she performs her job. The worker is engaged in 
a distinct occupation which requires special knowledge and 
expertise. The contract, and thus the relationship with the 
Respondent, will end at a specified time.  The worker is not paid 
by the hour, but paid to complete the specific job. In this case, 
the worker would be found to be an independent contractor and not 
counted as an employee.

2.      Determine whether the employees have an employment 
relationship with the Respondent.  Some employees who perform 
work for the Respondent may be employees of other businesses, 
such as temporary employment agencies or contract firms, but may 
also be employees of the Respondent.  Consult EEOC Enforcement 
Guidance No: N-915, "Concepts of Integrated Enterprise and Joint 
Employer," May 6, 1987, and EEOC Enforcement Guidance No: N-917-
002, "Employment Agencies," September 20, 1991, 8 FEP Manual 
(BNA) 405:6951 (Section I, C.).  Such employees should be 
included in Respondent's employee count.    

*     Example: A temporary employment agency hires, pays, and 
assigns legal secretaries to the Respondent's law firm.  The 
Respondent supervises, establishes work schedules, and assigns 
duties to the secretaries. If the Respondent is dissatisfied with 
any secretary, it can require the agency to remove him/her.  In 
this case, the agency and the Respondent exercise sufficient 
control over the secretaries to both be deemed their employer.  
The secretaries are counted as employees of both the Respondent 
and the agency.  

C.     Counting the Employees

The next step is to count the employees.  The investigator should 
do the following:


1.     Determine the first and last day of the Respondent's 
workweek.

*     Example: The Respondent is a clothing store. The store is 
open Monday through Saturday. Every day that the Respondent has 
employees scheduled to work is a working day for the Respondent. 
Accordingly, the Respondent's workweek is Monday through 
Saturday.

2.     If an employee began employment during either year in 
question, that employee is counted as an employee for each 
working day after arrival.  For example, if an employee started 
work on a Friday, that employee would be counted as an employee 
on that Friday and thereafter.
   
3.     If an employee ended employment during either year in 
question, that employee is not counted as an employee after 
his/her departure.  For example, if an employee ends his/her 
employment on Wednesday, (s)he is counted as an employee up to 
and including Wednesday, but (s)he is not counted after 
Wednesday.

*     Example: If an employer's workweek is Monday through Friday 
and during one of the weeks examined, it had fourteen employees 
plus Employee A who ended his employment on Tuesday and Employee 
B who started her employment on Wednesday of the same week, then 
the employer has fifteen employees for each working day for that 
workweek.  

*     Example: If an employer's workweek is Monday through Friday 
and during one of the weeks examined, it had fourteen employees 
plus Employee A who ended his employment on Tuesday and Employee 
B who started her employment on Thursday of the same week, the 
employer did not have fifteen employees for each working day of 
that workweek because it only had employment relationships with 
fourteen employees on Wednesday.  

4.     To determine the employee count for each week examined in 
the relevant years: a) calculate the number of workers who were 
on the payroll; b) subtract any workers who were on the payroll, 
but were not employees; and 3) add any workers who were not on 
the payroll, but who qualified as employees of the Respondent. Do 
not count any week where the Respondent had employment 
relationships with fewer than the jurisdictional prerequisite of 
15 employees for Title VII and ADA coverage, or 20 employees for 
ADEA coverage, for each working day of a particular week.   

If the jurisdictional prerequisite is not met, determine whether 
the Respondent is integrated with another employer. See EEOC 
Policy Statement No: N-915, "Concepts of Integrated Enterprise 
and Joint Employer," May 6, 1987, for a discussion of how to 
determine whether the Respondent is integrated with another 
employer.  If the Respondent is integrated with one or more other 
employers, determine whether the combined number of employees of 
the integrated employers meets or exceeds the jurisdictional 
prerequisite.





May 2, 1997                     -S-                               
_____________         __________________________________
Date                  Gilbert F. Casellas                          
                      Chairman                                      



1.     The Court's analysis also applies to the Age 
Discrimination in Employment Act of 1967 (ADEA) and the Americans 
with Disabilities Act of 1990 (ADA), which have 
similar statutory language.  Section 101(5)(A) of the ADA, 42 
U.S.C.  12111(5)(A), defines an employer as one who "has fifteen 
or more employees for each working day in each of twenty or more 
calendar weeks in the current or preceding calendar year."  
Section 11(b) of the ADEA, 29 U.S.C. 630(b), defines an employer 
as one who "has twenty or more employees for each working day in 
each of twenty or more calendar weeks in the current or preceding 
calendar year."

2.     The Court noted that an individual who was on the payroll, 
but who was not an "employee" under traditional agency 
principles, would not be counted.  Id. at 666.  The converse is 
also true.  An individual who has two joint employers would be 
counted as an employee of both employers even though the employee 
may be on the payroll of only one.  See EEOC Enforcement Guidance 
No: N-915, "Concepts of Integrated Enterprise and Joint 
Employer," May 6, 1987.

3.     EEOC Compliance Manual,  605.8(b)(2), concerning the 
counting of part-time and temporary employees, was clarified by 
the Enforcement Guidance on Part-time Employees.

4.     The phrase "in each of twenty or more calendar weeks in 
the current or preceding calendar year" means that the employer 
must have the  requisite number of employees for twenty or more 
calendar weeks in either the current or preceding calendar year.  
The weeks need not be consecutive. EEOC Compliance Manual, Volume 
II,  605.8(b).


This page was last modified on July 6, 2000.

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