EEOC votes 2-1 to propose rescinding mandatory workforce race and gender reporting for large employers

By Robert VerBruggen

The Equal Employment Opportunity Commission (EEOC) has rescinded its requirement that employers report their workforces' demographic makeup.

Every year since the latter half of the 1960s, many American employers—including private companies with at least 100 workers—have been required to report the racial and sexual makeup of their workforces to the EEOC.

That requirement may soon come to an end, following a 2–1 vote from the EEOC and a new proposed rule.

A Move in the Right Direction

The change addresses several concerns:

• The unseemliness of the government demanding these data
• Potential constitutional problems
• The implied DEI pressure inherent in the requirement

Key Caveats

• Employers may continue to collect the underlying information
• The numbers may occasionally be missed in legitimate lawsuits and investigations, including challenges to DEI practices
• A future administration can undo the change

Justifications for Rescission

In its Notice of Proposed Rulemaking, the EEOC highlighted several key justifications:

• The reporting requirements are not spelled out in law and lie within the agency's discretion
• To comply with the Constitution, the government's use of racial classifications must be narrowly tailored—wholesale, indiscriminate collection of workers' racial demographics via EEOC forms arguably crosses that line
• The forms risk encouraging employers to discriminate by race to make their numbers look more representative and avoid attracting regulators' attention
• Collecting the forms costs the EEOC a few million dollars every year, in addition to the burdens imposed on employers

Uncertain Effects

The new rule's effect will depend on several factors:

• Changes to other EEOC policies and courts' interpretation of the underlying statute could determine whether employers still must collect demographic data even if they no longer have to report it to the government
• Some firms may decide that the numbers' usefulness (including in responding to discrimination allegations) outweighs the risks of compiling them
• State-level data-disclosure requirements, including California's, remain in play

Potential Tradeoffs

If these data are no longer reported or perhaps even collected, they might be missed in legitimate discrimination investigations, including those challenging DEI practices. For context:

• In higher-education admissions, the Trump administration has sought to increase the amount of demographic data colleges provide to expose ongoing use of racial preferences
• If such data aren't reported routinely, they will have to be obtained through subpoenas and requests for information
• If they're not collected, they won't exist at all

Overall workforce statistics seldom prove bias on their own, but they can answer questions such as whether a company's demographics changed after it announced new DEI initiatives and numerical "goals." Data from EEO forms were cited, for example, during the EEOC's recent investigation into diversity initiatives at Nike.

Since many large companies (including Nike) have voluntarily made their EEO forms public, researchers and media outlets have also used them to track how companies generally operate.