US EEOC votes to rescind requirement for employers to report workforce race and gender data

By Robert VerBruggen

The Equal Employment Opportunity Commission (EEOC) has voted 2–1 to rescind its long-standing requirement that many American employers report the racial and sexual makeup of their workforces, issuing a new proposed rule that could bring the practice to an end.

Since the latter half of the 1960s, private companies with at least 100 workers—along with many other employers—have been required to submit this demographic data to the EEOC annually. That requirement may soon be eliminated.

Why the Change Matters

The move represents a step in the right direction, addressing several concerns:

• The unseemliness of the government demanding such data
• Potential constitutional problems with racial classifications
• The implied pressure to engage in DEI (diversity, equity, and inclusion) practices

However, key caveats remain:

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

The EEOC's Justifications

In its Notice of Proposed Rulemaking, the EEOC highlighted several justifications for ending the reporting requirements, which are not spelled out in law and fall within the agency's discretion:

• Constitutional concerns: 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.
• Risk of encouraging discrimination: The forms may encourage employers to discriminate by race to make their numbers appear more representative and avoid regulatory scrutiny.
• Cost: Collecting the forms costs the EEOC several million dollars annually, in addition to the burden on employers.

Uncertain Effects and Tradeoffs

The new rule's impact will depend on several factors, including whether a future Democratic-controlled EEOC reinstates the requirement.

Data Collection vs. Reporting

As Bloomberg Law noted, changes to other EEOC policies—and potentially courts' interpretation of the underlying statute—could determine whether employers must still collect demographic data even if they no longer have to report it. Some firms may decide the numbers' usefulness (including in responding to discrimination allegations) outweighs the risks of compiling them. State-level data-disclosure requirements, such as California's, also remain in play.

Impact on Discrimination Investigations

If these data are no longer reported or 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 racial preferences.
• Without routine reporting, such data would need to be obtained through subpoenas and requests for information.
• If not collected at all, the data would cease to exist.

Use of EEO Data

While aggregate workforce statistics rarely prove bias on their own, they can answer important questions—for example, whether a company's demographics changed after announcing new DEI initiatives and numerical "goals." EEO form data were cited during the EEOC's recent investigation into diversity initiatives at Nike.

Many large companies, including Nike, have voluntarily made their EEO forms public, allowing researchers and media outlets to track workforce trends.

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