EEOC votes 2-1 to propose rescinding requirement for firms with 100+ workers to report race and gender data

The Equal Employment Opportunity Commission rescinds its requirement that employers report their workforces' demographic makeup.

Every year, going back to the latter half of the 1960s, many American employers—including private companies with at least 100 workers—have had to report the racial and sexual makeup of their workforces to the Equal Employment Opportunity Commission (EEOC).

That requirement may soon come to an end, thanks to 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 government demand for these data
• Potential constitutional problems
• Implied DEI pressure inherent in the reporting requirement

Key caveats include:

• 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 highlights several 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 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, to say nothing of the burdens 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 have to 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, including California's, remain in play

Tradeoffs to Consider

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 example:

• The Trump administration has sought to increase demographic data from colleges to expose ongoing use of racial preferences
• Without routine reporting, data would have to be obtained through subpoenas and requests for information
• If not collected, the data 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 announcing 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 big companies (including Nike) have voluntarily made their EEO forms public, researchers and media outlets have also used them to track how companies generally operate.

Photo by Spencer Platt/Getty Images