EEOC Formalizes Plans to End Demographic Reporting Requirements

The U.S. Equal Employment Opportunity Commission (EEOC) on Tuesday, July 21, voted to issue a Notice of Proposed Rulemaking (NPRM) aimed at rescinding the annual employer data collection requirements that have been in place since 1966. If enacted, the rule would eliminate the obligation for covered private-sector organizations (those with 100 or more employees) to file EEO Data Reports — which include the EEO-1, EEO-2, EEO-3, EEO-4, EEO-5 and EEO-6 reports — summarizing aggregate data on their employees’ race and sex, as well as the related recordkeeping requirements. This would be a major shift for employers and the independent federal agency.

Currently, Title VII of the Civil Rights Act of 1964 requires organizations (most recent estimates put the number at more than 2 million) to file these annual reports regardless of whether the organization has ever been accused of a Title VII violation. The EEOC states this current data collection requirement imposes a staggering administrative burden, including:

• Almost $275 million in collective compliance costs on employers every year; and,
• Approximately $4 million for the agency to administer the collection.

In its 63-page NPRM, the commission determined that these EEO Data Reports are inconsistent with equal employment opportunity law and may raise constitutional concerns. The agency concluded that the data collected “is not narrowly tailored or strictly necessary to enforce anti-discrimination statutes,” particularly because employers must submit them annually without any specific indication of a potential violation. Under Title VII, the EEOC isn’t required to impose these obligations. The agency also stated that, under Title VII, it possesses the authority to eliminate the requirements when they are inconsistent with the law, not useful or counter to enforcement priorities.

The NPRM concludes that any limited value provided by the EEO reports is vastly outweighed by the significant burdens they place on employers and the commission alike.

“The commission’s proposal to rescind the EEO Data Reports is consistent with the text of Title VII and Supreme Court precedent,” said EEOC chair Andrea Lucas. “The proposed rescission of the EEO Data Reports reaffirms the founding principle that every individual is created equal and, therefore, is entitled to equal treatment under the law. Because the EEO Data Reports require all covered employers to categorize employees by race and sex annually, disconnected from any allegation of a Title VII violation or related commission enforcement proceeding, the EEO Data Reports stand in direct tension with Title VII’s requirement that employment practices be colorblind. Collecting such data about employees’ race and sex — absent any specific allegation of discrimination — not only risks hindering effective enforcement of equal employment laws but also raises constitutional concerns. The commission’s authority to request specific, tailored records relevant to a charge investigation, however, remains unchanged.”

The NPRM is set to be published in the Federal Register for a 30-day public comment period, after which the agency will consider all public comments and relevant data before making a final determination.

In the interim, employers subject to EEO-1 requirements should continue to comply with applicable reporting and record-preservation requirements and monitor the EEOC’s instructions. Employers also should keep in mind that they may still be subject to state and local workforce demographic or pay-data reporting requirements, as well as recordkeeping obligations under federal law.

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