Risk Considerations As EEOC Moves To Ax Data Reports

On July 23, the U.S. Equal Employment Opportunity Commission published a proposed rule to rescind regulations requiring EEO-1 Component 1 reports and other workforce demographic reports and related recordkeeping.[1]

The public comment period closed on Aug. 24, generating more than 2,800 comments. The EEOC is now reviewing this feedback as it considers whether — and in what form — to issue a final rule.

Employers should keep in mind that the proposed rule is not yet final, so EEO-1 compliance obligations remain in effect, and additional state and local demographic reporting requirements may apply independently of federal law. Nonetheless, employers that are voluntarily collecting demographic data should implement safeguards to minimize legal risk.

The Elements of an EEO-1

EEO-1s are — at least for now — forms that disclose workforce demographic data to the EEOC. Private sector employers with 100 or more employees and federal contractors with 50 or more employees have long been required to collect demographic information for EEO-1s and submit them annually. Such information

includes the number of employees by job category — such as managers or laborers — race or ethnicity, and sex.

EEO-1s also impose recordkeeping requirements to maintain demographic data in the event of an investigation. Historically, the EEOC enforced these obligations and collected this data to help identify potential employment discrimination.

The EEOC’s Critiques

Today, the EEOC is singing a different tune. In its proposed rule and accompanying press release issued in July, the agency maintained that EEO-1s may contradict federal antidiscrimination law, implicate constitutional concerns and collect overbroad data.[2]

Specifically, the EEOC preliminarily concluded that collecting EEO-1 reports — untethered from any specific discrimination claim — may violate the U.S. Constitution’s equal protection guarantees because EEO-1s “compel employers to classify employees by race and sex and cannot be justified to support the EEOC’s enforcement efforts.” The EEOC offered four reasons for this preliminary conclusion.

Impermissible Focus on Women and Minority Groups

The EEOC cited the genesis of EEO-1s in 1966 as a tool for monitoring progress toward achieving Title VII’s “mandate of workplaces free of discrimination.” According to the EEOC, Title VII was passed in 1964 “to

address entrenched and widespread discriminatory practices that permeated American workplaces and denied millions of workers the same opportunities as others merely because of their race or sex or some other factor unrelated to job performance.”

The EEOC then recounted what it views as decades of narrow focus on discrimination against minorities and women, placing EEO-1s squarely in that line of fire. The agency found that the reports’ predetermined categories create an unsustainable dichotomy between majority and minority groups.

Racial Categories That Aren’t Grounded in Law and Promote Stereotyping

The EEOC also took issue with the predetermined categories in EEO-1 reports, characterizing them as arbitrary, overbroad and underinclusive — and thus not reflective of the agency’s enforcement needs. For example, the EEOC noted that the Asian category encompasses individuals from dozens of countries with vastly different histories and experiences, while categories like Middle Eastern are absent entirely.

After outlining the history of various racial labels used in EEO-1 reports over the decades, the EEOC suggested that the reports are conducive to stereotyping in ways that are “antithetical to the Title VII requirement that employer actions be colorblind.” Notably, however, the agency cited as exemplars much more recent cases involving alleged stereotyping of white employees.

Misuse of Data

Third, the EEOC deemed demographic data as being subject to potential misuse. Specifically, the agency is concerned that employers could take discriminatory actions to correct statistical imbalances reflected in the data, even if they have an innocuous explanation, or that employers could otherwise use the data to address perceived inequities by conferring preferences based on protected traits. In this sense, the EEOC considered that EEO-1s may have the unintended effect of promoting discrimination, rather than reducing it.

Potential Equal Protection Violations

Lastly, the EEOC contended that EEO-1s amount to “government-imposed racial classifications” that must satisfy strict scrutiny — the most demanding standard of constitutional review. Under strict scrutiny, a classification survives only if it is narrowly tailored to achieve a compelling governmental interest.

Because the EEOC viewed much of the demographic data as irrelevant to determining whether unlawful discrimination occurred, it concluded that mandatory collection serves no compelling purpose. The agency further reasoned that the blanket collection of demographic information, untethered to any specific charge or investigation, cannot qualify as narrowly tailored.

Where EEO-1s Stand Now

The EEOC’s rationale for eliminating EEO-1s echoes the agency’s broader approach to antidiscrimination efforts under President Donald Trump. However, not all stakeholders are on board with this latest move.

The agency held a public hearing on Aug. 11, at which 22 stakeholders shared testimony regarding the

proposed rule.[3] More witnesses voiced opposition to the rule than support for it, though the hearing covered the issue from many angles. Whether the EEOC will abandon, modify or finalize the proposed rule as written remains to be seen.

In the meantime, current EEO-1 obligations remain in effect. Employers should therefore continue their compliance efforts and avoid making immediate changes to demographic data collection or recordkeeping practices based solely on the proposed rule’s issuance.

State Law Considerations

Employers operating in multiple jurisdictions face the challenge of reconciling potentially conflicting obligations. To navigate this landscape, employers should: (1) audit existing data collection practices to identify gaps and redundancies; (2) monitor both federal and state developments so compliance programs can adapt quickly; (3) centralize demographic data governance to ensure consistent handling across business units; and (4) develop jurisdiction-specific compliance road maps that account for different reporting deadlines, data fields and retention requirements.

While EEO-1s are a federal requirement, state and local jurisdictions may impose similar disclosure obligations. For example, California, Colorado, Illinois and Massachusetts have reporting requirements that require large employers to disclose data on race or ethnicity and gender — and some also require compensation information.[4] Thus, depending on jurisdiction, employers may be required to continue collecting demographic data regardless of whether the EEOC issues a final rule eliminating EEO-1s.

Accordingly, in addition to the fact that the EEOC has not officially rescinded EEO-1s, employers should verify their state and local compliance obligations before dismantling their data collection infrastructure.

Takeaways for Continued Data Collection

Outside of state law obligations, some employers are asking whether they could — or should — choose to collect demographic data if the proposed rule passes as currently written. Moreover, given the EEOC’s stance against EEO-1s, does collecting such data absent legal obligations create risk?

The proposed rule does not bar employers from collecting the underlying data compiled in EEO-1 reports, and employers may have legitimate, nondiscriminatory reasons to do so. For example, such data could prove to be helpful in defending a discrimination claim or conducting a pay equity analysis.

On the other hand, if the EEOC does ultimately rescind EEO-1s, employers should be especially mindful to gather, store and use such information in legally defensible ways. For instance, collecting data only through voluntary self-identification and implementing role-based access restrictions that shield the data from decision-makers who do not need it could help demonstrate that the data is not subject to the misuse contemplated by the EEOC.

After 60 years, mandatory annual EEO-1 reporting may soon be a thing of the past — but not yet. For now, covered employers should continue current compliance efforts and stay apprised of future developments.

• https://www.federalregister.gov/documents/2026/07/23/2026-14937/removal-of-reporting-requirements.
• https://www.eeoc.gov/newsroom/eeoc-proposes-rescission-annual-race-and-sex-reporting-requirements.
• https://www.eeoc.gov/meetings/notice-commission-hearing-August-11/transcript.
• See Cal. Gov. Code § 12999; Colo. Rev. Stat. § 8-5-201; 820 ILCS 112/11; and Mass. Gen. Laws ch. 151B, § 4(11A).

This article was originally published in Law360 on September 21, 2026, and is republished here with permission.