The U.S. Equal Employment Opportunity Commission (EEOC) recently held a public hearing on its proposed rescission of EEO-1 reporting requirements. Most of the 22 individuals who spoke at the hearing asked the EEOC to retain or modernize the reporting requirements instead of eliminating them.
The current EEOC proposal would rescind EEO-1, EEO-2, EEO-3, EEO-4, EEO-5, and EEO-6 reporting requirements, as well as some recordkeeping and record preservation requirements. According to the EEOC, the currently required reports conflict with current law, are not narrowly tailored, and could raise constitutional concerns, in that they may promote unlawful race- or sex-based preferences based on disparities.
The biggest impact of the EEOC proposal for private-sector employers with more than 100 employees would be the elimination of the EEO-1 report. Currently, the EEO-1 report requires employers to submit demographic data about their workforce, including job category, race, and sex. Unions, state and local governments, and school systems would also no longer need to submit demographic surveys. Finally, the EEOC’s proposal to eliminate the EEO-2 and EEO-6 reports, which the agency has not required since 1981 and 1983, would have no practical effect on employers or any other entities.
Commentary during the public hearing focused on relatively consistent themes, including the likelihood of other requests for the same information, its value in detecting illegal discrimination and broader patterns of systemic discrimination, its use by employers in making employment decisions, and the ability to use the data to compare employment practices among companies.
Speakers such as employer associations, lawyers, civil rights entities, researchers, and organizations that utilize workforce data all spoke out against ending standardized reporting. They warned that the rescission would not stop the EEOC, state agencies, and private litigants from requesting the same information. Instead, the rescission would cause uncertainty and a lack of uniformity in data retention, organization, and production. They also questioned whether EEOC’s projected cost savings were legitimate in light of other requests for this data.
The Institute of Workplace Equality, which includes large employers and federal contractors, asked the EEOC to modernize the reporting requirements rather than eliminate them. They called the data invaluable for identifying potential discrimination and questioned the claim that the reporting forced quotas on employers. Researchers and economists joined the organization’s plea to update and streamline the reporting requirements rather than decimate them.
Civil rights organizations and other entities advocating on behalf of employees said the data the EEOC collects lets them see individual charges of discrimination in a larger context. The data reveal patterns related to hiring, promotion, pay, and occupational segregation. Without access to this big-picture data, individuals would struggle to discover it on their own.
Testimony on behalf of employers distinguished between using data to make employment decisions and using it to measure the legality of employer operations. No individual identified any instance in which the EEOC reporting requirement resulted in an illegal race- or sex-based decision. When properly used, the speakers contended, the data allowed them to identify patterns meriting review, evaluate risk, and correct practices if needed.
A former EEOC official, along with other former agency leaders, agreed that the data reported to the EEOC allowed employers to compare their workforces across industries. Another firm noted that voluntary disclosure of data was unlikely to be reliable.
In contrast, those speaking in favor of the EEOC’s proposed rescission pointed out the pressures that the requirements create on employers to focus on demographics, and the required classification of employees by race and sex. These organizations also questioned the requirements’ constitutionality, arguing that they lack a compelling government interest. Finally, these speakers noted that removing these requirements would not diminish existing nondiscrimination laws or the EEOC’s ability to request employers’ records in the context of investigations.
Given the uncertainty of the proposed rule, employers may want to monitor potential legal challenges to the rule or interim guidance issued by the EEOC. If the proposed rule eliminates the EEO-1, employers may need to create their own policies concerning data collection, retention, and production. Without standardized EEOC data, employers also need to maintain sufficient data to identify potential legal risks and make lawful employment decisions.
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