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.
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The change is a move in the right direction. It addresses the unseemliness, potential constitutional problems, and implied DEI pressure inherent in the government’s demand for these data. The key caveats are that employers may continue to collect the underlying information, that the numbers may occasionally be missed in legitimate lawsuits and investigations—including challenges to DEI practices—and that a future administration can undo the change.
In its Notice of Proposed Rulemaking, the EEOC highlights several key justifications for ditching the reporting requirements. These requirements, perhaps surprisingly, are not spelled out in the law and lie within the agency’s discretion.
One is that, to comply with the Constitution, the government’s use of racial classifications must be narrowly tailored. Wholesale, indiscriminate collection of workers’ racial demographics via EEOC forms arguably crosses the line.
These forms also risk encouraging employers to discriminate by race to make their numbers look more representative and avoid attracting regulators’ attention. Further, collecting the forms costs the EEOC a few million dollars every year, to say nothing of the burdens the process imposes on employers.
The new rule’s effect, however, will depend on some other factors—and, over the long term, on whether a future EEOC (likely the next one that Democrats control) simply brings the requirement back.
As Bloomberg Law noted earlier this month, changes to other EEOC policies, and perhaps 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 to the government. Either way, some firms may decide that the numbers’ usefulness (including in responding to discrimination allegations) outweigh the risks of compiling them. Also in play here are state-level data-disclosure requirements, including California’s.
Another tradeoff worth mulling: If these data are no longer reported or perhaps even collected, might they be missed in legitimate discrimination investigations, including those challenging DEI practices? After all, when it comes to higher-ed admissions, the Trump administration has sought to increase the amount of demographic data colleges provide, in order to expose ongoing use of racial preferences. If such data aren’t reported on a routine basis, they’ll have to be obtained through subpoenas and requests for information; and if they’re not collected, they won’t exist at all.
Like aggregate admissions numbers, overall workforce statistics seldom prove bias on their own—but they can, for example, answer the question of whether a company’s demographics changed after it announced 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 respond to DEI pressures—though the most famous example, Bloomberg’s 2023 claim that of 300,000 jobs recently added at S&P100 companies, “94% went to people of color,” was not particularly rigorous.
On balance, the tendency of the EEOC forms to encourage demographic bean-counting and DEI likely outweighs any usefulness they offer. Getting rid of them is for the best, even if the data come in handy sometimes—and even if, without action from Congress to change the actual law, the change will probably prove temporary.