For the last 60 years, the Equal Employment Opportunity Commission (EEOC) has required covered employers to submit demographic data for employees. On July 21, 2026, the EEOC issued a proposed rule to rescind this requirement along with related recordkeeping and record preservation requirements. Employers should carefully evaluate the impact of this proposed rule change on their practices and recordkeeping to determine their next steps.
In 1966, the EEOC adopted the annual EEO-1 reporting requirement that applies to private employers with more than 100 employees or federal contractors with at least 50 workers. The EEO-1 report requires these employers to disclose demographic data on their employees by race/ethnicity and sex for various job categories. The reporting expanded over the years, and other reports for joint labor-management committees concerning apprenticeship programs (EEO-2), labor organizations (EEO-3), state and local governments (EEO-4), elementary and secondary school districts (EEO-5), and higher education institutions (EEO-61), were developed. In addition, there are recordkeeping and record preservation requirements.
The EEOC's proposed rule and notice of public hearing issued on July 21, 2026, would rescind and remove the requirements for filing the EEO-1 through EEO-6 reports and the recordkeeping and record preservation requirements related to these reports under 29 CFR part 1602. The EEOC states these reports are "inconsistent with equal employment opportunity law and potentially unconstitutional" and finds the data "is not narrowly tailored, is unnecessary to enforce anti-discrimination laws, and at a minimum, that any marginal benefits are outweighed by the substantial burdens imposed on both employers . . . and the Commission."
Employers should comply with current requirements while monitoring the status of the rule change. In the meantime, employers may question whether they should continue to collect this data if the rule is rescinded. There are several factors employers should consider:
- State and local government requirements: Some states require demographic and compensation data reporting regardless of whether the federal government discontinues EEO-1 reporting requirements. More states may enact laws to adopt state law reporting requirements to the extent the federal requirements are rescinded; it is also possible that if the federal requirements are rescinded there will be legal challenges to the state requirements.
- The potential risk of disparate-impact claims: The Title VII regulations allow claims based on disparate impact, which focus on the aggregate harm of policies even if the policy is facially neutral. It is notable, however, that the Department of Education (DOE) recently announced that it is rescinding disparate-impact provisions from its regulations implementing Title VI of the Civil Rights Act of 1964 (Title VI). The DOE explains that the disparate impact provisions allow demographic data to establish a school violated federal civil rights laws "even if there is no facially discriminatory policy, practice, or discriminatory intent involved." Previously, on December 9, 2025, the Department of Justice (DOJ) similarly announced a final rule updating its Title VI regulations to eliminate disparate-impact liability, claiming the new rule "ensures that recipients of federal funding will be judged on their actual conduct, not on statistical outcomes or circumstances beyond their control." Most recently, on June 9, 2026, the DOJ issued a "Memorandum Opinion for the Chair U.S. Equal Employment Opportunity Commission" explaining why the Title VII regulations should be amended to remove disparate-impact liability. Notwithstanding the DOJ's Memorandum, lawsuits alleging discrimination based on disparate impact continue under applicable federal and state laws, including Title VII. Accordingly, some demographic data is necessary to evaluate and possibly defend against potential disparate-impact discrimination claims.
- The organization's mission and strategies: Continuing to collect this data can provide valuable insight, and it is likely that the EEOC or some other federal agency may request demographic data when investigating claims of discrimination even if EEO-1 reporting and recordkeeping requirements are rescinded. Ultimately, what employers do with the data is key. Employers should ensure that any data they collect is provided voluntarily, that it is properly stored, and that it is not used to make any employment-related decision, including but not limited to hiring, promotion, and firing.
As our team emphasized in a previous publication, it is important to audit your policies and procedures to ensure they do not run afoul of federal anti-discrimination laws. This audit should not be cursory; it should be comprehensive and ongoing. As the legal landscape continues to shift, reviewing all policies, practices, and procedures for legal compliance and legal risk remains vital. Audits should also focus on potential people, reputational, and federal compliance/audit risk. While this article provides some general next steps, employers should consult counsel to discuss their specific circumstances and action items, including potential comments on the final rule.
Employers who wish to comment on the EEOC's proposed rule rescission should note that a public hearing will be held on August 11, 2026, at 10:00 a.m. ET and requests to provide testimony should be submitted no later than August 7, 2026. Written comments may be provided through August 24, 2026. Submissions should include the Regulatory Information Number (RIN) 3046-AB37.
Our Labor & Employment Team is prepared and well-equipped to guide, assist, and represent employers through this process. If you have any questions or would like more information, please contact a member of Baker Donelson's Labor & Employment Team.
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1 The EEOC notes in the notice that it discontinued collecting EEO-6 data in 1993 when the Department of Education began collecting the data.