With comments now submitted, the Equal Employment Opportunity Commission (EEOC) has cleared the last procedural hurdle to promulgating a final rule eliminating the requirement that employers disclose demographic data through EEO-1 reports. For more than sixty years, private employers with more than 100 employees and federal contractors with more than 50 employees have been required to collect and report certain demographic information on their employees to the EEOC.
In May 2026, the EEOC commenced the process of eliminating this long-standing rule by submitting its proposed rule to the Office of Regulatory Affairs. The EEOC voted to move forward with its effort to rescind the rule on July 21, 2026. The votes on the preliminary rule were split along party lines, with Chair Lucas and Commissioner Panucci sternly favoring the rule and Commissioner Kotagal strongly opposing it.
One critical point discussed during the hearing was whether or not the proposed rule impacted employers’ obligations to collect demographic data. The text itself is silent on collection and only refers to eliminating the reporting of demographic data. Commissioner Kotagal posited that the rule will not eliminate the requirement to collect data and pointed to employers’ potential obligations to provide demographic data for disparate impact analyses, validation studies, EEOC investigations, and employer self-assessments.
After that, the proposed rule was published in its entirety and advanced to a public hearing. Te stated basis for the rule change was that the EEOC had made a “preliminary determination” that the reports are “inconsistent with equal employment opportunity law and potentially unconstitutional” and that the cost to employers outweighed any marginal benefit provided by the reporting. At the two-hour public hearing, the majority of commentators opposed the rule, with 16 of 22 speakers voicing some level of opposition to the rule. Notably, employer groups that spoke were split on whether or not the elimination of the EEO-1 report would actually reduce operational costs for employers. Some tracked the EEOC’s position that demographic reporting costs employers $275,000 a year. While others pointed out that removing a uniform federal standard for reporting will make the handling of demographic information more complicated and force multi-state employers to comply with different standards in different states.
The hearing’s conclusion marked the opening of the 30-day window for public comment, which ended on Monday, August 24, 2026. Notably, the EEOC was originally considering a 60-day comment period but shortened it to 30 days.
Comments on the EEOC’s Proposed Rule
Despite the shortened window, the proposed rule to eliminate EEO-1 reporting drew approximately 3,000 comments. The breakdown of these comments largely mirrored that of the speakers during the public hearing. Lawmakers and advocacy groups largely split along party lines. Employer groups remained divided on whether or not the reporting of demographic data is a helpful tool to shield employers from litigation or potentially harmful decisions, or whether the reporting of this data is an unnecessary business expense that burdens smaller businesses and corporations. Similar concerns were also raised regarding the proposed rule’s silence on data collection as opposed to reporting, and what impact this rule would have on employers in light of potentially divergent state laws. The fact that attorneys general from 42 states submitted comments with half supporting the rule change and half opposing it highlights the landscape that employers are likely to face should the EEOC move forward with a final rule.
Takeaways For Employers
The uncertain future of EEO-1 reporting begs the questions of what happens next and what employers should do in the face of the impending EEOC decision. Regarding the rulemaking process, the EEOC must now address the public comments that it received; however, it is not necessarily required to re-open public comment before publishing a final rule. With EEOC’s positions to date, the goals of the current administration, and the partisan interests at play, it is reasonable to expect that the EEOC will move forward with a version of the proposed rule and eliminate EEO-1 reporting. That said, the rule change could still face challenges to the constitutionality of the new rule or the rulemaking process.
The first thing for employers to understand right now is that EEO-1 reporting is still required under the law and EEOC Rules. This may not be true for an employer reading this article in six months, but EEO-1 reporting remains the law of the land. Most immediately, employers should operate as though they will have to submit their 2025 demographic information. To date, the EEOC has not opened the portal or announced a submission window for 2025 EEO-1 reports.
Even if EEO-1 reporting ends, employers should not delete existing demographic data, and should carefully consider their business operations, other federal regulations, and state or local laws before determining that it can safely stop collecting demographic data. Illinois, Massachusetts, and California already require certain employers to collect and report demographic data. Further, effective January 1, 2027, Colorado will be implementing similar requirements. On the local level, New York City requires employers with at least 200 employees to track and report demographic data. The changes to EEO-1 reporting will not eliminate any employers’ obligations under state and local laws. Furthermore, this data still may be useful or required to comply with disparate impact analyses, validation studies, EEOC investigations, and employer self-assessments. Employees are still likely to file disparate impact lawsuits. When an employer properly maintains its demographic data and makes responsible employment decisions, demographic data can serve as a shield for employers rather than a sword for litigants. This is borne out in the comments from investment groups who positively regard transparency from companies that track and publish their demographic data.
Human Resources and in-house legal teams should continue to monitor for the announcement of a final rule, review any final rule for substantive changes from the proposed rule, and separately monitor for an announcement regarding the submission window for 2025 EEO-1 reports. Moreover, at the hearing, Chair Lucas signaled that the EEOC is already considering future rulemaking efforts that could further impact the collection and reporting of demographic data. Those rules could affect disparate impact analyses, validation studies, and EEOC investigations. While the final rule on EEO-1 reporting will provide some clarity to employers, decision-makers should be cautious that additional rules by the EEOC and new state-level laws will continue to shape the landscape for employment decisions and the handling of demographic data.
Benjamin Nellans is a shareholder at Segal McCambridge with more than 10 years of employment litigation and counseling experience. He can be reached at bnellans@SMSM.com.