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On July 21, 2026, the U.S. Equal Employment Opportunity Commission (“EEOC”) voted to issue a Notice of Proposed Rulemaking (“NPRM”) that would eliminate the EEO-1 report and the other annual workforce demographic filings that have been a fixture of federal compliance for decades.

This is a significant development, but it does not mean demographic data has become irrelevant. Below is a summary of what the proposal entails, what it means for your organization, and why you should think carefully before abandoning your current data collection practices.

1. What Is The EEOC Proposing?

The proposed rule would rescind the regulations that require covered employers to file EEO-1 through EEO-6 reports, along with the associated recordkeeping requirements. The best-known of these, the EEO-1 Component 1 Report, requires covered private employers to report workforce data by race, ethnicity, sex, job category, and location. Generally, private employers with 100 or more employees are covered, as are certain federal contractors with at least 50 employees.

2. Why Is The EEOC Making This Move?

The Commission concluded that the EEO reports are inconsistent with equal employment opportunity law, may raise constitutional concerns, and collect data that is not narrowly tailored to enforcing anti-discrimination statutes. In its view, whatever limited value the reports provide is outweighed by the burden of producing them, estimated at nearly $275 million annually for employers and roughly $4 million annually for the EEOC to administer.

EEOC Chair Andrea Lucas stated that the proposal “reaffirms the founding principle that every individual is created equal and therefore is entitled to equal treatment under the law,” emphasizing that requiring employers to categorize employees by race and sex annually “stands in direct tension with Title VII’s requirement that employment practices be colorblind.”

3. What This Does Not Change

The proposed rescission would eliminate a federal reporting obligation, not the underlying anti-discrimination laws. Specifically:

• Federal, state, and local anti-discrimination laws remain fully in effect.

• The EEOC retains its authority to request specific, tailored records relevant to individual charge investigations.

• Legal prohibitions against discrimination in hiring, compensation, promotion, and termination are unchanged.

• State and local reporting, recordkeeping, and pay equity obligations may still apply.

4. Should Employers Stop Collecting Demographic Data?

In most cases, no. Even without a federal reporting mandate, workforce demographic data remains a valuable compliance and risk-management tool:

• Compliance and Risk Assessment. Regular demographic reviews help identify potential disparities in hiring, compensation, promotion, and termination before they become claims.

• Pay Equity Analysis. Demographic information remains essential for meaningful pay equity analyses, regardless of whether a federal reporting requirement exists.

• Defending Employment Decisions. Historical workforce data can help employers evaluate and defend discrimination allegations by demonstrating legitimate, nondiscriminatory business reasons for employment decisions.

• State and Local Requirements. Multi-state employers should evaluate whether state or local laws impose separate reporting, recordkeeping, or pay equity obligations requiring ongoing data collection.

5. Best Practices For Employers Who Continue Collecting Data

Organizations that continue collecting workforce demographic data should do so with clear compliance purpose in mind:

• Limit access to the data to those with a legitimate need.

• Maintain demographic information separately from personnel records where possible.

• Establish clear retention policies for demographic data.

• Consider conducting certain demographic analyses at the direction of counsel to preserve privilege.

• Implement strong safeguards to protect confidential information.

• Ensure that internal analyses lead to appropriate follow-up, investigation, or corrective action where necessary.

6. Action Items For Employers

The NPRM was published on July 23, 2026, with a 30-day comment period that closed on August 24, 2026. A public hearing on August 11, 2026, drew nearly 1,500 written comments, with most speakers urging the Commission to retain or modernize the framework. The EEOC has not yet issued a final rule. Until a final rule takes effect, current obligations remain in force, and employers should prepare as if the 2026 filing will proceed.

In the meantime, employers should:

• Continue complying with current EEO-1 requirements until or if the legal requirements actually change.

• Audit current practices to determine what demographic information your organization collects, and why.

• Identify applicable state and local requirements that may mandate continued collection or reporting.

• Evaluate your use of demographic data for pay equity, promotion, hiring, or other compliance analyses.

• Review data access, confidentiality, and retention practices to ensure they are current and appropriate.

• Consult employment counsel before eliminating any existing collection or retention practices.

7. The Bottom Line

The EEOC’s proposal marks a potentially significant shift in federal reporting policy, but it leaves anti-discrimination laws fully intact. Workforce demographic data remains a key tool for compliance, risk management, and litigation defense. Employers who maintain thoughtful, proactive data collection and analysis practices now will be best positioned, whether the EEO-1 survives, evolves, or disappears entirely.

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About The Author

Carina Novell is an attorney in Sheppard’s Labor and Employment Practice Group in the firm’s San Diego (Downtown) office. Ms. Novell helps companies navigate complex California employment laws and defends both single-plaintiff and complex class action lawsuits. Carina focuses her practice on labor and employment law matters, as well as advising and representing management clients. Carina handles various types of employment litigation, including wage and hour class actions, discrimination, wrongful termination, retaliation, and harassment lawsuits.

Carina is a contributor to the California Labor and Employment ALERT.

Ms. Novell received her law degree from the University of California, Davis and her undergraduate degrees from Saint Mary's College of California, summa cum laude.