EEO Data in Flux: Navigating the EEOC's Proposal to Rescind EEO-1 Reporting

For almost 60 years, the EEO-1 Report has been a fixture for employers—love it or hate it, everyone knows the drill. Now the EEOC wants to get rid of it, and nobody's quite sure what comes next.

In this episode, Alicia Wallace talks with Nita Beecher of Fortney Scott about what's actually going on: why the EEOC is targeting EEO-1 reporting and the rules behind it, what EEOC leadership has said about how employers can still use this data, and why dropping federal reporting doesn't mean the legal risk goes away. They also get into the uncertain position employers might find themselves in—no requirement to collect the data, but still very much exposed to discrimination claims if they don't.

It's a candid conversation for anyone who handles this work and is trying to figure out what to do next, not just what the headlines say.

This podcast is for general discussion purposes only and should not be considered as legal advice.

Transcript

DirectEmployers Association (00:00):

Get ready. The DE Talk Podcast starts now. Insightful conversations and dialogue helping you put the human factor back in HR.

Alicia Wallace (00:06):

Welcome to DE Talk Podcast, and I'm so glad you're joining us. I'm your host, Alicia Wallace, DirectEmployer's HR consultant and longtime DE supporter. Before stepping into this role, I spent more than 26 years managing EEO compliance for Fortune 100 and 500 organizations, plus another 10 years working with the Department of Defense and Department of Labor. So I've had the chance to see this work from both sides of the table as employer and as a regulator. And today I'm so excited to dive into a topic that's been keeping HR compliance professionals up at night. The future of EEO demographics, data collection, and what's happening with the EEO report as we know it. If you've been following the news of the Employment Opportunity Commission, the EEOC lately, you know the ground is shifting fast from proposals to rescind the EEO one report requirements, to debates over disparate impact theory, to questions about what employers should be doing with race, ethnicity, and sex data going forward.

(01:09):

It's a lot of change in a short window of time, and practitioners in the field are understandably on edge trying to figure out what compliance looks like next. To help us make sense of it all, I couldn't think of a better host. Joining me today is Nita Beecher of counsel with Courtney Scott. Nita has spent her career working at the intersection of employment law and workplace compliance, and she brings a deep practical understanding, believe me, of how EEO regulations actually play out for employers navigating this uncertainty. Not just the legal theory, but the real operational questions. How do you collect the data? Who should have access to it? What happens if your state had its own reporting requirements? And what does good practice even look like with the federal framework influx? Nita, thank you so much for being here to have a chat about data, demographics, and EEO compliance.

(02:00):

I know our conversation today is going to be incredibly valuable for anyone managing this work on a day-to-day basis.

Nita Beecher (02:06):

Thank you, Alicia. I'm very excited to be here.

Alicia Wallace (02:09):

So Nita, as a longtime manager of EEO demographic data, I have questions and I'm sure my colleagues in the field who manage the work on a day-to-day basis have similar concerns. I'm excited you have agreed to sit down with me, not to provide legal advice, but to have a chat about data. As we know, the collection of disability and veteran data is ongoing. I'm glad to hear that. But with the pending proposal from the EEOC to rescind the requirements to submit EEO data, it is a topic which creates a lot of unknowns and puts practitioners on a bit of pins and needles. It's not that we love the annual submission of EEO-1 data, but it was a standard report we have been familiar with for many, many years. And the burden of collecting the data was somewhat diminished over the years. So what are your thoughts?

Nita Beecher (02:52):

Well, first of all, Alicia, thank you so much for inviting me. I was thinking about how long you and I have been working together as practitioner and in employment groups and so forth, and how quickly things have changed under this current administration. You're right, the EEO-1 has been in place for many years. It was actually one of the first things EEOC did when it was created, and it started in 1966, and very little has really changed since it was first proposed. It is based on section 709(c) of Title VII. And I mention that because it's important as we talk about this new rescission proposal from the EEOC. 709(c) says that employers must make and keep such records relevant to the determinations of whether unlawful employment practices have been or are being committed. As we know right now, employers with a hundred or more employees and federal contractors with 50 or more employees are required annually to submit the data on race, sex, and ethnicity of their employees by the nine EEO-1 job categories.

(04:01):

The race and ethnicity categories originated on a standard Form 40, which was established by the President's Committee on Equal Employment Opportunity. So we're talking 1965. The current categories, as we all know, are Hispanic or Latino, white, Black or African-American, Native Hawaiian or other Pacific Islander, Asian, American Indian, or Alaska Native, and two or more races. And Alicia, one thing to keep in mind as we talk about these categories, which we will in a few minutes, the Biden administration had proposed to add Middle Eastern or North African M-E-N-A MENA. In addition, one of the interesting things they are proposing, because there's been a lot of controversy over having to pick only one ethnicity or race, is they're going to allow people to pick multiple categories, all the ones that fit. That'll be very interesting. However, unsurprisingly, OMB has postponed these changes until September of 2029.

Alicia Wallace (05:08):

With that said, so why do you think the ELC wants to eliminate the EO1 report and record keeping regulations that support it?

Nita Beecher (05:15):

Well, if you go back to our favorite project 2025, that's practically the first thing on page one of the labor group, which is chapter 18. So it has been part of the proposal. It has been on the list of things that groups would like to get rid of. The argument used by Project 2025 and the other supporting document, which is the Department of Justice Office of Legal Counsel, they call it a slip opinion, argues that the reason to do this is that classifying individuals based on race violates Title VII and may violate the Constitution because listen to this, it may encourage employers to discriminate against individuals who are not minorities. It may promote racial stereotype, and it may encourage employers to engage in discrimination to avoid potential EEOC enforcement actions or to address perceived inequitable outcomes. Another argument which the EEOC makes is the burden argument that it costs employers and EEOC millions of dollars to collect and submit this data, which EEOC says they don't use.

Alicia Wallace (06:27):

I saw the EEOC Commissioner Kotagal push back on these arguments in a recent EEOC public hearing.

Nita Beecher (06:34):

Not only did Commissioner Kotagal push back in the hearing, she actually has posted a statement outlining why she disagrees with this position. She said that as recently as this year, EEOC has used EEO-1 data as part of investigations and cites specifically Central Transit, which refused to hire qualified female drivers. And that particular company settled with EEOC for $5.5 million. And Kotogol believes that eliminating the EEO-1 report deprives the agency of critical data and argues that even without EEO-1 and record keeping regulations, the Section 709(c), which we just discussed, requires employers to make and keep demographic data. She also points out to expect employers that a Democratic administration is going to reinstate not only potentially the EEO-1, but remember there has been a big move to try to collect pay data as well.

Alicia Wallace (07:36):

This recording is very appropriate because we are recording this just a few days after the EEOC held a public hearing on this proposal to eliminate the EO1 and the EEO reports. Why does the EEOC have a public hearing on things like this?

Nita Beecher (07:48):

Well, it's very interesting because EEOC had actually a vote on the proposal to rescind, which was then published in the Federal Register. Title VII actually specifically requires EEOC to hold a public hearing when it makes any changes to its record keeping and EEO-1 requirements. In fact, Alicia, you may not remember this, but many years ago in 2003, EEOC held a public hearing that led to the changes that they made in 2007. I actually testified at that hearing. And interestingly, my boss, David Fortney of Fortney Scott and the Institute for Workplace Equality testified this past Tuesday at the public hearing on behalf of the Institute.

Alicia Wallace (08:36):

Nita, 2003, I was leaving the federal government and moving over to the corporate side, so I absolutely remember that. So kudos to David. I hear he was the first speaker. Tell us about the hearing.

Nita Beecher (08:46):

What was really interesting, I have to give a little background on this before we get to the actual hearing itself. So Sunday morning, I walk to my computer and I get a note saying, "We've been told we can testify on Tuesday." We're saying Sunday morning, something has to be filed with the EEOC on Monday morning before 12 o'clock. And then the hearing was at 10 o'clock on Tuesday. And I can tell you, David Fortney has testified many times because he was the acting solicitor of labor under the George H. W. Bush administration. And so he testifies all the time. In fact, he testified on the pay data reporting requirement when they put that in during the Obama administration. But anyway, trying to pull together testimony, even though it was only five minutes a piece in two days over the weekend is crazy. Anyway, so Alicia, you actually asked me a different question, which is there were 22 speakers.

(09:45):

According to EEOC, every single person who asked to speak was given a spot. So the meeting was about two hours and 15 minutes. The interesting thing, and Alicia, I don't know if you remember, my only other experience was in 2003, and then when David testified in 2016. Anyway, in those hearings, the commissioners would ask questions, which makes them go a lot longer. In this particular hearing, the commissioners are not allowed to ask any questions. So it was just the five minutes of each individual speaker and no real reaction from the commissioners, which I thought was very interesting. So they had 15 speakers of the 22 were against the rescission for lots of different reasons, and they were really, some of them were excellent. They had six speakers who supported EEOC's proposal, most of them arguing that collecting race and sex data, especially race data, may violate the Constitution.

(10:44):

Those opposing, and I think this is the big issue. If EEOC is not collecting this data, how are they going to enforce Title VII? And we, as the Institute, David, argued that there's some opportunities in this to make some changes that would make it updated for the modern workplace. We don't believe that it should be eliminated. The big question that all of this, we had one speaker who didn't have an opinion on keeping the EEO-1 for the reason, Alicia, you're saying. I mean, none of us are crazy about it, just is. But their question is without the EEO-1, and of course UGES, which is also going to be eliminated, what are the employer's obligations to collect and analyze the data? And will employers have a right to do that in order to determine whether they have legal impediments that they don't know about?

Alicia Wallace (11:39):

Real quick, couple of follow-up questions. UGES, I'm not sure, maybe for future listeners as they all know what UGES stands for.

Nita Beecher (11:46):

Uniform Guidelines for Employee Selection Procedures. It goes back to 1978, and in fact, it is a safe harbor for employers so that one, it requires employers to collect data on all their employment decisions. That means applicants as well as employees, and to analyze those to determine whether there are any adverse impact based on these positions. If there's adverse impact, then you have an opportunity to validate it like tests and those types of things. Or you can show that it's job related and it's much longer than that, but it is a safe harbor for employers. We haven't had that hearing yet, but we know it's coming because the slip opinion from the Justice Department's Office of Legal Counsel has told the EEOC that it violates the Constitution. So we're expecting that to be eliminated.

Alicia Wallace (12:38):

For 20 years, I think I kept that uniform guidelines in my back pocket or in my purse. It came up so often. The second part to my question, the follow-up was the public hearing, the EEOC public hearing, are they recorded so people who haven't heard it can go back and listen to all that was said?

Nita Beecher (12:54):

Absolutely. You go into the EEOC's website, you go up and it says meetings. The very first dropdown, it'll say meeting of the commissioners, and you can go in there and find it. It's a YouTube video. You can't see what's going on, but you can hear it. They said they're going to have a transcript as well so that you could hear what all 22 visuals said.

Alicia Wallace (13:15):

Okay, so back to the EEO-1 and its regulations. Once they're eliminated, what about collecting the data and using it for monitoring purposes? Over the years, the EEO-1 data has been collected, maintained, and used as a sort of summary across organizations. Mostly the consolidated report provided a summary look at an organization by race, ethnicity, and sex broken out by job categories, i.e. Management levels or et cetera. Of course, the OFCCP and the EEOC were the main external agencies which reviewed the data as well as many states. What do you think about that?

Nita Beecher (13:47):

Well, I think you're raising really good issues, and I think all of the speakers that oppose the rescission have raised that as an issue. Here's what we know. We know that the current regulations require the employers to report the race, ethnicity, and sex of their employees. As we said, the actual requirement to collect the data comes from UGES, the uniform guideline. As we said, they're going to eliminate that. What we know, and we do not know that EEOC is going to give us any additional guidance, in various public statements by the chair, Andrea Lucas, she has said that employers can collect and analyze the data, but they can't widely share it. She believes that if you are publishing it or sharing it with hiring managers, that there's a presumption they're using race or sex to make decisions.

Alicia Wallace (14:39):

For a long time, I've always consulted that the sharing of EEO-1 data should be limited to those with the need to know. My concern is that the employees may now refuse to provide data. And then the response can't be, as I used before, is, oh, I need it for government reporting purposes. My question is, were minorities, maybe they won't provide the data for fear that an organization is not supporting diversity, or maybe whites will choose not to provide the data because it's not required. And it's assumed that the government with the term illegal DEI, they may not want to provide the data at all. I'm anticipating a bit of chaos around the data collection itself.

Nita Beecher (15:14):

I think that we've been dealing in this field for many years. Recently, we are having a lot of trouble with younger employees refusing to self-ID, and then we have to do visuals. We had a client whose HR person would not do a visual ID. She said it was wrong. We can't do that. It's like it's in this. So now that's going to be gone because our obligation was to provide the race, ethnicity, and sex of all employees, hopefully by self-ID mostly. And then if not by self-ID, then visual, which may or may not be correct. You're right, we're not going to have that anymore unless we have a situation where you're in a state where it's required. And at that point, you will have to collect it at least under whatever state law there is. One of the arguments that was made in this hearing by several of those who agree with the rescission is that somehow mandatory race collection of employees violates the Constitution, that it's institutionalized arbitrary race sorting.

Alicia Wallace (16:21):

Yeah, I was one of those that did the visuals usually through badges in multiple ways, but it's interesting because it was different for different companies, but the government, once you got to a certain percentage of unknowns, you had to show proof that you didn't have anything that was a barrier to people providing the ethnicity data. So some of us really made attempt to try to get it, and we only used it for those purposes. So back to the hearing, what about collecting and analyzing the employee data that you do collect?

Nita Beecher (16:48):

There was very little, well, clearly we got nothing back from the EEOC, but most of those who opposed eliminating the requirement were saying, so we use the data in various ways. Can we still use it? Can especially employers still use it? And I thought one of the speakers didn't really care whether they eliminated the EEO-1 requirements, wanted EEOC clearly to specify that employers could collect this data. But I think you're right, Alicia, without the legal requirement, it's going to make it harder to convince employees to provide you the data that you need to determine whether or not you may have adverse impact.

Alicia Wallace (17:26):

My concern would be around the employers who don't have state obligations to collect the data. There's going to be concerns around that.

Nita Beecher (17:33):

Well, that was raised. And I think even though this administration is doing everything it can to eliminate the use of disparate impact, it's still in Title VII. And as they had someone from the plaintiff's bar speak about how plaintiff's counsel will be using this data. And it's interesting because there are ways to collect it when you have to, but it's very complicated. And I can tell you that plaintiff's counsels and others who are attempting to prevent discrimination from their perspective, they will be collecting data and they will be using it. And so if the employer doesn't have it and they haven't been analyzing the data, they're going to have a big problem trying to explain their decision-making.

Alicia Wallace (18:18):

So there were organizations that chose to include the EEO data in their ESG reports, their social responsibility reports, and board members and top executives and certain industries that include the EEO data publicly on a website. It'll be interesting to know where they are today with releasing demographic data on those reports. I was never really comfortable with releasing EEO data on corporate websites only because of the assumptions that could be made. I think they were better served being reviewed internally, just for the reason you just explained, to monitor and make sure you're not discriminating and that there are no barriers. So those industries that really were pushing transparency for the release of the EEO-1 reports today, I wonder where they're sitting and what their thoughts are about that today and what you've heard.

Nita Beecher (19:01):

Well, I've seen that many companies have stopped putting their EEO-1s up on the websites. There was a big push by shareholder groups, and one of those groups actually testified at the hearing that they use EEO-1 data to provide information to shareholders so they know what the company's position on human capital is. But we also know that Chair Lucas, in numerous speeches, has taken the position that if employers publish their EEO data, that EEOC is going to assume they're using the data to make employment decisions. So I think a lot of employers have backed off that.

Alicia Wallace (19:36):

Me being a long-time advocate of equal employment opportunity, I kind of think the opposite. I think organizations that were comfortable releasing their data were considered transparent and instead used the release to monitor and ensure their employment practices were non-discriminatory.

Nita Beecher (19:50):

Well, I think that's what employers were trying to do. I mean, many large companies were producing them for five or six years, but what we are hearing is they're not publishing. And in fact, they're even cutting back on their ESG reports, which is also very disfavored under this particular administration.

Alicia Wallace (20:07):

We have several states that have EEO certifications or reporting obligations that require demographic data. I'm wondering with work with those states, they used to accept the EEO-1 report, it would suffice. So you wouldn't have to do all the additional work because if you had a report that covered that area, you could use that. So that won't any longer be the case. You won't have an EEO specified report for a state or a location that you could provide to those states.

Nita Beecher (20:31):

That's exactly right. We know California and Illinois have various reports. There are other states. I know Massachusetts wants you to send in your EEO-1 report among others. How that's all going to roll out is going to be very interesting. And I think if other states are like Colorado, Colorado put in a law, I want to say in May perhaps, that starting next year, you're going to be submitting under. If you would've had to file an EEO-1 this year, you are going to have to give Colorado that same information starting next year. So I expect to see that from other states just as we did when the pay data requirement went away on the federal level. We have a number of states that added pay data requirements. So I think we're going to see, as we call it, the patchwork.

Alicia Wallace (21:20):

No, this is a question or a statement. I think it's a little bit of both, but shouldn't a good EEO and non-discrimination program be grounded in a review of equity, fairness, and inclusion using data, not opinions or speculations, which in turn informs and empowers organizations to make informed, legally sound, and truly impactful decisions that foster inclusion for all? Nita, thanks for allowing me to spend time with you to discuss EEO data collection. Thanks to DirectEmployers for providing a platform for this discussion. Provide us some parting thoughts you may have for both practitioners and leaders who are managing this work right now.

Nita Beecher (21:55):

Thank you for giving me some time to talk about this. What I think is a very important subject of great controversy among practitioners, believe it or not, as well. So we believe, I think I can speak for the firm in this context, that employers should be continuing to collect that data, not only for employees, but also for applicants, race, ethnicity, and sex, and you want them to analyze it under privilege. I think the big change here, much of when you collect it for EEO-1, you're not doing it under privilege, but here you're going to collect it and not the data's not privileged, but the analysis would be, and determine where there are barriers. And if there are barriers, then you need to do something. You need to investigate where those problems are and document them. Otherwise, you could end up in a worse place than if you never looked at the data at all.

Alicia Wallace (22:46):

As always, you provide really good content, and the conversation has been really interesting. I've loved every minute of it. Finally, if people want to get in touch with you, what's the best way to connect?

Nita Beecher (22:56):

I think the best way is to email me at NBeecher, B-E-E-C-H-E-R, @fortneyscott.com. That's F-O-R-T-N-E-Y-S-C-O-T-T.com.

Alicia Wallace (23:09):

It's been a pleasure, Nita. Thank you so much.

Nita Beecher (23:11):

Thank you, Alicia.

DirectEmployers Association (23:13):

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