The Equal Employment Opportunity Commission has taken a significant step toward eliminating the federal EEO-1 reporting requirement that many employers have followed for decades. On July 21, 2026, the EEOC voted to issue a proposed rule that would rescind not only EEO-1 reporting, but several other federal demographic reporting requirements as well.
For nearly 60 years, private employers with 100 or more employees and federal contractors with at least 50 employees have generally been required to annually submit EEO-1 reports identifying employees by race, ethnicity, sex, and job category. The EEOC has used this information to monitor workplace trends and support discrimination investigations. According to the agency, however, the reporting requirements create substantial costs for employers while providing limited enforcement value. The EEOC estimates that the current reporting system costs employers nearly $275 million each year.
The proposal reflects the EEOC’s current view that mandatory demographic reporting may conflict with the longstanding principle that employment decisions should be made without regard to race or sex. EEOC Chair Andrea Lucas stated that requiring employers to categorize employees by race and sex every year, even when there is no allegation of discrimination, is difficult to reconcile with Title VII’s goal of equal treatment under the law. The EEOC also expressed concerns that the reporting requirements may raise constitutional issues and collect information that is not necessary for enforcement efforts.
What employers should be doing now
Despite the vote, employers should not assume that EEO-1 reporting is over. The proposal must still go through the federal rulemaking process, including publication for public comment, before any final rule can take effect. Until then, existing reporting requirements remain in place. Employers that would otherwise be required to file should continue monitoring EEOC guidance and remain prepared to comply unless and until the reporting requirements are formally eliminated.
Employers should also remember that state and local reporting obligations are not affected by the EEOC’s proposal. Several states maintain their own workforce demographic and pay data reporting requirements. Even if federal EEO-1 reporting is ultimately rescinded, employers may still have state law compliance obligations and recordkeeping requirements.
For now, the key takeaway is simple: the EEOC has started the process of eliminating EEO-1 reporting, but the requirement is not gone yet. Employers should continue to follow existing obligations while watching closely for further developments. If finalized, the change would represent one of the most significant reductions in federal employment reporting requirements in recent years.
