Why Employers Should Keep Collecting Demographic Data Amid the EEOC’s Proposed Regulatory Changes

The U.S. Equal Employment Opportunity Commission (EEOC) has identified 10 pending regulatory initiatives in its agenda. This post focuses on three that raise questions for employers about ongoing demographic data collection and recordkeeping.

1. Rescission of USGESP (RIN 3046-AB43): Rescission of the EEOC’s interpretive portions of the Uniform Guidelines on Employee Selection Procedures (UGESP) and the related appendix in 29 C.F.R. Part 1607. These provisions have long provided a framework for evaluating whether employment tests and other selection procedures produce adverse impact and, when necessary, whether those procedures are properly validated.
   
2. Rescission of UGESP Recordkeeping (RIN 3046-AB45): Proposed rescission of the UGESP recordkeeping requirements, which generally require employers to retain demographic and selection data sufficient to evaluate adverse impact by race, sex, and ethnic group and to preserve supporting validation records when applicable.

3. Rescission of EEO Reporting (RIN 3046-AB37): Proposed rescission of the EEO-1 and several other EEO reporting requirements, which currently require covered entities to submit workforce demographic data used by the EEOC to support enforcement, identify discriminatory employment patterns, and monitor equal employment opportunity compliance.

These initiatives reflect the broader enforcement direction signaled by the U.S. Department of Justice’s recent opinion addressing disparate-impact liability under Title VII and the EEOC’s National Enforcement Plan for Fiscal Years 2025 through 2029. Together, these developments signal a greater emphasis on intentional discrimination and on making employment decisions based on each applicant’s or employee’s individual qualifications, experience, performance, and circumstances, rather than on protected characteristics or assumptions about demographic groups. For a more detailed discussion of the EEOC’s current enforcement priorities read our prior post.

Why Should Employers Continue Tracking Demographic Data?

Even if these initiatives reduce certain federal reporting and recordkeeping obligations, employers should not view them as a reason to stop collecting or reviewing workforce demographic data. Regulatory priorities may change, and discontinuing collection could create historical gaps that make future reporting, trend analysis, and compliance reviews more difficult. Beyond EEO reporting, this information can help employers evaluate employment practices, identify potential disparities, support legal and compliance reviews, and meet state or local requirements. Several practical considerations support continued data collection:

• Evaluating Selection Procedures and Employment Outcomes. Demographic data can help employers determine whether tests and other practices used in hiring, promotion, compensation, discipline, termination, and reductions in force produce significantly different outcomes among protected groups. A statistical difference does not, by itself, establish unlawful discrimination. It may, however, identify a practice that warrants further review for job relatedness, consistent administration, or other legitimate business considerations.

• Tracking Workforce Trends Over Time. Consistent demographic data allows employers to compare employment outcomes across reporting periods and determine whether changes to recruiting, selection, compensation, or workforce-reduction practices have improved or created potential disparities.

• Monitoring Automated Tools and Vendors. Employers increasingly rely on artificial intelligence tools and other automated systems to screen applicants or inform employment decisions. Demographic data can help employers evaluate whether these tools produce adverse impact, verify vendor representations, and conduct bias audits. Employers should not assume that using a third-party product eliminates their responsibility to assess its employment-related outcomes.

• Supporting Investigations and Legal Defenses. Reliable workforce data can help employers respond to an EEOC charge, state agency inquiry, demand letter, audit, or lawsuit. It may demonstrate that a practice was applied consistently or provide context showing that an alleged disparity is not supported by the complete workforce data. Deleting historical information may make it more difficult to investigate complaints, reconstruct past decisions, or comply with litigation-hold and document-preservation obligations.

• Conduct Pay Equity and Compliance Reviews. Employers frequently use demographic and compensation data to examine pay, promotion, hiring, performance rating, and reduction-in-force decisions. These reviews may identify legitimate explanations for differences, such as experience, tenure, geography, job duties, performance, education, or shift differentials.

• Meet State and Local Requirements. Changes to federal requirements would not eliminate independent state or local obligations. For example, California requires covered employers to report pay, demographic, and other workforce information, while Colorado has announced a new state-mandated EEO-1 report will launch in 2027. Multistate employers should review the requirements in each jurisdiction where employees work before revising their data collection or retention practices.

• Preserving Historical Data. Regulatory and enforcement priorities may shift, particularly under future administrations. Discontinuing demographic data collection could create gaps that are difficult or impossible to reconstruct if reporting requirements are reinstated or expanded. Those gaps may also hinder trend analysis, agency responses, and future compliance reviews. Employers should balance data continuity with applicable privacy and retention requirements.

Recommended Next Steps for Employers

• Monitor the Rulemaking Process. Continue complying with existing reporting and recordkeeping requirements until applicable final rules take effect, including collection of voluntary self-identification forms for race, gender, and ethnicity to all employees at time of hire.

• Inventory Reporting Obligations. Identify federal, state, and local requirements involving demographic, selection, and pay data.

• Preserve Appropriate Workforce Data. Avoid automatically deleting historical demographic or selection records without reviewing applicable retention requirements, litigation holds, and compliance needs.

• Establish Data Safeguards. Define the purpose for collecting demographic information, limit access to personnel with a legitimate business need, and keep the data separate from records used by employment decision-makers. Use appropriate notices and maintain disability, medical, and genetic information in accordance with applicable confidentiality requirements.

• Review Selection Procedures. Document the business purpose and job-related rationale for employment tests, artificial intelligence tools, background screening standards, educational requirements, physical requirements, and other screening criteria.

• Coordinate With Legal Counsel. Obtain legal guidance before changing retention practices or conducting statistical analyses that may identify potential compliance concerns.

How HR Works Can Help

Changes to federal EEO reporting and enforcement priorities may reduce certain administrative requirements, but they do not eliminate an employer’s obligation to maintain non-discriminatory employment practices.

HR Works can assist employers with reviewing EEO policies, demographic data practices, selection procedures, pay equity processes, and state-specific reporting obligations. Current clients may contact their designated HR Consultant for additional information.

Not an HR Works client? Contact HR Works by visiting our website and completing a “Contact Us” form or by calling toll-free at 1-877-219-9062.