Dive Brief:
- SHRM submitted a public comment to the U.S. Equal Employment Opportunity Commission on Monday stating that it supports the agency’s attempt to sunset its EEO-1 data collection program, but only if it is replaced with a “modernized framework” that provides guidance to employers.
- Meanwhile, the Interfaith Center on Corporate Responsibility, an institutional investor group, called on EEOC to maintain the program. ICCR said EEO data collection is “vital” to antidiscrimination enforcement and allows employers to identify and monitor legal risks. Investors need the data, too, to make informed decisions, it added.
- EEOC voted last month to issue a proposed rule to end EEO-1 and similar programs; it has maintained that EEO data collection is not statutorily required. In a public comment also submitted Monday, ICCR executives disputed EEOC’s legal justification for ending EEO-1 reporting and argued that data collection is required by Title VII of the 1964 Civil Rights Act.
Dive Insight:
The pair of public comments pushes back against EEOC’s assertion — stated in documentation submitted to the White House Office of Management and Budget — that EEO-1 and related demographic data reporting “imposes a significant financial and administrative burden” on U.S. employers.
Specifically, SHRM noted that while it is supportive of efforts to reduce such burdens and believes that existing EEO reporting “no longer reflects today’s workforce or employer needs,” compliance with other federal and state laws still necessitates collection and retention of EEO data. Moreover, mandatory EEO reporting provides a common set of categories for employers to reference across all compliance obligations, and rescission without the implementation of an effective alternative may lead other jurisdictions to devise differing requirements, reporting periods, definitions and other criteria.
“In that circumstance, rescission could ultimately increase administrative complexity even as it eliminates the federal reporting obligation,” SHRM said.
The HR organization advised EEOC to consult and coordinate with state agencies on those points as it devises a new reporting framework for data collection. SHRM also noted that employers may rely on demographic data to respond to EEOC inquiries, investigate potential disparities and defend against discrimination claims.
ICCR defended EEO reporting from the investor perspective, adding that mandatory collection helps investors fulfill their fiduciary responsibilities.
“Full, fair, accurate, and robust disclosure and risk management brings investment capital to companies,” ICCR executives said. “Investors rely on that disclosure to assess a company’s ability to manage its financial risk and thereby be within the pool of suitable investments. An attempt to diminish disclosure not only puts companies at greater risk, it flies in the face of free market economics.”
Attorneys who previously spoke to HR Dive noted that a future reversal back to a Democratic-majority EEOC could mean the revival of EEO-1 reporting. Should that happen, employers who decide to abandon EEO data collection and retention entirely could be left with outdated processes, sources said. Generally, employers can maintain their EEO-1 reporting structure even if EEOC decides to end mandatory reporting requirements.
EEOC did not immediately respond to a request for comment. In a July statement, Kalpana Kotagal, the agency’s lone Democratic commissioner, said she was concerned that EEOC’s attempt to end EEO reporting would “confuse” employers, given that Title VII’s recordkeeping requirement encompasses workforce demographic data.
