The Equal Employment Opportunity Commission is considering requiring companies to report their number of nonbinary workers as part of the annual EEO-1 data collection, potentially further increasing workforce disclosures for large companies who are simultaneously facing pressure from federal and state regulators as well as institutional investors to publicly disclose EEO-1 reports.
Currently, the EEOC requires employers to disclose demographic workforce data broken down by race/ethnicity, sex, and job categories as part of annual EEO-1 report submissions. The EEOC does not currently collect data on nonbinary workers, although employers can voluntarily include such data as part of their annual EEO-1 reports.
The addition of nonbinary worker data to the EEO-1 report would require a full Commission vote at the EEOC. The Commission has a Republican majority through July 1, 2022, meaning if any such changes to data collection are to occur, the Commission is unlikely to hold a vote until late summer or early fall at the very earliest.
Large companies are facing increasing pressure to disclose more workforce data from several fronts. The SEC is expected to issue a proposed rule in the coming months that would require companies to publicly disclose human capital metrics, including diversity information similar to the EEO-1 report. Meanwhile, investors such as State Street Global Advisors and the New York City Comptroller have pressed large companies to publicly disclose EEO-1 reports, including through shareholder proposals, while Illinois state law requires companies that file EEO-1 reports to submit similar reports to the state, which the state will then make public.
Outlook: Given the increasing pressure to publicly disclose EEO-1 reports, any additional EEO-1 disclosures would mean a level of transparency that many companies may be uncomfortable with from both a legal and public image perspective. Further, many companies view the EEO-1 form as an incomplete and often skewed portrait of a company’s diversity and inclusion profile, with incomplete data disaggregation, outdated and/or ill-fitting job categories, and lack of narrative context. Increased data collection within the EEO-1 report and increased pressure and legal obligation to make the report public may only exacerbate such concerns.
