Quick Hits

• The EEOC has opened the 2024 EEO-1 Component 1 reporting period, emphasizing that employers must not use the reported demographic data to justify discriminatory employment practices based on race, sex, or other protected characteristics. 
• EEOC Acting Director Andrea Lucas warned employers that there is no “diversity exception” to Title VII of the Civil Rights Act, even if the data suggests employer policies may have a disparate impact on certain groups.
• The warning potentially complicates employers’ evaluation of their compliance with equal opportunity and antidiscrimination laws and regulations.

Current EEOC regulations require private employers with one hundred or more employees, and federal contractors with fifty or more employees that meet certain criteria to submit annual EEO-1 Component 1 reports with demographic data on their employees, including race/ethnicity, sex, and EEO job categories.

The EEOC states EEO-1 data is used in a variety of ways, including enforcement, self-assessment by employers, and research. Some employers have thus looked at their EEO-1 data and potential employment disparities to gain insights into their workforce demographics and evaluate their compliance with equal opportunity and anti-discrimination laws and regulations, including Title VII of the Civil Rights Act of 1964.

However, in announcing the platform’s opening, EEOC Acting Director Lucas warned employers that their “obligations under [Title VII] not to take any employment actions based on, or motivated in whole or in part by, an employee’s race, sex, or other protected characteristics.”

Specifically, Acting Director Lucas told employers that they may not use any potential race or sex disparities revealed in their employment data as a basis for implementing hiring or promotion policies that might give preferences to job candidates or employees based on sex, race, ethnicity, or other protected characteristics.

“Your company or organization may not use information about your employees’ race/ethnicity or sex—including demographic data you collect and report in EEO-1 Component 1 reports—to facilitate unlawful employment discrimination based on race, sex, or other protected characteristics in violation of Title VII,” Acting Director Lucas stated.

“There is no ‘diversity’ exception to Title VII’s requirements,” she added.

Disparate Impact

Acting Director Lucas pointed to President Donald Trump’s April 23, 2025, EO 14281, “Restoring Equality of Opportunity and Meritocracy,” which calls for an end to liability for unlawful discrimination based on disparate impact, under which employers may be held liable for neutral employment policies or practices that have a substantial adverse impact on a protected group, such as race or sex. Specifically, the EO directed federal agencies like the EEOC to deprioritize enforcement of disparate impact claims.

The acting director said that under her leadership, the EEOC will follow and enforce the EEOC and will prioritize remedying intentional discrimination claims. She reiterated that employers may not use information collected as part of an EEO-1 report to treat employees differently based on any protected characteristic.

“[T]he fact that a neutral employment policy or practice has an unequal outcome on employees of a particular race or sex—that is, has a ‘disparate impact’ based on race or sex—does not justify your company or organization treating any of your employees differently based on their race or sex. As noted above, you must not use the information collected and reported in your organization’s EEO-1 Component 1 report to justify treating employees differently based on their race, sex, or other protected characteristic.”

Next Steps

The EEOC announced that the 2024 EEO-1 Component 1 data collection filing platform is now open until June 24, 2025, at 11:00 p.m. (EDT), which the EEOC will not extend, and the platform will close. This means covered employees will need to promptly prepare and file their reports by the deadline to maintain compliance.

The EEOC acting director’s warnings are in line with recent EEOC guidance issued under her leadership and policy directives from the Trump administration. Since taking office in January 2025, President Trump has issued a series of EOs, which are facing numerous legal challenges, seeking to eliminate unlawful DEI programs in employment and revoking federal contractors’ affirmative action program mandates, largely stripping authority from the Office of Federal Contract Compliance Programs (OFCCP).

At the same time, the EEOC acting director’s warnings to employers could complicate employers’ efforts to maintain antidiscrimination compliance and evaluate potential risk for unlawful discrimination claims.