Key Insights on President Trump’s New AI Executive Order and Policy & Regulatory Implications
On January 23, 2025, President Trump issued a new Executive Order (EO) titled “Removing Barriers to American Leadership in Artificial Intelligence” (Trump EO). This EO replaces President Biden’s Executive Order 14110 of October 30, 2023, titled “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence” (Biden EO), which was rescinded on January 20, 2025, by Executive Order 14148.
The Trump EO signals a significant shift away from the Biden administration’s emphasis on oversight, risk mitigation and equity toward a framework centered on deregulation and the promotion of AI innovation as a means of maintaining US global dominance.
Key Differences Between the Trump EO and Biden EO
The Trump EO explicitly frames AI development as a matter of national competitiveness and economic strength, prioritizing policies that remove perceived regulatory obstacles to innovation. It criticizes the influence of “engineered social agendas” in AI systems and seeks to ensure that AI technologies remain free from ideological bias. By contrast, the Biden EO focused on responsible AI development, placing significant emphasis on addressing risks such as bias, disinformation and national security vulnerabilities. The Biden EO sought to balance AI’s benefits with its potential harms by establishing safeguards, testing standards and ethical considerations in AI deployment and deployment.
Another significant shift in policy is the approach to regulation. The Trump EO mandates an immediate review and potential rescission of all policies, directives and regulations established under the Biden EO that could be seen as impediments to AI innovation. The Biden EO, however, introduced a structured oversight framework, including mandatory red-teaming for high-risk AI models, enhanced cybersecurity protocols and monitoring requirements for AI used in critical infrastructure. The Biden administration also directed federal agencies to collaborate in the development of best practices for AI safety and reliability efforts that the Trump EO effectively halts.
The two EOs also diverge in their treatment of workforce development and education. The Biden EO dedicated resources to attracting and training AI talent, expanding visa pathways for skilled workers and promoting public-private partnerships for AI research and development. The Trump EO, however, does not include specific workforce-related provisions. Instead, the Trump EO seems to assume that reducing federal oversight will naturally allow for innovation and talent growth in the private sector.
Priorities for national security are also shifting. The Biden EO mandated extensive interagency cooperation to assess the risks AI poses to critical national security systems, cyberinfrastructure and biosecurity. It required agencies such as the Department of Energy and the Department of Defense to conduct detailed evaluations of potential AI threats, including the misuse of AI for chemical and biological weapon development. The Trump EO aims to streamline AI governance and reduce federal oversight, prioritizing a more flexible regulatory environment and maintaining US AI leadership for national security purposes.
The most pronounced ideological difference between the two executive orders is in their treatment of equity and civil rights. The Biden EO explicitly sought to address discrimination and bias in AI applications, recognizing the potential for AI systems to perpetuate existing inequalities. It incorporated principles of equity and civil rights protection throughout its framework, requiring rigorous oversight of AI’s impact in areas such as hiring, healthcare and law enforcement. Not surprisingly, the Trump EO did not focus on these concerns, reflecting a broader philosophical departure from government intervention in AI ethics and fairness – perhaps considering existing laws that prohibit unlawful discrimination, such as Title VI and Title VII of the Civil Rights Act and the Americans with Disabilities Act, as sufficient.
The two orders also take fundamentally different approaches to global AI leadership. The Biden EO emphasized the importance of international cooperation, encouraging US engagement with allies and global organizations to establish common AI safety standards and ethical frameworks. The Trump EO, in contrast, appears to adopt a more unilateral stance, asserting US leadership in AI without outlining specific commitments to international collaboration.
Implications for the EU’s AI Act, Global AI and State Legal Frameworks
The Trump administration’s deregulatory approach comes at a time when other jurisdictions, particularly the EU, are moving toward stricter regulatory frameworks for AI. The EU’s Artificial Intelligence Act (EU AI Act), which was adopted by the EU Parliament in March 2024, imposes comprehensive rules on the development and use of AI technologies, with a strong emphasis on safety, transparency, accountability and ethics. By categorizing AI systems based on risk levels, the EU AI Act imposes stringent requirements for high-risk AI systems, including mandatory third-party impact assessments, transparency standards and oversight mechanisms.
The Trump EO’s emphasis on reducing regulatory burdens stands in stark contrast to the EU’s approach, which reflects a precautionary principle that prioritizes societal safeguards over rapid innovation. This divergence could create friction between the US and EU regulatory environments, especially for multinational companies that must navigate both systems. Although the EU AI Act is being criticized as impeding innovation, the lack of explicit ethical safeguards and risk mitigation measures in the Trump EO also could weaken the ability of US companies to compete in European markets, where compliance with the EU AI Act’s rigorous standards is a legal prerequisite for EU market access.
Globally, jurisdictions such as Canada, Japan, the UK and Australia are advancing their own AI policies, many of which align more closely with the EU’s focus on accountability and ethical considerations than with the US’s pro-innovation stance under the Trump administration. For example, Canada’s Artificial Intelligence and Data Act emphasizes transparency and responsible development, while Japan’s AI guidelines promote trustworthy AI principles through multistakeholder engagement. While the UK has a less regulated approach than the EU, it has a strong accent on safety through the AI Safety Institute.
The Trump administration’s decision to rescind the Biden EO and prioritize a “clean slate” for AI policy also may complicate efforts to establish global standards for AI governance. While the EU, the G7 and other multilateral organizations are working to align on key principles such as transparency, fairness and safety, the US’s unilateral focus on deregulation could limit its influence in shaping these global norms. Additionally, the Trump administration’s pivot toward deregulation risks creating a perception that the US prioritizes short-term innovation gains over long-term ethical considerations, potentially alienating allies and partners.
A final consideration is the potential for the Trump EO to widen the gap between federal and state AI regulatory regimes, inasmuch as it presages deregulation of AI at the federal level. Indeed, while the EO signals a federal shift toward prioritizing innovation by reducing regulatory constraints, the precise contours of the new administration’s approach to regulatory enforcement – including on issues like data privacy, competition and consumer protection – will become clearer as newly appointed federal agency leaders begin implementing their agendas. At the same time, states such as Colorado, California and Texas have already enacted AI laws with varying scope and degrees of oversight. As with state consumer privacy laws, increased state-level activity in AI also would likely lead to increased regulatory fragmentation, with states implementing their own rules to address concerns related to high-risk AI applications, transparency and sector-specific oversight.
Thus, in the absence of clear federal guidelines, leaving businesses with a growing patchwork of state AI regulations will complicate compliance across multiple jurisdictions. Moreover, if Congress enacts an AI law that prioritizes innovation over risk mitigation, stricter state regulations could face federal preemption. Until then, organizations must closely monitor both federal and state developments to navigate this evolving and increasingly fragmented AI regulatory landscape.
Ultimately, a key test for the Trump administration’s approach to AI is whether it preserves and enhances US leadership in AI or allows China to build a more powerful AI platform. The US approach will undoubtedly drive investment and innovation by US AI companies. But China may be able to arrive at a collaborative engagement with international AI governance initiatives, which would position China strongly as an international leader in AI. Alternatively, is DeepSeek a flash in the pan, a stimulus for US competition or a portent for the future?
Conclusion
Overall, the Trump EO reflects a fundamental shift in US AI policy, prioritizing deregulation and freemarket innovation while reducing oversight and ethical safeguards. However, this approach could create challenges for US companies operating in jurisdictions with stricter AI regulations, such as the EU, the UK, Canada and Japan – as well as some of those states in the US that have already enacted their own AI regulatory regimes. The divergence between the US federal government’s pro-innovation strategy and the precautionary regulatory model pursued by the EU and these US states underscores the need for companies operating across these jurisdictions to adopt flexible compliance strategies that account for varying regulatory standards.
Pablo Carrillo also contributed to this article.
Immigration Policy Tracker: January 20—February 5, 2025
The first three weeks of the new presidential administration resulted in numerous executive orders and agency actions impacting foreign nationals living and working in the United States. These actions were far-reaching, with potential impacts for employers and sponsored employees across the United States. This article discusses several of the actions that may have the most impact on employers, including updates on visa screening, potential travel restrictions, the sunset of temporary protected status (TPS) for Venezuela, and increased enforcement in sensitive locations, which include hospitals and universities.
Quick Hits
Visa Issuance Review: Several orders have the potential to impact trade visa issuance, visa screening procedures, and the potential for limitations on admission to the United States.
Sunset of TPS for Venezuela: Executive agencies are charged with reviewing humanitarian status programs, resulting in the first termination of temporary protected status programs.
Increased Enforcement: DHS rescinded a long-standing policy on conducting enforcement actions in sensitive locations, and President Trump issued an executive order that may impact universities with foreign students.
Review of Trade Agreements, Visa Issuance Procedures, and Potential for Travel Bans
The “America First Trade Policy” revisits and reviews the United States-Mexico-Canada Agreement (USMCA), as well as other existing U.S. trade agreements in consultation with other executive departments and agencies.
The outcome of this review has the potential to impact trade visa categories, including TN, E-1, E-2, E-3, and H-1B1 visas.
The “Protecting the United States From Foreign Terrorists and Other National Security and Public Safety Threats” executive order charges executive agencies, including the U.S. Department of State, with reviewing visa application vetting procedures. Agencies need to make a recommendation within the next sixty days if certain countries and their citizens require enhanced vetting or a full suspension of admission to the United States.
This order has the potential to increase visa processing times and may result in a partial or full suspension of entry for citizens from certain countries.
Humanitarian Programs Under Review
Last week, the 2023 TPS designation for Venezuela was officially terminated, sunsetting that program as of April 7, 2025. This was the most recent humanitarian program to come under review. The administration also suspended U.S. participation in the refugee admissions program for the next ninety days under the “Realigning the United States Refugee Admissions Program” executive order. All humanitarian parole and temporary protected status designations have been ordered to be reviewed by the U.S. Department of Homeland Security (DHS) pursuant to the “Protecting the American People Against Invasion” executive order.
TPS and other humanitarian parole programs account for over a million individuals in the United States, and a sunset of work authorizations in these categories may have impacts across the U.S. labor market.
Immigration Enforcement Expanded
Immigration enforcement was a central element of the incoming administration’s policy platform, and the first three weeks saw numerous executive orders relating enforcement actions.
DHS revoked a long-standing policy limiting enforcement actions at sensitive locations, which included schools, medical facilities, places of worship, social services establishments, children’s gathering places (playgrounds and childcare centers), places for disaster or emergency response and relief, wedding and/or funeral sites, and public demonstrations (parades, marches, demonstrations, and rallies).
With the rescission of the prior sensitive areas policy, enforcement actions may now be conducted in locations that had previously not experienced U.S. Immigration and Customs Enforcement (ICE) activity. ICE officers can conduct enforcement actions—which include arrests, interviews, searches, and surveillance—in sensitive areas without requiring authorization from senior DHS officials.
ICE officers are encouraged to use discretion, “along with a healthy dose of common sense” when conducting arrests, searches, and interviews in these locations.
On January 29, 2025, President Trump issued an executive order that affirms the administration will “us[e] all available and appropriate legal tools” to combat antisemitism, especially at higher education institutions. The order requests federal agencies to submit reports “[w]ithin 60 days of the date of [the] order” that include, among other data, inventory of all pending administrative complaints, complaints under Title VI of the Civil Rights Act of 1964, and court cases against universities alleging civil rights violations relating to antisemitic activities on campus.
The order also directs agencies to recommend ways to educate higher education institutions on the grounds for inadmissibility, enabling such institutions to monitor, report, and investigate relevant activities by foreign national students, faculty, and staff, potentially leading to their removal.
Key Takeaways
Executive orders impacting foreign national workers in the United States have created uncertainty for employers and employees. Given the stated policy platform of the administration, employers can expect additional policy changes in the coming weeks.
Kristen M. Tully also contributed to this article.
Attorney General Bondi’s Day One Orders for DOJ
Shortly after her confirmation, and just after her swearing-in by Associate Justice Clarence Thomas, U.S. Attorney General Pamela Bondi issued fourteen memoranda that seek to reform the Department of Justice by rescinding prior guidance, issuing new guidance, and establishing new priorities for the nation’s chief law enforcement and prosecuting agency. We examine below the actions taken by Attorney General Bondi.
“Elimination of Diversity, Equity, and Inclusion” (DEI): Two of the memos focus on the elimination of prior Diversity Equity and Inclusion (DEI) efforts at the Department and in the private sector. These directives stem from President Trump’s executive order on January 21, 2025 concerning “Ending Illegal Discrimination and Restoring Merit-Based Opportunity”. The first memo requires “[a]ll Department materials that encouraged or permitted race- or sex-based preferences as a method of compliance with federal civil rights laws” to be rescinded and replaced with new guidance. The second memo directs theDOJ’s Civil Rights Division to “investigate, eliminate, and penalize illegal DEI and DEIA preferences, mandates, policies, programs, and activities in the private sector and in educational institutions that receive federal funds.” For a full summary of the DOJ’s focus on DEI, go to the blog post by our colleagues in Labor and Employment.
Immigration. This memo directs the DOJ to withhold federal funding from, and pursue enforcement actions against, sanctuary cities. The memo cites 8 U.S.C. § 1373which provides that state or location jurisdictions “may not prohibit, or in any way restrict, any government entity or official from sending to, or receiving from, the Immigration and Naturalization Service information regarding the citizenship or immigration status, lawful or unlawful, of any individual.” The memo warns that any sanctuary cities that violate this statute will receive a cut in federal funding cuts.
Elimination of Cartels. This memo directs DOJ personnel to focus its efforts to eliminate cartels and transnational criminal organizations (TCOs). The memo identifies various enforcement mechanisms and resources that may be used in carrying out the directive. Notably, the memo calls for the Department to shift the focus of its prosecutions under the Foreign Corrupt Practices Act (FCPA) to “the criminal operations of Cartels and TCO”. Additionally, the memo removes the requirement that the Fraud Section of the Criminal Division handle all investigations and prosecutions under the FCPA, now permitting any U.S. Attorney’s Office to initiate charges with only 24 hours of advance notice to Main Justice required. It is unclear whether, and to what degree, DOJ will continue its pending corporate investigations and prosecutions and/ or initiate new ones.
Joint Task Force October 7. This memo focuses on the creation of the Joint Tasks Force October 7 to “seek[] justice for victims of the October 7, 2023 terrorist attack in Israel” and address ongoing antisemitic threats in the United States.
Charging, Pleas Negotiations, Etc. This memo outlines general policy regarding charging, plea negotiations, and sentencing for prosecutors. It lays out the Department’s criminal enforcement including immigration enforcement; human trafficking and smuggling; transnational organized crime, cartels, and gangs; and protection of law enforcement personnel. The memo also disbands the Foreign Influence Task Force and the National Security Division’s Corporate Enforcement Unit. [I think we should also note that the guidance is now to charge the most serious, readily provable crime, with the highest “recommended” sentence under the guidelines. Quote the language.]
“Zealous” Advocacy on Behalf of the U.S. This memo directs DOJ to “zealously defend the interest of the United States.” The memo emphasizes the responsibilities DOJ attorneys have to enforce the laws of the United States, but also highlights their responsibility to “vigorously defend[] presidential policies and actions against legal challenges on behalf of the United States.” This memo suggests discipline for DOJ attorneys that decline to sign briefs or appear in court on personal grounds or “otherwise delay or impede the Department’s mission.”
Recession of Biden Administration Guidance. Three of the memos roll back specific directives made by former Attorney General Merrick Garland who served in the Biden Administration, including those that pertained to the interpretation of guidance documents, third-party settlements to non-governmental, third-party organizations, and the prioritization of environmental prosecutions.
Death Penalty. Two memos focus on the death penalty—one memo directs U.S. Attorney’s Offices “to assist local prosecutors in pursuing death sentences under state law against the 37 commuted inmates” who’s sentence former President Joe Biden previously commuted, while the other memo revives the federal death penalty by lifting the moratorium on federal executions and provides for the re-review of pending cases potentially eligible for death.
DOJ Employees Back to the Office. This memo directs DOJ employees to return to work in-person by February 24, 2025 and reinforces President Trump’s January 20, 2025 Presidential Memorandum on the same matter.
Weaponization Work Group. This memo targets “abuses of the criminal justice process, coercive behavior, and other forms of misconduct.” The directive addresses Trump’s January 20 Executive Order concerning “Ending the Weaponization of The Federal Government” by establishing a “Weaponization Work Group,” tasked with reviewing criminal and civil enforcement over the last 4 years, and reporting to the White House “instances where a department’s or agency’s conduct appears to have been designed to achieve political objectives or other improper aims rather than pursuing justice or legitimate governmental objectives.”
Trump Administration Provides Some Guidance on DEI Programs
Following up on the Trump Administration’s series of executive orders and statements regarding diversity, equity, inclusion, and accessibility (DEI or DEIA) programs, on February 5, 2025, both the Office of Personnel Management (OPM) and the United States Attorney General Office issued memoranda reflecting additional guidance as to what may constitute an “illegal” DEI or DEIA program and directing enforcement action.
Specifically, the OPM memo instructs federal agencies to terminate “all illegal DEIA initiatives” and requires the elimination of DEIA offices, policies, and practices. It explains the administration’s view that any DEI program that encourages action based on a protected characteristic is illegal, even if it is not the sole reason for the action. The memo clarifies that it is not targeting agency departments that exist to counsel employees allegedly subject to discrimination or receive and respond to such discrimination complaints (such as the Equal Employment Opportunity Commission (EEOC)).
The memo further addresses Employee Resource Groups (ERG) and states that federal agencies must eliminate any ERG that promotes unlawful DEIA initiatives or otherwise involves programs designed to retain/train/develop their employees based on protected characteristics. It states that affinity and mentor programs are potentially permissible if attendance at and participation in such programs are not restricted by protected characteristics and participants are not segregated by such protected characteristics during events.
While the OPM memo only applies to federal employees, its contents offer insight as to how the administration views and seeks to define “illegal” DEIA initiatives. At its base, it is taking any action, promoting any action, or permitting any action (including participation or the denial of participation) that is premised upon (even partially) a protected characteristic.
The Attorney General memo announces that the Department of Justice will investigate, eliminate and penalize “illegal” DEI and DEIA programs, preferences, mandates, policies, and activities in the private sector and in educational institutions that receive federal funds.
The memo instructs the Civil Rights Division and the Office of Legal Policy to jointly submit a report to the Associate Attorney General by March 1, 2025, containing recommendations for enforcing federal civil rights laws and taking other appropriate measures to encourage the private sector to end illegal discrimination, including DEI and DEIA programs. The report is to include a list of the companies that are the most “egregious” offenders as well as a plan to enforce the requirement to eliminate such programs.
In a clarifying footnote, the memo states that the aim is to end illegal discrimination stemming from diversity initiatives and not to eliminate observances based on history (using Black History Month and Holocaust Remembrance Day as examples of such observances).
Since January 20, 2025, according to various news reports, private sector companies’ reactions have encompassed a wide spectrum, ranging from withdrawal of DEIA programs, doubling down and re-committing to such initiatives, and a more middle-of-the-road approach aimed at reviewing and modifying existing programs and initiatives.
We will continue to monitor what consequences such decisions may have. We again recommend that employers consult DEI experts and labor and employment counsel to assess whether their DEI/DEIA policies and practices may be construed to be out of compliance with existing federal antidiscrimination laws under a Trump-era lens and what changes (if any) in their policies and practices are necessary to ensure compliance or mitigate risk.
Attorney General Pam Bondi’s Ending Illegal DEI and DEIA Discrimination and Preferences Memo
On February 5, 2025, Attorney General Pam Bondi disseminated an internal memo within the Department of Justice (DOJ). The memo, Ending Illegal DEI and DEIA Discrimination and Preferences, explained that the DOJ’s Civil Rights Division will “investigate, eliminate, and penalize illegal DEI and DEIA preferences, mandates, policies, programs, and activities in the private sector and in educational institutions that receive federal funds.”
The memo is intended to only encompass programs, initiatives, or policies that “discriminate, exclude, or divide individuals based on race or sex.” The memo makes clear it does not prohibit “educational, cultural, or historical observances . . . that celebrate diversity, recognize historical contributions, and promote awareness without engaging in exclusion of discrimination,” such as Black History Month, International Holocaust Remembrance Day, or similar events.
Executive Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, signed by President Donald Trump on January 21, 2025, requires the Attorney General and the Director of the Office of Management and Budget to submit a joint report that includes recommendations to enforce federal civil-rights laws and “other appropriate measures to encourage the private sector to end illegal discrimination and preferences” within 120 days.
Consistent with Executive Order 14173, the DOJ memo requires the Civil Rights Division and Office of Legal Policy to submit a report discussing such recommendations and “other appropriate measures” by March 1, 2025.
The report to the Associate Attorney General must address a number of items, including a list of “the most egregious and discriminatory DEI and DEIA practitioners in each sector of concern” within the DOJ’s jurisdiction. The report must also include a plan identifying specific measures “to deter the use of DEI and DEIA programs or principles that constitute illegal discrimination or preferences, including proposals for criminal investigations and for up to nine potential civil compliance investigations of entities that meet” criteria in Executive Order 14173, which include publicly traded corporations, large non-profit corporations or associations, foundations with assets of $500 million or more, state and local bar and medical associations, and institutions of higher education with endowments over $1 billion. In addition, the Civil Rights Division and Office of Legal Policy must also recommend other approaches “to end illegal DEI and DEIA discrimination and preferences and to comply with all federal civil-rights laws” within the private sector.
Finally, the memo notes that the DOJ, working alongside the Department of Education, plans to issue directions, and the Civil Rights Division would pursue actions, “regarding the measures and practices required to comply with” the Supreme Court’s 2023 decision in Students for Fair Admissions v. Harvard, which held that educational agencies, colleges, and universities that received federal funds could not “treat some students worse than others in part because of race.”
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Major Changes in Affirmative Action Requirements for Federal Contractors
On January 21, President Trump signed an executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (the Order), revoking Executive Order 11246, the long-standing order that required federal contractors to engage in affirmative action, including by annually developing Affirmative Action Plans (AAP’s) concerning women and minorities. The Order further mandates that the Office of Federal Contract Compliance (OFCCP) immediately cease promoting diversity, investigating federal contractors for affirmative action compliance, and allowing or encouraging federal contractors to engage in workforce balancing.
Below are several key points that manufacturers who are federal contractors need to know:
Federal contractors are no longer required to create an AAP about women and minorities. However, this Order does not impact the affirmative action obligations stemming from the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) for protected veterans or the obligations under Section 503 of the Rehabilitation Act of 1973 for individuals with disabilities. Further, this Order does not absolve contractors of any obligations they may have under state law if they are also state contractors or any other applicable legal obligations.
The Order prohibits federal contractors from considering “race, color, sex, sexual preference, religion, or national origin in their employment, procurement or contracting practices in ways that violate the [n]ation’s civil rights laws.” Additionally, the Order states that federal contract recipients will be required to certify that they do not operate diversity, equity, and inclusion (DEI) programs “that violate any applicable Federal anti-discrimination laws.” Importantly, this does not wholly prohibit employers from having DEI-related policies and practices; rather, it prohibits only those that could be found to violate anti-discrimination laws, such as race-based quotas.
The Order provides contractors with a 90-day grace period during which they may continue to comply with the original regulations. Contractors should use that time to audit their policies and practices under attorney-client privilege to evaluate compliance with this order.
In addition, manufacturers that are not federal contractors may also be impacted by this Order. The Order scrutinizes DEI efforts in the private sector and requires federal agencies to, among other things, report a list of large corporations and organizations that should be subject to civil compliance investigations based on unlawful DEI programs. Accordingly, manufacturers may also want to consult with legal counsel about their DEI initiatives to ensure they are lawful.
Don’t Forget to Submit California Pay Data!
California’s pay data reporting requirements were established under Senate Bill (SB) 973, signed into law in 2020. The law mandates that private employers with 100 or more employees, including those hired through labor contractors, must annually report pay and demographic data to the California Civil Rights Department (CRD).
In 2022, Senate Bill (SB) 1162 expanded these requirements to include workers hired through labor contractors.
Under California’s law, employers must submit their pay data reports annually, with the deadline for the 2025 reporting year set for May 14, 2025. The report must include:
Employee demographic information: race, ethnicity, and sex.
Pay data: categorized by job category and pay band.
Hours worked: for each employee within the reporting year.
Compliance with these reporting requirements is not only a legal obligation but also a step toward promoting fair pay practices. By analyzing and reporting pay data, employers can identify and address potential pay disparities, ensuring equal pay for equal work.
The Civil Rights Department (CRD)’s pay data reporting portal is now open for submitting 2024 reporting. The CRD has published a handbook for employers that provides instructions for submitting and certifying annual reports, in addition to the Frequently Asked Questions page.
The CRD also cautions that Excel templates and CSV examples have been updated so employers should not use prior years’ versions as they will be rejected.
California Civil Rights Department Releases 2025 Pay Data Reporting Guidance—Adding New Race/Ethnicity Category
The California Civil Rights Department (CRD) recently released updated guidance for the 2024 pay data reporting cycle. The updated guidance makes significant changes to the race/ethnicity categories while leaving most other aspects of the prior year reporting process in place.
Quick Hits
California’s updated guidance adds a new racial/ethnicity category for the 2024 reports—”Middle Eastern or North African” (MENA).
The deadline for filing the 2024 California pay reports is May 14, 2025, and the platform opened for new filings on February 3, 2025.
California requires covered employers to file payroll employee reports for their own employees and requires covered employers to file labor contractor employee reports for their labor contractor employees.
California law mandates that private employers with one hundred or more employees, including those hired through labor contractors, must annually submit a pay data report to CRD, detailing employee pay, demographics, and other workforce data, including mean and median hourly wages broken down by race, ethnicity, and gender for each job category. Failure to comply can result in penalties of up to $100 per employee for the first offense and $200 per employee for subsequent violations.
Changes to Race/Ethnicity Categories
For the 2024 reporting cycle, CRD has added “Middle Eastern or North African” (MENA) as a new race/ethnicity category. This change is based on action taken by the U.S. Office of Management and Budget (OMB) to revise the Statistical Policy Directive No. 15 on race and ethnicity data standards. The newly published California Pay Data Reporting Handbook defines this category as “Individuals with origins in any of the original peoples of the Middle East or North Africa, including, for example, Lebanese, Iranian, Egyptian, Syrian, Iraqi, and Israeli.” Another change for the 2024 reporting cycle is that the former “Two or More Races” category has been changed to “Multiracial and/or Multiethnic.” A minor change has been made to remove the word “Other” from the “Native Hawaiian or Other Pacific Islander” category so that it is now “Native Hawaiian or Pacific Islander.” The 2024 reporting materials provide an updated race/ethnicity/sex codes incorporating these changes.
CRD directs employers to report employees in the new MENA category if this information is available. If that information is not available, employers may continue reporting these employees following prior guidance based on the U.S. Equal Employment Opportunity Commission’s (EEOC) instructions for reporting race/ethnicity on the EEO-1 survey. For instance, if an employer has self-ID information for employees where MENA was an available category, the employer may use that information to show which employees have identified under this category. On the other hand, if that information is not available, the employer is free to use the 2023 EEO-1 guidance with respect to these employees. Under the 2023 EEO-1 guidance, individuals with Middle Eastern and/or North African origins are under the “White” race/ethnicity category. This guidance means that employers that collected self-ID information under the prior EEO-1 guidance may continue to report using that self-ID information and do not have to gather new self-ID information to complete the 2024 reports.
Many Things Remain the Same
Outside of the changes to race/ethnicity categories, many of the reporting standards from 2023 remain in place for 2024, including the following:
CRD did not update its guidance as to which workers are labor contractor employees who must be included in the 2024 reports. There was some hope that CRD would provide additional information to help employers understand this requirement. However, the provided information seems to be nearly identical to the guidance in last year’s frequently asked questions (FAQs).
The twelve pay bands used in 2023 remain the same for 2024. Each reported employee’s 2024 W-2 wages are used to place that employee in one of these twelve pay bands for reporting purposes.
Client employers are encouraged to report to CRD labor contractors who do not supply all necessary reporting data but are not required to do so. Just as with the 2023 reporting cycle, the FAQs state that client employers “should” email CRD to report such labor contractors who do not provide all required reporting information. CRD tells client employers to provide names, addresses, and FEINs/SEINs of the labor contractors as well as documentation of the effort to obtain the required information in these emails.
The 2024 reports continue the requirement to provide the same information on remote workers required for the 2023 reports, including identifying which employees work remotely and which remote employees live in and outside California.
The 2024 guidance reinforces the point that labor contractors must provide data showing the client employer establishment where their labor contractor employees are assigned to perform work and that labor contractors should not provide data showing their own establishments. This has been a point of confusion since the labor contractor employee reporting began.
New Reference Resources
CRD has issued additional resources to help filers for the 2024 reporting cycle. For the first time, CRD has issued a 2024 California Pay Data Reporting Handbook. For prior reporting years, CRD had issued FAQs and other guidance, but before this year, it had not provided a handbook. The handbook is twenty-three pages long and organized into sections, starting with a discussion of which employers must file reports, moving to how the filing will be made, and covering other reporting requirements. Unlike the FAQs, which can sometimes be more challenging to follow, the handbook’s organization provides a more user-friendly guide to the pay data filing process. However, the FAQs may still need to be consulted, as they include additional details that could be important to filers.
Another change for the 2024 reporting cycle is that the instructions for completing the reporting templates for the payroll employee and labor contractor employee reports are no longer included as a tab in each template. Instead, the instructions are now found in separate ten-page-long documents. These instructions provide more details than the instruction tabs from prior year reporting cycles. Both sets of instructions include an overview section, step-by-step instructions, and a section discussing single-establishment and multiple-establishment reporting before providing a discussion of each column in the template. This discussion provides important information on the data being requested, the type of data accepted, and character limits. These updated instruction sets, as well as the handbook, are nice additions to CRD’s user resources.
To the extent that they have not yet done so, now may be a good time for employers to assess their preparations to file the 2024 California payroll employee and labor contractor employee pay data reports.
New Executive Orders May Contradict Federal Collective Bargaining Agreements
During his first two weeks in office, President Donald Trump issued several executive orders that may conflict with provisions embedded in federal union contracts and that have led to lawsuits challenging the actions.
Quick Hits
A number of new executive orders may contradict the terms of federal policies and union contracts, especially on issues like telework and diversity, equity, and inclusion (DEI).
Unions have responded by suing to block the executive actions that would end job protections for certain federal employees.
On January 20, 2025, President Trump issued an executive order to reclassify thousands of federal employees as at-will workers, in a category called “Schedule Policy/Career.” At-will employment would make it easier to discharge federal government employees, who will no longer be in the “competitive service” category and benefit from associated job protections.
Also on January 20, President Trump also released an executive order that directs all federal agencies to end remote work arrangements and require employees to return to the workplace full-time “as soon as practicable.” In some cases, this contravenes telework benefits provided in collective bargaining agreements. Prior to the executive order, more than half of federal employees were eligible to telework, according to a report from the U.S. Office of Personnel Management (OPM).
Another January 20 executive order halts all diversity, equity, and inclusion (DEI) programs, policies, and offices in the federal government. It directs OPM to review and revise all federal employment practices, union contracts, and training programs to comply with this new policy. It also instructs the U.S. attorney general to scrutinize private-sector DEI programs.
Furthermore, another January 20 executive order states that the federal government will recognize only two genders: male and female. It rejects the transgender and nonbinary categories. It rescinds previous guidance from the U.S. Equal Employment Opportunity Commission (EEOC) under the Biden administration, which held that LGBTQ employees are legally protected from harassment and discrimination under Title VII of the Civil Rights Act of 1964.
The EEOC’s new acting chair, Andrea Lucas, recently announced a policy shift on enforcement of antidiscrimination laws. She opposes the position that unlawful harassment under Title VII includes the “denial of access to a bathroom or other sex-segregated facility consistent with [an] individual’s gender identity” and the “repeated and intentional use of a name or pronoun inconsistent with [an] individual’s known gender identity.”
Some union contracts have clauses protecting LGBTQ workers from harassment, discrimination, and retaliation. Likewise, some union contracts guarantee workers access to restrooms that align with their gender identity, and require management to use an employee’s preferred name and pronouns.
Finally, on January 31, 2025, President Trump released an executive order nullifying collective bargaining agreements that were finalized with federal agencies during the last month of the Biden administration. The status of those recently ratified union contracts remains uncertain.
Next Steps
Depending on their written terms, some provisions in union contracts governing the employment of federal workers may no longer be enforceable based on the Trump administration’s executive orders related to telework, DEI, and protections for LGBTQ workers. The new executive orders that conflict with written union contract language call into question whether the directives are enforceable without collective bargaining.
Even though unions have filed lawsuits to challenge the new executive orders, the outcomes of those lawsuits remain uncertain.
China-Based Cotton Companies Added to UFLPA Entity List: What It Means for Apparel
The U.S. Department of Homeland Security (DHS) announced the addition of 37 companies based in the People’s Republic of China (PRC) to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List because of alleged use of forced labor. Of these, 26 operate in the cotton sector.
According to DHS, Huafu Fashion Co., Ltd. and 25 of its subsidiaries were identified as entities involved in cotton production linked to the Xinjiang Uyghur Autonomous Region (XUAR). Huafu operates a vertically integrated supply chain, ranging from cotton cultivation to textile manufacturing. Twenty-two of its subsidiaries are located in the XUAR, with the remaining three in Zhejiang Province.
With a vertically integrated supply chain spanning cotton cultivation, processing, and textile production, these entities present significant compliance risks for apparel companies sourcing from the PRC.
Businesses linked to these entities may face shipment detentions under UFLPA enforcement.
Breaking Down UFLPA Enforcement: Apparel and Textiles in Focus
In December 2024, U.S. Customs and Border Protection (CBP) processed more than 2.8 million entry summaries with a combined value exceeding $290 billion.
During the same period, CBP targeted 1,404 entries, valued at over $18.7 million, for suspected links to forced labor in supply chains. These efforts encompass goods subject to both UFLPA and Withhold Release Orders (WROs).
The apparel, footwear, and textiles sector UFLPA enforcement statistics:
Total shipments: 1,996 (up from 1,963 in December 2024)
Shipments denied: 1,274 (63.8%)
Shipments released: 649 (32.5%)
Shipments pending: 73
Total shipment value: $90.42 million
With nearly 2,000 shipments detained, the apparel and textile sector remains a critical target of CBP’s enforcement efforts. For the apparel and textile industry—known for its complex, global supply chains—this means increased compliance requirements and potential shipment detentions. Importers face significant risks, including delays, penalties, and reputational damage if they cannot demonstrate that their products are free of forced labor. As UFLPA enforcement intensifies, apparel and textile importers are encouraged to partner with compliance experts to navigate these complex regulations effectively.
This largest-ever batch of additions reinforces that we are implementing the full force of this law, making impactful updates to the UFLPA Entity List, and enhancing U.S. Customs and Border Protection’s enforcement capabilities.
www.dhs.gov/…
NCAA Bars Transgender Athletes from Women’s Sports Aligning With President Trump’s Executive Order
On February 6, 2025, the National Collegiate Athletic Association (NCAA) announced its new policy, prohibiting athletes assigned male at birth from participating in women’s sports competitions, aligning the NCAA eligibility rules with President Donald Trump’s recent executive order (EO) barring transgender athletes from women’s sports. The new rules reverse a prior policy of allowing athletes to participate in accordance with their gender identity.
Quick Hits
The NCAA Board of Governors voted to adopt an updated transgender athlete participation policy that prohibits athletes assigned male at birth from competing in NCAA women’s competitions.
The new policy aligns with President Donald Trump’s executive order barring transgender athletes from competing in women’s sports.
The executive order takes the position that allowing transgender participation in women’s sports undermines the fairness and opportunities for women and girls and threatens federal funding for educational programs that do not comply.
The NCAA aims to establish clear national eligibility standards in response to the differing state laws and court decisions surrounding this issue.
Under the updated participation policy for transgender athletes, “[r]egardless of sex assigned at birth or gender identity, a student-athlete may participate (practice and competition) in NCAA men’s sports, assuming they meet all other NCAA eligibility requirements.”
For women’s sports, “[a] student-athlete assigned male at birth may not compete for an NCAA women’s team.” However, such student-athletes “may continue practicing with a women’s team and receive all other benefits applicable to student-athletes.” “A student-athlete assigned female at birth who has begun hormone therapy (e.g., testosterone) may not compete on a women’s team.” However, they, too, may continue practicing with a women’s team and receive all other applicable benefits.
“We strongly believe that clear, consistent, and uniform eligibility standards would best serve today’s student-athletes instead of a patchwork of conflicting state laws and court decisions. To that end, President Trump’s order provides a clear, national standard,” NCAA President Charlie Baker said in a statement.
The change comes a day after President Trump signed an EO titled “Keeping Men Out of Women’s Sports.” The EO states that allowing transgender athletes to compete in women’s sports “is demeaning, unfair, and dangerous to women and girls, and denies women and girls the equal opportunity to participate and excel in competitive sports.”
While not directly addressing the NCAA, the EO declared that it is “the policy of the United States to rescind all funds from educational programs that deprive women and girls of fair athletic opportunities, which results in the endangerment, humiliation, and silencing of women and girls and deprives them of privacy.”
The EO had significant implications for the NCAA schools, which rely on federal funding. After the EO, NCAA President Baker said that the Board of Governors would “take necessary steps to align NCAA policy” with the EO.
Under the NCAA’s prior policy, adopted by the Board of Governors in January 2022, transgender women athletes were allowed to compete in NCAA women’s sports after submitting documentation of “gender affirming treatment” by a medical professional and evidence that their testosterone levels are “within the allowable levels for the sport” in which they plan to compete.
In addition, NCAA schools are faced with shifting interpretations of Title IX of the Education Amendments of 1972, which requires that schools provide equal opportunity to students, regardless of sex, including in terms of sports participation and “athletic financial assistance.”
On January 9, 2025, a federal court in Kentucky vacated a Biden-era U.S. Department of Education rule on Title IX adopted in 2024, which expanded the definition of sex-based harassment to include sexual orientation and gender identity. The Department of Education has since confirmed that it will enforce Title IX under a 2020 rule issued during President Trump’s first term.
The recent actions align with President Trump’s inauguration day EO 14168, titled “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,” which directed federal agencies to “enforce laws governing sex-based rights, protections, opportunities, and accommodations to protect men and women as biologically distinct sexes.”
Next Steps
The new NCAA participation policy will have significant implications for transgender athletes currently competing or seeking to compete in NCAA sports, likely meaning that they will no longer be able to compete in NCAA women’s competitions. Baker’s statements further indicate the NCAA’s desire for national standards in an era that has seen major changes to college sports and eligibility rules pushed by antitrust litigation and an inconsistent patchwork of state laws and regulations, including changes to athlete transfers, the allowance of compensation for name, image, and likeness, and the potential adoption of revenue sharing.
DOJ Begins Its Own DEI Enforcement Efforts
Wednesday evening, February 5, 2025, Attorney General Pam Bondi issued a series of memos to various divisions of the Department of Justice (DOJ). One memo asserted that the DOJ will take action to enforce President Trump’s efforts to eliminate illegal diversity, equity, and inclusion (DEI) initiatives, as outlined in Executive Order 14173 (“Ending Illegal Discrimination and Restoring Merit-Based Opportunity”).
This memo, titled “Ending Illegal DEI And DEIA Discrimination And Preferences,” tasks the DOJ’s Civil Rights Division with investigating, eliminating, and penalizing illegal DEI “preferences, mandates, policies, programs, and activities in the private sector and in educational institutions that receive federal funds.” By March 1, 2025, the Civil Rights Division and the Office of Legal Policy are to submit a report containing recommendations to “encourage the private sector to end illegal discrimination and preferences” related to DEI. That report is also supposed to identify the most “egregious and discriminatory DEI and DEIA practitioners in each sector of concern.” One big takeaway from this memo is the implication that some private companies may face criminal penalties for DEI initiatives.
Bondi also directs the DOJ to work with the Department of Education to eliminate DEI programs at universities, based on the Supreme Court’s 2023 decision in Students for Fair Admissions, Inc. v. Fellows of Harvard Coll., 600 U.S. 181 (2023).
Notably, the memo itself does not purport to prohibit educational, cultural, or historical observances that “celebrate diversity, recognize historical contributions, and promote awareness without engaging in exclusion or discrimination.” Examples of these types of observances include Black History Month and International Holocaust Remembrance Day.
This new effort from the DOJ will likely face legal scrutiny in the coming weeks, as federal courts have routinely upheld private employers’ First Amendment right to promote DEI. Employers should stay up to date with the rapidly evolving DEI landscape and consult with legal counsel as they evaluate their practices and initiatives for compliance with federal non-discrimination laws.