California Governor’s Executive Order on Disaster Unemployment Assistance for Child Care Providers in Los Angeles
On February 11, 2025, Governor Gavin Newsom issued an executive order to support childcare providers impacted by the recent wildfires in Los Angeles. This order ensures that those affected are aware of their eligibility for Disaster Unemployment Assistance (DUA) and receive the necessary support to apply.
In addition to supporting individual workers, the EDD offers several disaster-related services to employers affected by emergencies. These services are designed to provide financial relief and support business continuity during challenging times.
Employers directly impacted by a disaster can request up to a two-month extension to file their state payroll reports and deposit payroll taxes without penalty or interest.
The EDD collaborates with Local Assistance Centers and Disaster Recovery Centers established by the California Governor’s Office of Emergency Services (Cal OES) or federal authorities to provide comprehensive support to affected businesses.
Employers can also access information about Disability Insurance (DI) and Paid Family Leave (PFL) benefits for their eligible workers, ensuring that employees who are unable to work due to disaster-related reasons receive the necessary financial support.
The “Gold Card”: Analyzing the Latest Immigration Innovation
In public remarks on Tuesday February 26th, President Trump spoke about a proposal for a new type of U.S. visa, a “Gold Card”. While the President did not go into details, he suggested that this new visa could be issued to companies or to individuals for $5 million per card. Other members of the administration suggested that this new status will replace the existing EB-5 investor visa program. If the administration chooses to pursue implementing this new visa, the proposal will have to go through multiple stages of development including congressional legislation to update the Immigration and Nationality Act, making President Trump’s statement about availability within weeks unlikely.
If this proposal does become law, the United States will join several other countries with “Golden Visa” programs, including Portugal, the UAE, Dominica, and Thailand. These programs are designed to attract foreign investment by granting residency or citizenship in exchange for substantial financial contributions, such as investments in real estate, business, or government bonds. The U.S. program differs as it is designed to pay off the U.S. debt rather than create jobs through investment. If this program becomes law, it will be the most expensive Golden Visa in the world.
There is a significant tax benefit attached to this Gold Card proposal. Wealthy foreign nationals tend to avoid becoming U.S. permanent residents and/or U.S. citizens to avoid U.S. taxation on their worldwide income. To attract future Gold Card holders, the administration says the U.S. will not tax them on their worldwide income, but only on their U.S. income. This will give Gold Card holders a benefit not provided to current permanent residents or U.S. citizens. It is unclear if the idea is for this benefit to continue if they choose to become U.S. citizens or is only available to those who remain in Gold Card status.
Government Contractors Should Prepare for Executive Order 14222, “Implementing the President’s ‘Department of Government Efficiency’ Cost Efficiency Initiative,” Directing Agency Heads to Terminate or Modify Existing Government Contracts and Grants
On February 26, 2025, President Trump issued Executive Order 14222, Implementing the President’s “Department of Government Efficiency” Cost Efficiency Initiative (Feb. 26, 2025) (“EO 14222”). EO 14222’s purpose is to commence “a transformation in Federal spending on contracts, grants, and loans to ensure Government spending is transparent and Government employees are accountable to the American public.” EO 14222 includes several significant provisions that government contractors need to be prepared to address. Many of those are highlighted in this alert.
1. Which Agencies and Contractors are Impacted by EO 14222?
Under Executive Order 14158 – Establishing and Implementing the President’s “Department of Government Efficiency” (Jan. 20, 2025), the President established the United States DOGE Service and required that each “Agency Head” of each Government “Agency” establish within that Agency a “DOGE Team.” An “Agency”, with a few exceptions, generally means any executive department, military department, Government corporation, Government controlled corporation, or other establishment in the executive branch. However, President Trump exempted his own office from any of the DOGE requirements by declaring that “the Executive Office of the President and any components thereof” is not an Agency. The “Agency Head” means the highest-ranking official of an Agency, such as the Secretary, Administrator, Chairman, or Director.
EO 14158 confirms that the DOGE Team for each Agency “will typically include one DOGE Team Lead, one engineer, one human resources specialist, and one attorney.” Once the DOGE Team is established for an Agency, it is required to work with the Agency Head and the United States DOGE Service to modernize federal technology and software to maximize governmental efficiency and productivity.
While EO 14158 implemented DOGE generally across the entire Federal Government, the recently issued EO 14222 directs DOGE Teams in only certain Agencies to review and implement changes to federal spending on particular contracts and grants. Only “covered contracts and grants” are impacted by EO 14222, which does not include “direct assistance to individuals; expenditures related to immigration enforcement, law enforcement, the military, public safety, and the intelligence community; and other critical, acute, or emergency spending, as determined by the relevant Agency Head.”
EO 14222 also does not apply to:
Law enforcement officers, as defined in 5 U.S.C. 5541(3) and 5 CFR 550.103, or covered contracts and grants directly related to the enforcement of Federal criminal or immigration law;
U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement in the Department of Homeland Security;
Uniformed Services, as defined in 20 CFR 404.1330 (Air Force, Army, Navy, Coast Guard, or Marine Corps);
Any other covered grant or contract, agency component, or real property that the relevant Agency Head exempts in writing from all or part of this order, in consultation with the agency’s DOGE Team Lead and the Director of OMB; and
Classified information or classified information systems.
Therefore, government contracts related to law enforcement, national defense, immigration and customs enforcement, public safety, and the intelligence community are all exempt from the requirements of EO 14222. However, government contractors working outside of these categories, including covered contracts issued by the Departments of Agriculture, Energy, Health and Human Services (though excluding individual assistance like Medicare), Interior, Labor, Transportation, Treasury, and Veterans Affairs are all subject to the requirements of EO 14222, unless exempted by the Agency Head. Similarly, covered contracts issued by the General Services Administration, Environmental Protection Agency, and the Small Business Administration are also subject to EO 14222 unless the Agency Head excludes them or unless they relate to one of the exempted categories of funding (i.e., military, law enforcement, etc.). Accordingly, a significant number of government contractors need to be aware of EO 14222 and should take immediate steps to prepare for its impacts.
2. What New Regulatory Mandates Does EO 14222 Impose?
a. New Public Database to Record Every Government Payment Issued by the Agency for Each of the Agency’s Covered Contracts and Grants, Along With a Written Justification For Each Payment.
EO 14222 issues new requirements for the establishment of a public payment approval database, which will require approvals for every Government payment made under covered contracts and grants, and will publicly post the amount of those Government payments, along with a Government employee’s written approval justifying the payment:
Each Agency Head shall, with assistance as requested from the agency’s DOGE Team Lead, build a centralized technological system within the agency to seamlessly record every payment issued by the agency pursuant to each of the agency’s covered contracts and grants, along with a brief, written justification for each payment submitted by the agency employee who approved the payment.
Once this payment system is implemented in accordance with EO 14222, the Agency Head (in consultation with the agency’s DOGE Team Lead) is then required to issue guidance for the Agency that will require every Government payment under any covered federal contract or grant to have a written justification and approval from an authorized Government employee. Furthermore, this payment system “shall include a mechanism for the Agency Head to pause and rapidly review any payment for which the approving employee has not submitted a brief, written justification within the technological system.”
Notably, EO 14222 does not include any minimum acquisition threshold that would limit its application to payments above a certain amount. By noting that “every payment” must be posted in this system with a brief written justification from an approving employee, it appears that it will apply to even the most routine payments of the smallest amounts, which raises interesting and potentially concerning questions. For example, what will constitute a sufficient written justification from a Government employee? While the justification is required to be made by the Government employee, will the Government nonetheless flow down that requirement so that contractors are required to prepare a written justification for each request for payment even if the contract does not require it? If so, who will pay for the contractor to develop these written justifications for every single payment made under a covered government contract? Time will tell with each of these questions.
While there are now scant details related to how this new software system will exactly work or when it will be implemented, once the system is in place, it will certainly have a direct impact on how (or if) payments will be made under covered contracts and grants. As guidance is released in the future, government contractors would be wise to track closely any additional imposed requirements that are not written in their contracts. To the extent that new obligations are imposed, contractors should also closely track expenses caused by these new requirements so that they can submit claims and requests for equitable adjustment in appropriate circumstances.
b. Government’s Immediate Review of Covered Contracts and Grants, Which Can Result in the Government’s Termination or Modification of Those Contracts and Grants.
EO 14222 also provides direction to each Agency Head to review, modify, and potentially terminate all covered contracts and grants “to reduce overall Federal spending or reallocate spending to promote efficiency and advance the policies of [the Trump] administration[:]”
Each Agency Head, in consultation with the agency’s DOGE Team Lead, shall review all existing covered contracts and grants and, where appropriate and consistent with applicable law, terminate or modify (including through renegotiation) such covered contracts and grants to reduce overall Federal spending or reallocate spending to promote efficiency and advance the policies of [the Trump] Administration. This process shall commence immediately and shall prioritize the review of funds disbursed under covered contracts and grants to educational institutions and foreign entities for waste, fraud, and abuse. Each Agency Head shall complete this review within 30 days of the date of this order.
Therefore, by Friday, March 28, 2025, each Agency Head is required to review each existing covered contract and grant, and then is encouraged to terminate or modify such covered contracts and grants to reduce overall Federal spending or reallocate spending to promote efficiency and advance the policies of the Trump administration. This direction will have immediate impacts on government contractors with covered contracts, which requires immediate preparation.
c. Government’s Immediate Review of Contracting Policies and Procedures and Contracting Personnel.
EO 14222 also imposes on Agency Heads with covered contracts an obligation to comprehensively review all of the Agency’s contracting policies, procedure, and personnel by March 28, 2025:
Each Agency Head, in consultation with the agency’s DOGE Team Lead, shall conduct a comprehensive review of each agency’s contracting policies, procedures, and personnel. Each Agency Head shall complete this process within 30 days of the date of this order and shall not issue or approve new contracting officer warrants during the review period, unless the Agency Head determines such approval is necessary.
While EO 14222 does not expressly state that new contract actions will be entirely eliminated, contractors competing for covered contracts should be aware of the possibility of cancelled solicitations. Contractors also should know that Agencies do not have unlimited discretion to cancel a pending solicitation. Seventh Dimension, LLC v. United States, 160 Fed. Cl. 1, on reconsideration in part, 161 Fed. Cl. 110 (2022) (finding that the cancellation of a solicitation violated procurement regulations and was arbitrary and capricious); see also Parcel 49C Ltd. P’ship v. United States, 31 F.3d 1147 (Fed. Cir. 1994) (holding that cancellation of solicitation by General Services Administration had no rational basis).
Therefore, to the extent that a contractor has submitted a proposal in response to a solicitation that appears to be arbitrarily canceled as part of the EO 14222 review process, the contractor should closely review its protest rights and talk with a bid protest attorney about protest opportunities.
3. How Should Government Contractors Prepare for The Impacts of EO 14222 and Similar Executive Orders?
The impacts of EO 14222 are far-reaching and yet to be fully determined. However, because EO 14222 directs Agencies to modify and terminate covered government contracts, any contractor with one of those contracts should take immediate steps to prepare.
a. Closely Review The Changes Clause and Suspension of Work Clause In Your Covered Government Contract to Understand the Notice Requirements Along With Your Potential Entitlement to Compensation for Changes or Suspensions.
Contractors with covered contracts should closely review FAR Part 43 – Contract Modifications and should be prepared to take appropriate action if modifications are sought to a covered contract. For example, pursuant to FAR 43.104, contractors should be prepared to provide quick written notification of contract changes to the contracting officer if they are impacted by any provisions of EO 14222, including potential requests by the Agency to perform work that is not required by the covered contract.
Contractors should also review closely the applicable changes clause included in their covered contracts. For example, FAR 52.243-1 Changes—Fixed-Price makes clear that, if any Government-directed change causes an increase or decrease in the cost of, or the time required for, performance of any part of the work under a contract, the contracting officer shall make an equitable adjustment in the contract price, the delivery schedule, or both, and shall modify the contract. Similarly, FAR 52.243-2 Changes—Cost-Reimbursement (Aug. 1987), states that when a Government-directed change causes an increase or decrease in the estimated cost of, or the time required for, performance of any part of the work under a cost reimbursement contract, the Contracting Officer shall make an equitable adjustment in the (1) estimated cost, delivery or completion schedule, or both; (2) amount of any fixed fee; and (3) other affected terms and shall modify the contract accordingly. Contractors need to track closely any changes made to their covered contracts by the Government and need to provide quick written notice to the Agency that describes those changes.
Similarly, contractors also should review FAR 52.242-14 Suspension of Work to understand how to respond if the Agency orders the contractor to suspend, delay, or interrupt all or any part of the work under the covered contract as a result of EO 14222. “Under FAR 52.242-14, a contractor is entitled to an equitable adjustment when the government constructively suspends work by delaying work for an unreasonable amount of time.” Nassar Grp. Int’l, ASBCA No. 58451, 19-1 BCA ¶ 37,405 (citing CATH-dr/Balti Joint Venture, ASBCA Nos. 53581, 54239, 05-2 BCA 133,046 at 163,793 and other cases). In order to preserve these rights to an equitable adjustment, contractors should provide quick written notice to the Agency when the suspension occurs.
b. Closely Review the Termination for Convenience Clauses In Your Covered Government Contracts To Understand Your Rights and Opportunity to Submit a Termination Settlement Proposal.
So long as it is not done in bad faith, the Government has broad authority to terminate contracts for convenience.
To the extent that a covered contract is terminated under the direction of EO 14222, contractors should closely review FAR Part 49-Termination of Contracts and the relevant termination for convenience clauses included in their covered contracts (e.g. FAR 52.249-2, FAR 52.249-3, etc.) to evaluate the deadlines and requirements for submitting a termination settlement proposal to the Agency.
While the Government unfortunately has broad authority to terminate contracts for the Government’s own convenience, contractors are entitled to submit termination settlement proposals to the Government to obtain payment for certain costs incurred because of the termination. See FAR 49.206-1; FAR 49.602-1. Contractors should review these FAR provisions and speak with a government contracts attorney to prepare those termination settlement proposals.
c. Maintain Detailed Documentation of the Cost and Time Impacts Associated With Any Modification or Termination.
Contractors with covered contracts will need to support their requests for equitable adjustment, claims, and/or termination settlement proposals with detailed documentation of the costs incurred as a result of the direction from the Government. Therefore, contractors should be very careful to ensure that they are documenting closely the communications that they are receiving from the Government that could be construed as a change and also should document the impacts of those changes on the performance time and costs associated with the covered contract. Contractors should engage their performance personnel, accounting departments, and their contract management departments to all collectively maintain this detailed documentation.
d. Communicate With a Legal Professional Before Accepting Any Modification or Signing Any Waiver of Future Rights.
As noted above, EO 14222 directs each Agency Head, in consultation with the Agency’s DOGE Team Lead, to modify or terminate covered contracts to reduce overall federal spending or to reallocate spending to promote efficiency and advance the policies of the Trump Administration.
Before agreeing to change the terms of an existing covered contract and certainly before signing any waivers or releases related to those changes, contractors should speak with a government contracts legal professional who can guide the contractor on the clauses and provisions noted above. For example, since FAR 52.243-1 discussed above entitles a contractor to an equitable adjustment in certain circumstances, the contractor needs to be cautious to avoid waiving that right through signing a modification that fails to provide adequate compensation or time to address the change.
e. Communicate With Your Subcontractors And Suppliers About EO 14222 and the Potential Impacts From Similar Executive Orders.
Prime contractors should ideally already have flow-down provisions in their subcontracts and supplier agreements that allow the contractor to terminate for convenience any subcontract and/or supply agreement to the extent that the Government terminates the prime contract. Prime contractors that do not have these flow down provisions in their subcontracts should immediately talk with their subcontractors and suppliers about including them.
However, even if those flow-down provisions are included, prime contractors with covered contracts should also maintain open communication with their suppliers and subcontractors to ensure that they are aware of any modifications, changes, suspensions, or terminations that might impact the subcontract or supply agreement. As further guidance is issued about EO 14222 and similar executive orders, prime contractors are going to be in the best position if they make sure everyone in the supply chain is aware of the potential risk.
Conclusion
Contractors with covered contracts should closely review EO 14222 and should take the steps outlined in this client alert to prepare for its impacts.
Summary of the Executive Order Implementing the President’s Department of Government Efficiency Cost Efficiency Initiative – Mandatory Agency Review of Federal Contracts, Grants and Loans
On February 26, 2025, President Trump issued an Executive Order (EO), “Implementing the President’s ‘Department of Government Efficiency’ Cost Efficiency Initiative,” aiming to transform Federal spending related to covered Government contracts, grants and loans to ensure Federal spending is transparent. This order requires that agencies, in consultation with the Department of Government Efficiency (DOGE), immediately review all existing covered contracts and grants, and, where appropriate, either terminate or modify such contracts and grants. In this review, which must be completed within 30 days, agencies must prioritize the review of funds disbursed to educational institutions and foreign entities for review of waste, fraud and abuse.
What Covered Contracts and Grants are Subject to Review?
Covered contracts and grants include discretionary spending through Federal contracts, grants, loans and related instruments. Covered contracts and grants exclude direct assistance to individuals; expenditures related to immigration enforcement (including U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement in the Department of Homeland Security), law enforcement, the military, public safety and the intelligence community (including classified information or classified information systems); and other critical, acute or emergency spending, as determined by the relevant agency.
What Does this Review Mean for Contractors and Grantees?
This new EO indicates that the administration, acting through DOGE, will continue to increase its level of scrutiny of grants and contracts, resulting in more substantial cuts. Contractors and federal award recipients should be prepared to exercise their rights in the event of complete or partial termination of any agreements, especially with regard to financial recovery. This preparation involves understanding the termination provisions applicable to your agreements and having thorough documentation and justification of all costs incurred in support of work under each agreement.
You also should consider contingency planning in the event your contract is terminated. Your obligations under the federal Worker Adjustment and Retraining Notification (WARN) Act and state law equivalents may be implicated if you were to terminate employees who were working on the cancelled contract. With reductions in force, there also could be discrimination or retaliation issues depending on how you select employees for termination. You may have certain obligations under the Age Discrimination in Employment Act (ADEA), depending on those selected for termination. Understanding your responsibilities under these laws will help you better plan for responding to a cancellation.
Additional Requirements
Payment Justification Records. Each agency, in collaboration with DOGE, must build a centralized system to record every payment (including those for federally funded travel) issued by the agency pursuant to its covered contracts and grants, along with a written justification by the agency employee who approved the payment. These written payment justifications must be publicly posted, subject to some exceptions.
New Guidance. Going forward, agencies must issue guidance on signing new contracts or modifying existing contracts. Agencies may approve new contracts prior to the issuance of such guidance on a case-by-case basis.
Credit Card Freeze. All credit cards held by agency employees are frozen for 30 days from the date of this order, subject to limited exceptions.
Real Property Disposition. Within seven days, agencies must provide confirmation to the Administrator of General Services that the Federal Real Property Profile Management System is up to date and reflects a complete and accurate inventory of the agency’s real property. Within 30 days, each agency must identify all termination rights under existing leases of government-owned real property and, in consultation with DOGE and the Administrator of General Services, determine whether to exercise such rights. Within 60 days, the Administrator of General Services must submit a plan to the Director of the Office of Management and Budget (OMB) for the disposition of government-owned real property which each agency deemed as no longer needed.
Healthcare Preview for the Week of: March 3, 2025 [Podcast]
Attention Turns to Government Funding
Last week, after some drama on the floor, the House passed its version of a budget resolution in a 217 – 215 vote, a week after the Senate passed its “skinny” resolution. For the reconciliation process to move forward, the chambers must work together to agree on an aligned resolution, which is likely to include Medicaid reforms.
Reconciliation will move to the background for these next two weeks as Congress shifts its focus to government funding. The continuing resolution (CR) passed in late December 2024 funded the government through March 14, 2025. The CR also included healthcare extenders, such as Medicare telehealth flexibilities, disproportionate share hospital payments, and the hospital at home waiver, but they have an expiration date of March 31 (read more on the full list of extenders here). Republican lawmakers are debating the length and scope of the next government funding package, which could be a “clean” CR to fund the government through the remainder of fiscal year 2025. If public statements are accurate, spending cuts related to Department of Government Efficiency efforts may not be pursued in this immediate government funding package. House Republicans will likely need votes from Democrats to pass a CR, so all eyes are on the outline of this package.
In his first congressional address since returning to the White House, President Trump will head to Congress on Tuesday night to deliver an address to a joint session of Congress. Like a state of the union, the address will likely focus on Trump’s agenda for his next four years, including actions on immigration, tariffs, extending tax cuts, and reducing the government’s footprint. While healthcare is not anticipated as a feature of the speech, Trump could discuss his executive orders on healthcare price transparency, Make America Healthy Again, and gender-affirming care for youth, and could lay out additional healthcare agenda priorities. Sen. Elissa Slotkin (D-MI) will provide the Democratic response.
The Senate will continue with nomination hearings this week. The Senate Health, Education, Labor, and Pensions (HELP) Committee will hold back-to-back hearings for National Institutes of Health (NIH) director nominee Jay Bhattacharya, MD, on Wednesday and US Food and Drug Administration commissioner nominee Martin Makary, MD, on Thursday. Sen. Warren (D-MA), although not on the HELP Committee, sent both nominees letters requesting confirmation that they would not lobby for the industries they would regulate for four years after leaving office. Similar topics are likely to be brought up during the hearings. Bhattacharya’s hearing will also likely focus on the recent NIH guidance capping indirect costs for research grants and his views on research transparency and NIH structure reform. Later this week, the Medicare Payment Advisory Commission will meet and discuss various topics, including draft recommendations to reform the physician fee schedule and reduce cost-sharing for outpatient services at critical access hospitals.
Today’s Podcast
In this week’s Healthcare Preview, Debbie Curtis and Rodney Whitlock join Julia Grabo to discuss the state of the government funding package ahead of the March 14 deadline.
Regulated Entities: It’s Time to Play Love It or Leave It with Federal Regulations
Amidst the flurry of Executive Orders (“EOs”) that tends to accompany any new administration, one EO may have flown under the radar. But for the regulated community—which, these days, includes most businesses in some form or another—this EO could be both a source of opportunity and of angst.[1]
EO 14219, titled “Ensuring Lawful Governance and Implementing the President’s ‘Department of Government Efficiency’ Deregulatory Initiative” (the “Deregulation EO”), was issued on February 19.[2] Consistent with the president’s long-stated goal to streamline and minimize federal agency regulation, the Deregulation EO sets forth a series of directives to federal agencies aimed at reducing regulations and minimizing the administrative state. This client alert summarizes the Deregulation EO and opines on the opportunities for the regulated community to seek reform or deregulation, on the one hand, or to prioritize existing or new regulations, on the other.
The Deregulation EO
The Deregulation EO directs all agency heads to review their existing regulations within 60 days for consistency with law and the administration’s policy aims, in conjunction with the Department of Government Efficiency (“DOGE”) and the Office of Management and Budget (“OMB”), and, as necessary, the Attorney General. The agencies are required to identify for deregulation their regulations that fit within any of seven categories:
Those that are unconstitutional or those that raise serious constitutional questions, such as the scope of power vested in the federal government by the Constitution:
This category is aimed at regulations that exceed the power of the federal government;
Regulations that are based on unlawful delegations of legislative power:
This category stems from the constitutional Nondelegation Doctrine, which has seen renewed interest in recent years by courts and commentators.[3] The Nondelegation Doctrine is the principle that Congress cannot delegate its legislative or lawmaking powers to other entities—including Executive Branch agencies. Historically, to pass constitutional muster, when Congress did delegate to an agency, it was required to do so by providing “intelligible principles” to the agency to guide it in its rulemaking—a relatively lax standard. But in recent years, the Nondelegation Doctrine seems poised to grow some teeth;
Regulations that are based on anything other than the best reading of the underlying statute:
This category aligns with the Supreme Court’s decision last term in Loper Bright that overruled the Chevron doctrine—the principle that if an agency’s interpretation of an ambiguous statute was reasonable, even if not the best reading, the reviewing court should defer to the agency. In Loper Bright, the Court held that reviewing courts should not defer to an agency’s interpretation of an ambiguous statute, but may only view such interpretations as persuasive[4];
Those that implicate matters of “societal, political, or economic significance that are not authorized by clear statutory language”:
This principle appears aimed at the “major questions doctrine,” announced in 2022 by the Supreme Court’s decision in West Virginia v. EPA, 597 U.S. 697. There, the Court held that an agency may not resolve through regulation a question of “vast economic and political significance” without a clear statutory authorization;
Regulations that impose significant costs on private parties that are not outweighed by public benefits;
Those that harm the national interest by “significantly and unjustifiably impeding technological innovation, infrastructure development, disaster response, inflation reduction, research and development, economic development, energy production, land use, and foreign policy objectives”; and
Regulations that impose undue burdens on small business and impede private enterprise and entrepreneurship.
These last three categories appear to be aimed at the business interests this administration has expressed an intention to prioritize. The directive to conduct such a comprehensive review of existing regulations and sort them into the categories listed above could be a significant undertaking for agency heads and staff, who may be simultaneously working on directives under other EOs and adjusting to the realities of reduced personnel. And as such, there may be opportunities for affected businesses to provide input, as addressed below.
The Effect of the Deregulation EO
Upon the expiration of the 60-day review period, the Office of Information and Regulatory Affairs (“OIRA”) is directed to consult with the agency heads to develop a “Unified Regulatory Agenda” to rescind or modify any regulations agencies have identified as fitting within the seven categories. In other words, the agencies are directed to deregulate, to the extent their existing regulations fall within any of these seven classes.
Further, the Deregulation EO stresses that agency heads should deprioritize regulatory enforcement of any regulations that “are based on anything other than the best reading of the statute” or those that go beyond the powers of the federal government (classes (1) and (3) above). Agency heads, in consultation with OMB, also are directed to review ongoing enforcement proceedings on a case-by-case basis and to terminate those that “do not comply with the Constitution, laws, or Administration policy.” While it might initially seem that agencies would be reluctant to categorize their own regulations into the categories mentioned in the EO (e.g., unconstitutional; based on unlawful delegations of legislative power; based on other than the best reading of the underlying statute), new personnel within various agencies are likely bringing different perspectives about existing regulations, and may have specific ideas already about the particular regulations that they believe should be rescinded.
Finally, the Deregulation EO directs agencies to promulgate new regulations, consistent with the process set forth in EO 12866 for submitting new regulations to OIRA for review, and to consult with DOGE about such new regulations. OIRA is directed to consider the factors set forth in EO 12866 as well as the seven principles set forth in the Deregulation EO. The Deregulation EO also directs the OMB to issue implementation guidance as appropriate.
Takeaways for the Regulated Community
Many businesses are subject to federal regulation, in some capacity. While the EO does not contemplate involvement by the regulated community in the 60-day review of agency regulations, nothing prevents affected industries from taking the apparent opportunity that now exists to identify and offer perspective to particular agencies and/or to OIRA about specific regulations that are problematic to their business, whether because of costs, technical compliance difficulties, or policy differences, and explaining why a regulation fits into one of the seven categories outlined in the Deregulation EO. [5]
Furthermore, if a business is subject to an ongoing enforcement proceeding (or the threat of one), the administration directive that agencies terminate such proceedings on a case-by-case basis provides a similar opportunity for companies to convey their thoughts to the relevant agency about the lawfulness and/or priority goals of the regulation at issue in that proceeding.
On the other hand, if there are regulations that are particularly beneficial to a given industry, or in which significant time or capital has been invested to further compliance, the industry may want to ensure these regulatory schemes are preserved. For these regulatory schemes, businesses may also want to reach out to the relevant agency proactively to explain why such regulations are consistent with the Deregulation EO, in an attempt to avoid the uncertainty or costs that could accompany any roll back.
While the EO does not clarify whether the coming deregulation process will follow the standard notice and comment rulemaking process of the Administrative Procedure Act—which requires a notice of proposed rulemaking in connection with the repeal of an existing regulation—that process will afford further opportunity for industry to submit comments on any regulations that an agency intends to repeal.
The Loper Bright, Corner Post, Jarkesy, and Ohio v. EPA cases demonstrate that a changing administrative state brings both opportunities and risks.[6] Staying proactive in addressing the regulatory regime applicable to a company’s industry is the best way to “take the bull by the horns”—whether that is in an effort to jettison existing, burdensome regulations, or to retain efficient, functional regulations.
Download This Alert
[1] See, e.g., Estimating the Impact of Regulation on Business | The Regulatory Review.
[2] Available at Ensuring Lawful Governance and Implementing the President’s “Department of Government Efficiency” Regulatory Initiative – The White House
[3] E.g., Move Over Loper Bright — Nondelegation Doctrine Is Administrative State’s New Battleground | Carlton Fields
[4] Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024).
[5] Nb. There presently are various legal challenges to many of the administration’s EOs, so any action by a regulated entity should be carefully considered (perhaps in conjunction with the relevant agency) to withstand an Administrative Procedure Act or other legal challenge.
[6] Legal Experts to Lay Out Recent SCOTUS Decisions’ Impact on Business – PA Chamber
The New Enforcement Landscape Under the Trump Administration’s Executive Orders
President Trump’s executive orders, signed on January 20, 2025, have significantly altered the immigration enforcement landscape. Key changes include:
Declaring a national emergency at the southern border
Expanding enforcement priorities to include broader categories of removable immigrants
Increasing Immigration and Customs Enforcement (ICE) presence for more worksite enforcement operations
Revoking federal funding from jurisdictions not complying with federal immigration laws
These actions signal a renewed focus on worksite enforcement, with increased audits, raids, and stricter penalties for I-9 violations. Employers must be prepared for unannounced visits that could disrupt operations and potentially lead to employee detentions in light of the Trump administration’s recent executive orders on immigration enforcement, ICE, and the Fraud Detection and National Security (FDNS) unit of U.S. Citizenship and Immigration Services (USCIS). The following guide outlines critical steps employers should take to ensure I-9 compliance, E-Verify compliance, and prepare for potential site visits.
I-9 Compliance Guide
The cornerstone of immigration compliance for employers is proper completion and maintenance of I-9 forms. Here are the essential steps to ensure I-9 compliance:
1. Timely Completion
Ensure Section 1 is completed by the employee on or before the first day of employment.
Complete Section 2 within three business days of the employee’s start date.
2. Document Verification
Physically examine documents presented by employees to establish identity and work authorization.
For E-Verify participants, ensure that List B documents contain a photograph.
3. Record Keeping
Retain I-9 forms for all current employees and for terminated employees as required by law.
Store I-9 forms securely, separate from other personnel records.
4. Regular Audits
Conduct internal audits of I-9 forms to identify and correct errors.
Consider using electronic I-9 systems to streamline compliance and reduce errors.
5. Training
Provide comprehensive training to HR personnel on I-9 compliance requirements.
Ensure staff understands proper completion, storage, and retention of forms.
E-Verify Compliance Guide
To prepare for a potential E-Verify site visit, employers should take the following compliance steps:
1. Account Maintenance
Ensure at least one program administrator is listed on the E-Verify account.
Keep the company profile up to date.
Verify all users have completed required tutorials, including refresher training.
2. Documentation and Record-Keeping
Maintain organized and secure storage of all I-9 forms and E-Verify records.
Be prepared to present all information originally submitted with E-Verify petitions.
Ensure List B identity documents have a photo.
3. Correct Records, as Needed
As per the E-Verify User Manual, if an employer discovers they inadvertently failed to create a case by the third business day, they should bring themselves into compliance immediately by creating a case for the employee. However, this applies to recent hires, not long-term employees.
The E-Verify User Manual goes on to say, “Do not create a case for an employee whose first day of employment is before the effective date of the employer’s MOU.”[1] As such, for employees who have been with the company for a while, submitting an E-Verify case long after their start date is generally not recommended.
4. Workplace Notifications
Clearly display E-Verify Notice of Participation and Right to Work posters in English and Spanish.
Consider displaying posters digitally, online, or providing copies with job applications.
5. Training and Preparation
Ensure all staff involved in I-9 verification are well-trained and up to date on procedures.
Conduct regular internal audits to identify and correct any compliance issues.
Consider having an attorney conduct an external audit to preserve privilege.
Preparing for Site Visits
With the increased possibility of ICE or FDNS site visits, employers should take proactive steps to prepare:
1. Develop a Written Response Protocol — create a comprehensive plan that outlines:
Designated points of contact for handling site visits;
Steps for verifying the identity and authority of visiting agents;
Procedures for notifying legal counsel and management; and
Guidelines for employee interactions with agents.
2. Designate and Train Key Personnel
Appoint primary and alternate contacts familiar with immigration compliance.
Ensure these representatives are prepared to greet inspectors and facilitate the visit.
Train front-line employees on how to respond to agent arrivals.
3. Know Your Rights and Limits
Understand the difference between administrative and judicial warrants.
Be aware that ICE agents cannot enter private areas without a valid judicial warrant or consent.
Clearly mark and designate private areas within your workplace.
4. Prepare Documentation
Maintain organized and easily accessible I-9 records.
Keep copies of visa petitions, Labor Condition Applications, and other relevant immigration documents for foreign national employees readily available.
Consider creating a “compliance binder” with key information about your organization and employees.
5. Educate Employees
Inform employees about their rights during a site visit, including the right to remain silent and request legal representation, and the right to refuse to sign documents without legal advice.
Provide “Know Your Rights” cards to employees, which are available in multiple languages.
Conduct mock site visits to train/familiarize staff with procedures and teach them how to best respond to inquiries politely and assertively.
During a Site Visit:
If ICE or FDNS agents arrive at your workplace, follow these steps:
Verify Credentials: Ask to see and record the agents’ identification and badge numbers.
Review Warrants: If presented with a warrant, carefully review its scope and validity.
Contact Legal Counsel: Immediately notify your designated legal representative.
Limit Access: Only provide access to areas and documents specified in a valid warrant (for ICE visits) or (in FDNS visits) documents, information, and interviews related to information that was provided in an immigration benefits filing for a foreign national worker.
Document the Visit: Take detailed notes of all interactions, including questions asked and answers provided.
Accompany Agents: Do not leave agents unattended in your workplace.
Maintain Calm: Encourage employees to remain calm and professional throughout the process.
Post-Visit Actions
After a site visit, take the following steps:
Debrief with legal counsel and the management team.
Review notes and documentation from the visit.
Address any compliance issues identified during the inspection.
Consider conducting a full I-9 audit, if not recently completed.
Reinforce training for employees based on the visit experience.
Potential Consequences and Penalties
Employers should be aware of the increased penalties for I-9 violations in 2025:
Type of Violation
Old Fine
New Fine
Substantive Form I-9 violations (minimum)
$281
$288
Substantive Form I-9 violations (maximum)
$2,789
$2,861
Knowingly employing undocumented workers – 1st order
$698–$5,579
$716–$5,724
Knowingly employing undocumented workers – 2nd order
$5,579–$13,946
$5,724–$14,308
Knowingly employing undocumented workers – subsequent
$8,369–$27,894
$8,586–$28,619
Document fraud – 1st order
$575–$4,610
$590–$4,730
Document fraud – subsequent order
$4,610–$11,524
$4,730–$11,823
Prohibition of indemnity bonds
$2,789
$2,861
Further, E-Verify participation may be terminated and employers will be reported to agencies that investigate illegal employment activities if E-Verify finds evidence of misuse, abuse, discrimination, and/or fraud.
These steep penalties underscore the importance of maintaining strict compliance with immigration laws and being prepared for potential site visits.
In Conclusion
As the enforcement landscape evolves under the new administration, employers must prioritize I-9 compliance and preparation for potential site visits. By implementing robust compliance programs, training staff, and developing clear response protocols, businesses can mitigate risks associated with immigration enforcement actions.
Remember, while cooperation is generally advisable, employers also have rights during these visits. Balancing cooperation with protection of your business interests is crucial. By staying informed, prepared, and proactive, employers can navigate this challenging environment while maintaining compliance.
[1] “MOU” refers to the E-Verify Memorandum of Understanding for Employers.
Environmental Law Monitor: Navigating the Shifts in Environmental Policy and Law Under the Trump Administration [Podcast]
On this episode of the Environmental Law Monitor, Daniel Pope and Taylor Stuart discuss the shifting landscape under the new Trump administration, comparing regulatory actions and priorities with those of previous administration, and delve into the complexities of NEPA regulations, endangered species and the impact of political changes on environmental legal practice. They explore how these transitions will affect legal practitioners and the energy sector and speculate on what to expect in the coming months.
Episode Highlights
[2:50] The Trump Administration’s Approach to NEPA: Taylor and Daniel discuss the significant actions from the Trump administration impacting environmental law, namely the Council on Environmental Quality’[JP1] s action to remove NEPA regulations from the Code of Federal Regulations. They briefly review the current state of NEPA and its impact on federal agencies.
[9:05] The Impact of Federal Workforce Downsizing on Environmental Law Space: Environmental legal practitioners will likely see a shift in their day-to-day work, particularly if they communicate often with agencies. Taylor expects to see an uptick in citizen lawsuits by NGOs challenging Trump’s administrative actions.
[12:51] The Trump Administration’s Efforts to Roll Back Environmental Regulations: Taylor and Daniel discuss the current administration’s positions on the Good Neighbor Rule and the Endangered Species Act, litigation surrounding these regulations/rules and the complexities around overturning them.
[24:28] Trump 2.0 vs. Trump 1.0: Compared to the first administration, the second Trump administration is much more prepared to carry out its environment agenda. Taylor expects to see progress on and clarity around energy and environmental issues, especially given the administration’s prioritization of energy independence.
Connecticut Bill Addresses “Shrinkflation”
The Connecticut legislature is considering an anti-price-gouging bill (House Bill 6856) that would add new disclosure requirements for food companies that adjust product sizes without price changes (a practice referred to as “shrinkflation”).
If passed, the bill would require companies to “provide a clear and conspicuous notice” for at least 12 months when they reduce the “quantity, amount, weight, or size of a product” without adjusting the price. The bill applies to “essential groceries covered by federal Supplemental Nutrition Assistance Program (SNAP) regulations, including baby formula, bread, cereals, dairy products, meats and fish, non-alcoholic beverages, seeds, and snacks.” The language excludes retailers and establishments, like restaurants, that “primarily sell food to the public for consumption.”
According to Connecticut Attorney General William Tong, “[a]lthough companies must update their labels to reflect product size changes, they are not currently required to advertise that they have made a change. Since the pandemic, price sensitive consumers have started to notice these changes—for example when they open their favorite box of crackers or bag of chips only to realize that the box or bag is only half full. This leaves consumers feeling deceived and like they are receiving less value for their hard-earned dollars.”
If passed, Connecticut would be the only state in the US to explicitly address shrinkflation.
Alabama Eyes Portable Benefits for Freelancers and Gig Workers
Certain states have considered enacting legislation facilitating the creation of portable benefit accounts for independent contractors, including gig economy workers. These accounts attach to the individual worker rather than a specific employer, allowing them to pay for various expenses such as health benefits, income replacement insurance, life insurance, and retirement benefits. Alabama may join Utah as one of the first states with portable benefits by way of Senate Bill (SB) 86, which was introduced on February 4, 2025, by Alabama Senator Arthur Orr (R).
Quick Hits
Alabama Senator Arthur Orr introduced a bill on February 4, 2025, to create portable benefit accounts for independent contractors.
The bill proposes that independent contractors open portable benefit accounts managed by providers, with contributions from hiring parties being optional and incentivized through state tax deductions.
If passed, the new law will take effect on October 1, 2025.
Under Alabama’s proposed Portable Benefits Act, an independent contractor must first open a portable benefit account. A “portable benefit account provider,” such as an investment management firm, and/or a technology provider or program manager that offers services through a bank or investment management firm, would administer the plan.
The “hiring party,” defined as “[a] person or entity who hires or enters into a contract for the performance of work with an independent contractor,” could contribute to the independent contractor’s portable benefit account in two ways:
From its own funds, or
Withholding a percentage of the independent contractor’s compensation, if the independent contractor agrees to such withholding in a signed agreement.
According to the bill, any contributions made by the hiring party to the portable benefit account “shall not be used as a criterion for determining a worker’s employment classification.”
Under SB 86, contributions to the portable benefit account are not mandatory. The legislation provides incentives in the form of Alabama state tax deductions. Specifically, the bill states that a hiring party that uses its own funds to contribute to a portable benefit account may deduct 100 percent of that amount as a business expense on its yearly Alabama tax return. SB 86 further provides that independent contractors may deduct “100 percent of the amount contributed by a hiring party as a form of compensation to a portable benefit account,” as well as 100 percent of the amount contributed by the worker, as an adjustment to income on the individual’s Alabama state income tax return.
If passed, the proposed “Portable Benefits Act” would take effect on October 1, 2025.
President Trump Addresses EB-5 Green Card Program and Proposes New Gold Card Immigration Program
On Feb. 25, 2025, President Trump announced that he will seek to end the U.S. EB-5 Immigrant Investor Program, which provides foreign investors with permanent residency in the United States. The EB-5 program requires a foreign national to invest in U.S. businesses that create 10 or more jobs per investor. The program has an investment amount of $1,050,000 that can be reduced to $800,000 if the investment is made in a high unemployment area, rural area, or through a government infrastructure project. Investors and their dependents are able to attain U.S. citizenship after five years of permanent residency.
Trump’s announcement aims to replace the EB-5 visa with a “Gold Card” program, which the president stated would require an investment of $5 million and that would grant “green card plus benefits,” including a path to citizenship, which the EB-5 program already provides. No further details were given, although in his announcement he noted that a detailed plan would be published in the next two weeks. According to the president, the goal is to attract wealthy people to the United States that would create businesses and help reduce the country’s deficit.
However, the president does not have the authority to ignore or override an act of Congress, including the Immigration and Nationality Act. Congress is given the authority to pass immigration laws that control admission, exclusion, and naturalization. This power is based on the Constitution’s Article 1, Section 8, Clause 18, which gives Congress the power to make laws that are necessary and proper to carry out the Constitution’s power. Likewise, the Supreme Court has ruled that Congress has “plenary” power over immigration, which means that Congress has almost complete authority over the passage of immigration laws. In 2022, Congress reauthorized the EB-5 program through Sept. 30, 2027, with the passage of the EB-5 Reform and Integrity Act. The president does not have authority to strike down an act of Congress, including the existing EB-5 program. Likewise, Congress has exclusive control over the allocation of employment based green card numbers and any change to that would need to be done by amending the Immigration and Nationality Act. The president can propose new immigration legislation, but only Congress can make new laws and amend existing laws. The president also has the authority to enforce immigration laws through agencies like U.S. Citizenship and Immigration Services, U.S. Immigration and Customs Enforcement, and U.S. Customs and Border Protection. Any attempt to strike down the EB-5 program may be met with immediate judicial action to enjoin and strike down any such proposal.
U.S. Moving Forward With Tariffs on Canada, Mexico Imports and Increasing China Tariffs
On Feb. 27, President Donald Trump announced to the press while in the Oval Office that he intends to move forward with the implementation of 25 percent tariffs on imports of goods from Canada and Mexico.
On Feb. 21, the White House published an Executive Order announcing the imposition of 25 percent tariffs on goods imported from Canada and Mexico. Two days later, President Trump reached a deal with the presidents of Canada and Mexico to delay the tariffs for a month pending talks on new border control measures. The goal/speculation was that during that window, deals would be reached with both countries to avoid the imposition of tariffs.
However, President Trump announced that he would be moving forward with the tariffs, effective March 4, 2025, on both countries due to them not doing enough to stop the flow of drugs into the U.S.
When the tariffs were announced on Feb. 1, both Canada and Mexico announced that they would be imposing retaliatory tariffs on imports of goods from the U.S. With the U.S. moving forward with tariffs on both countries, we expect them to impose tariffs on goods from the U.S. in the coming days.
Additional Tariffs on China
On Feb. 1, the White House published an Executive Order announcing 10 percent tariffs on imports of goods from China, citing national security concerns. However, on Feb. 27, President Trump announced an additional 10 percent tariff on imports of goods from China, which would also go into effect on March 4. China has already announced retaliatory tariffs on the imports of goods from the U.S.; with the doubling of the tariffs on goods imported from China, we expect China to retaliate even further on goods coming from the U.S.
Drugs are still pouring into our Country from Mexico and Canada at very high and unacceptable levels. A large percentage of these Drugs, much of them in the form of Fentanyl, are made in, and supplied by, China.
www.nytimes.com/…