Trump Issues Executive Order on “Restoring America’s Maritime Dominance”
Last week, President Trump issued an Executive Order (EO) titled “Restoring America’s Maritime Dominance,” emphasizing the urgent need to revitalize the domestic maritime industry.
The EO acknowledges the decline of the U.S. flag fleet and the nation’s minimal role in global commercial shipbuilding.To address this, the EO calls for a Maritime Action Plan (MAP), developed by the National Security Advisor and other officials, with the goal of strengthening shipbuilding capabilities, enhancing maritime workforce training, and ensuring adequate commercial vessel capacity for national security. The EO also outlines legislative proposals, funding mechanisms, and deregulatory initiatives to support these objectives, including tariffs on Chinese-built ships, financial incentives for U.S. shipyards, and expanded mariner training programs.
My colleagues recently co-authored an article outlining the more than 20 actions included in the EO. Please refer to the article (or reach out directly) for more detailed guidance on implementation and compliance requirements.
It is the policy of the United States to revitalize and rebuild domestic maritime industries and workforce to promote national security and economic prosperity.
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California Bill Proposes a Vacancy Tax on Commercial Real Property
On Feb. 21, 2025, California State Sen. Menjivar introduced Senate Bill 789 (SB-789), proposing a vacancy tax aimed at commercial real property (property) to address prolonged vacancies, incentivize property activation, and generate revenue to support first-time home buyers through the California Dream for All Program. SB-789 is scheduled to become effective on July 1, 2028, with initial annual tax obligations due in 2029.
Summary of SB-789 Changes
Vacancy Tax on Commercial Real Property
SB-789 imposes an annual vacancy tax of $5 per square foot on properties remaining vacant for 182 or more days, whether consecutive or nonconsecutive, within a calendar year. The tax explicitly excludes residential spaces within mixed-use properties. Revenues collected would be directed exclusively to the California Dream for All Fund, aiding first-time home buyers.
Exemptions
The proposed tax would not apply under the following conditions:
1.
Active renovation: Properties undergoing construction or repair pursuant to an approved building permit, with work ongoing for at least 90 consecutive days.
2.
Legal or regulatory barriers: Properties subject to litigation, environmental reviews, or permitting delays that prevent occupancy.
3.
Natural disasters: Properties affected by natural disasters, including properties state or local authorities deem uninhabitable.
Compliance and Reporting Requirements
Property owners subject to the proposed tax must:
Register with the California Department of Tax and Fee Administration (CDTFA).
Electronically file annual returns by March 15 of each year, reporting the prior calendar year’s vacancy status, property square footage, and applicable exemptions. Supporting documentation, including lease agreements and utility records, may be required.
Penalties for Non-Compliance
Owners intentionally misstating information or making fraudulent claims would face civil penalties of up to 75% of the total tax liability.
Public Outreach and Reporting
The CDTFA would conduct public outreach to educate property owners on compliance and would publish
Annual reports that detail revenue, exemptions, and program outcomes.
Economic evaluations every five years, starting in 2033, that tracks the tax’s impact, its effectiveness, and compliance costs.
Potential Constitutional Conflict
The implementation of SB-789 faces potential constitutional challenges arising from pending litigation. Specifically, in Debbane v. City and County of San Francisco (Appeal No. A172067), property owners successfully challenged a San Francisco vacancy tax, arguing that it violated the Takings Clause of the U.S. Constitution. The city of San Francisco’s appeal of the trial court decision creates legal uncertainty about the constitutionality of vacancy taxes. If the First District Court of Appeal upholds the trial court’s ruling, it may set a precedent that prevents SB-789’s enactment.
Takeaway
SB-789 represents a shift in California’s approach to addressing vacant commercial properties. By imposing a vacancy tax, the bill seeks to revitalize local economies, reduce neighborhood deterioration, and generate funding for housing affordability initiatives. Property owners should familiarize themselves with the new requirements and consult with legal advisors to enhance compliance and understand the potential financial implications.
Bree Burdick and Samuel Weinstein Astorga also contributed to this article.
Mobile Workforce/Remote Worker Legislation Could Impact Your Business
Well-respected House Ways & Means-Education Committee Chair Danny Garrett (R-Trussville) has introduced HB 379, a bill designed to provide guidelines and a safe harbor for employers who have traveling employees or remote workers. The current version of the bill is based in part on the Council on State Taxation (COST)/AICPA model legislation (more on this below). COST is advocating passage of the uniform law across the country and six to seven states so far have enacted it in whole or in large part. Sen. John Thune (R-South Dakota) recently introduced federal legislation to the same end.
In short, if your traveling or remote employee is working in a state with this model act for less than 30 days in a calendar year, you (the employer) aren’t required to register with that state’s taxing authorities or withhold and remit that state’s income tax from the employee’s wages. However, if the employee works more than the safe harbor number of days, he or she is subject to income tax withholding in that state retroactively to the first day of his or her presence in that state.
Alabama is one of several states that asserts tax jurisdiction over a nonresident employer and its employees if they work in this state more than one day in a year.
We understand that Rep. Garrett has agreed to amend his bill to more closely conform with the COST/AICPA model act – and to add an exemption for employers with employees who enter this or another state to conduct disaster relief efforts. Thankfully, the Alabama Department of Revenue is working with Chairman Garrett and, like the authors, is now reviewing a proposed amendment to that end. If your business has traveling or remote workers, this bill should be important to you. Organizations supporting the bill, as amended, include the Alabama Society of CPAs, Manufacture Alabama, COST, and the AICPA.
Chairman Garrett predicts that the bill will come up for a vote in his Committee this week.
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President Trump Issues Executive Order on “Strengthening the Reliability and Security of the United States Electric Grid”
On April 8, President Donald Trump issued a series of orders and a proclamation (collectively the “orders”) intended to revitalize US coal production and the industrial use of coal, including for power generation. Among them was an Executive Order on “Strengthening the Reliability and Security of the United States Electric Grid”[1] directing the Secretary of Energy to take a series of steps intended to enhance electric grid reliability and security.
The order states “It is the policy of the United States to ensure the reliability, resilience, and security of the electric power grid,” and that the “electric grid must utilize all available power generation resources, particularly those secure, redundant fuel supplies that are capable of extended operations” to assure adequate generation, meet growing demand, and address the national energy emergency declared on January 20.[2]
Its directives to the Secretary include the following:
“[T]o the maximum extent permitted by law, streamline, systematize, and expedite the Department of Energy’s processes for issuing orders under section 202(c) of the Federal Power Act” during periods when a grid operator “forecasts a temporary interruption of electric supply.” FPA section 202(c) authorizes the Secretary, whenever he determines that an emergency exists “by reason of a sudden increase in the demand for electric energy, or a shortage of electric energy or of facilities for the generation or transmission of electric energy, or of fuel or water for generating facilities, or other causes . . . to require by order such temporary connections of facilities and such generation, delivery, interchange, or transmission of electric energy as in its judgment will best meet the emergency and serve the public interest.” It has been used sparingly during its history and almost always in response to requests by utilities or states to address short-term emergency conditions. Section 202(c) was substantially amended by Congress in 2015, ostensibly to provide liability protection for entities ordered to operate, but those changes also made use of the authority more cumbersome.
Within 30 days of the Executive Order, “develop a uniform methodology for analyzing current and anticipated reserve margins for all regions of the bulk power system regulated by the Federal Energy Regulatory Commission,” and upon doing so, “identify current and anticipated regions with reserve margins below acceptable thresholds.”
“[E]stablish a process by which the methodology . . . and any analysis and results it produces, are assessed on a regular basis, and a protocol to identify which generation resources within a region are critical to system reliability.” The protocol must include all mechanisms available to retain generation identified as critical.
“[P]revent, as the Secretary of Energy deems appropriate and consistent with applicable law, including section 202 of the Federal Power Act, an identified generation resource in excess of 50 megawatts of nameplate capacity from leaving the bulk-power system or converting the source of fuel of such generation resource if such conversion would result in a net reduction in accredited generating capacity,” as determined under the reserve margin methodology developed as a result of the Order.
To date, the Department of Energy (DOE) has not issued a public notice regarding revisions to its FPA section 202(c) procedures or the development of a uniform reserve margin methodology. DOE’s existing emergency authorities web page has also not been updated. Trade press reports indicate that the North American Electricity Reliability Corporation (NERC) staff is in contact with DOE regarding the new methodology. However, it is unclear to what extent DOE will consider industry input on the new methodology by the 30-day or 90-day deadlines.
By its terms, the Executive Order applies to coal-fired generation and was issued alongside other orders that focused exclusively on promoting coal and coal-fired generation. However, other resource types seemingly could be subject to it.
The Executive Order raises various legal questions, several of which might be tested in litigation. These include:
Whether the Secretary’s authority under FPA section 202(c) is broad enough to support the actions envisioned by the Executive Order or whether section 202(c) may be used only for temporary emergencies when supply is, or is in imminent danger of being, insufficient to meet demand.[4]
Whether DOE has legal authority to prohibit resources from retiring or from changing their fuel source for indefinite periods.
Whether the Executive Order is in conflict with the overall structure of the FPA, which generally reserves regulatory authority over electric generation to the States.
Whether there will be legal conflicts between DOE’s reserve margin methodology and NERC and Federal Energy Regulatory Commission [FERC]-approved resource adequacy, capacity accreditation, and “reliability must run” rules.
[1] Executive Order No. 14262, 90 FR 15521 (April 14, 2025).
[2] “Declaring a National Energy Emergency,” Executive Order No. 14156, 90 FR 8433 (Jan. 29, 2025).
[3] Robb: NERC Working with DOE on Energy Orders, RTO Insider (April 15, 2025).
[4] In Richmond Power & Light v. FERC, 574 F.2d 610, 617 (D.C. Cir. 1977), the court suggested that section 202(c) “speaks of ‘temporary emergencies,’ epitomized by wartime disturbances, and is aimed at situations in which demand for electricity exceeds supply and not at those in which supply is adequate[.]”
Executive Order Targets State Climate Laws, But Existing GHG Permit Requirements Remain Enforceable
On April 8, 2025, President Donald J. Trump issued an executive order titled Protecting American Energy From State Overreach. The order directs the U.S. attorney general to identify and take action against state and local laws “burdening” domestic energy development, especially laws addressing climate change, environmental, social, and government (ESG) initiatives, and environmental justice. The order highlights New York, Vermont, and California climate laws as examples of state actions that may be “beyond their constitutional or statutory authorities” and should be targeted by the Justice Department.
Key Provisions of the Executive Order
Identification of State Laws: The attorney general is tasked with identifying “all State and local laws, regulations, causes of action, policies, and practices:
–
That interfere with domestic energy development, and
–
That “are or may be unconstitutional, preempted by Federal law, or otherwise.
Of these, the attorney general is directed to prioritize identification of climate change, ESG, environmental justice, and carbon or greenhouse gas laws and regulations, as well as lawsuits brought under nuisance or other tort theories, such as those brought against fossil fuel producers.
Legal Action: The attorney general is directed to take “expeditious action,” including legal action, to halt the enforcement of such laws and policies and to prevent the continuation of related civil actions deemed illegal.
Reporting Requirement: By June 7, 2025 (within 60 days of the executive order), the attorney general must submit a report to the president detailing the actions taken and recommending additional “Presidential or legislative action” necessary to stop the enforcement of state laws burdening domestic energy development.
Implications for State Energy Regulations
The executive order reinforces the administration’s policy to “unleash American energy,” and targets state-level climate (and other) initiatives that the administration regards as ideological and contrary to federal policy initiatives to expedite domestic energy production. In furtherance of the order, the attorney general may pursue lawsuits challenging state and local laws on grounds such as the Commerce Clause, federal preemption, or other legal theories.
Additionally, based on other recent initiatives from the Trump administration, the Justice Department may attempt to use non-litigation tools such as the withholding federal funding from states that refuse to abandon laws and policies deemed objectionable to the administration.
State-Level Responses
The executive order has elicited swift responses from states with climate-focused laws. New York Gov. Hochul and New Mexico Gov. Michelle Lujan Grisham, co-chairs of the Climate Alliance, have pledged on behalf of the Alliance’s member states continue advancing their energy policies.
New York, in particular, has implemented some of the nation’s most ambitious climate policies, including requiring a net zero-emissions power grid by 2040 and limiting statewide GHG emissions to 15% of 1990 levels by 2050. Notably, the executive order specifically referenced legislation recently enacted in New York that would require compensatory payments by the fossil fuel industry to fund various climate initiatives, which is already being challenged by industry. New York and other similarly situated states are almost certainly preparing to defend their climate agendas, and the outcomes of these legal challenges could have far-reaching implications.
GT Insights
The attorney general faces a 60-day deadline to:
Identify burdensome state and local laws and policies in all 50 states;
Take action against laws deemed illegal; and
Prepare a report documenting such actions and recommending further actions to the president and Congress.
The attorney general may initially prioritize high-profile states and laws explicitly referenced in the executive order, such as New York, Vermont, and California. Litigation is inevitable, both to defend against Justice Department attempts to invalidate state climate programs and to challenge non-litigation measures the department might employ in furtherance of the order.
These legal battles are expected to test the boundaries of the U.S. Supreme Court’s landmark case, California Coastal Commission v. Granite Rock Co., 480 U.S. 572 (1987), which clarified that state law can be preempted if Congress demonstrates an intent to occupy the field or if the state law conflicts with federal law, making compliance with both impossible. At this time, however, state climate initiatives remain in effect until courts say otherwise or states move to revise their approaches.
Former U.S. Department of Labor Officials Pen Open Letter to Contractor Community Addressing Executive Order 14173 and the Current Administration’s Stance on Diversity, Equity and Inclusion
Ten former Department of Labor Officials, including former EEOC Commissioner and past OFCCP Director Jenny Yang, sent an open letter to federal contractors responding to President Trump’s issuance of Executive Order 14173 and newly appointed OFCCP Director Catherine Eschbach’s recent statements about OFCCP.
The letter is aimed to
“help federal contractors and other employers navigate this complex environment, providing clarity about their options and obligations under the law.”
The 14-page letter details how the current administration’s actions are in contravention of established law, explains compliance with Executive Order 11246 did not require the unlawful use of preferences or quotas, and describes how continued proactive practices, including self-assessments and data analysis to remove discriminatory barriers remain lawful and are essential to prevent discrimination.
The letter concludes reiterating that “America’s enduring promise is that talent and effort – not background or origin – should determine one’s path” and encourages the federal contracting community to “stand firm in your commitments to lawful diversity, equity, inclusion, and accessibility practices that promote civil rights compliance, true merit, and a strong economy.”
CMS Tells States “No More” Medicaid Section 1115 Matching Funds for Designated State Health Programs (DSHP) and Designated State Investment Programs (DSIP)
In recent years, the Centers for Medicare & Medicaid Services (CMS) has approved demonstrations under Section 1115 of the Social Security Act, providing federal matching funds for state expenditures for Designated State Health Programs (DSHP) and Designated State Investment Programs (DSIP) that advance the Medicaid program.
But on April 10, CMS published a State Medicaid Director Letter stating CMS “does not anticipate approving new state proposals of section 1115 demonstration expenditure authority for federal DSHP or DSIP funding or renewing existing Section 1115 demonstration expenditure authority for federal DSHP or DSIP funding, including when current DSHP or DSIP authority concludes before the expiration date of the demonstration.”
The reasoning? CMS has concluded that these programs were funded entirely without Medicaid funds prior to their approval, and the additional federal funds that they received “does not render these programs as integral components of section 1115 demonstration programs.” CMS now frowns on the notion that the federal government should: (i) share in the costs of funding these state programs; (ii) reduce state obligations with respect to services that CMS deems not otherwise covered by Medicaid; (iii) and “[serve] primarily as a financing mechanism for states, resulting in increased federal expenditures.”
“Despite the safeguards implemented in the post-2022 approvals of DSHP, CMS has renewed concerns about the same issues originally identified in 2017,” the letter states.
Background
Section 1115 of the Social Security Act provides the Secretary of Health and Human Services (HHS) with authority to approve experimental, pilot, or demonstration projects likely to further the traditional goals of the Medicaid program. The waiver authority specifically allows states to include the costs of such projects as spend under its Medicaid State plan, which makes the spend eligible for federal matching support so that the state no longer has to fund the services entirely out of its general fund. CMS reviews proposals on a case-by-case basis to determine alignment with Medicaid and federal policies (which we note tend to shift with each administration). These projects are, or were, generally approved for an initial five-year period and may be extended upon approval.
CMS attempted to phase out expenditure authority for DSHP in Section 1115 Demonstrations in 2017 and in 2022, limited the size and scope of DSHP with required state contributions, a cap on the total amount of federal and state DSHP expenditure authority, and time limits for federal funds.
The April 10 letter comes one week after the U.S. Senate voted 53-45 to confirm Dr. Mehmet Oz as the 17th CMS Administrator. A press release issued the same day briefly outlined Oz’s vision for the agency, focusing on:
Implementing the president’s February 25, 2025, executive order on health care price transparency;
Equipping health care providers with better patient information and holding them accountable for health outcomes (as an example, streamlining access to life saving treatments);
Identifying and eliminating fraud, waste, and abuse;
Fostering prevention, wellness, and chronic disease management over a focus on sick care (mentioning a focus on programs that improve holistic outcomes)
Another April 10 press release—entitled “CMS Refocuses on its Core Mission and Preserving the State-Federal Medicaid Partnership”—describes CMS policy with respect to DSHPs and DSIPs in more detail. It announces “an end to spending that duplicates resources available through other federal and state programs and are not tied directly to healthcare services.”
“DSHPs and DSIPS are state-funded health programs that, without ‘creative interpretations’ of section 1115 demonstration authority, would not have qualified for federal Medicaid funding,” the Core Mission press release states. It added that DSHPs and DSIPs have grown from approximately $886 million in 2019 to nearly $2.7 billion in eligible expenditures in 2025.
While it remains to be seen how far the “Core Mission” will go with respect to cutting initiatives that it deems too distant, examples of services that CMS has already determined do not tie “directly” to services provided to Medicaid beneficiaries include:
$11M in grants to a labor union in New York to reduce costs of health insurance for certain childcare providers;
$241M for a program in New York for non-medical in-home services, such as housekeeping;
$17M for a California student loan repayment program;
$20M in grants to high-speed internet for rural health care providers in North Carolina; and
$3.8M for a diversity in medicine initiative in New York.
Note that New York’s current 1115 Waiver Amendment, for example, covers a range of health-related social needs services (HRSNs) beyond “housekeeping” to address food, housing, and transportation instabilities that impact health outcomes for New York Medicaid enrollees; all of these would fall under the April 10 letter. We previously discussed New York’s 1115 Waiver Amendment here and here.
The Trump Administration has already changed its public resources to align with the messaging in the April 10 State Medicaid Director Letter. CMS updated its Medicaid pages to include the April 10 letter and to emphasize that demonstrations must be “budget neutral” to the federal government.
Takeaways
At an unprecedented time of cost-cutting in the federal government, CMS’s refusal to share in the costs of funding these state programs shifts the burden back to the states—which will also have to decide, at an unprecedented time of upheaval, whether to cover these costs. Too, we are perhaps looking at a CMS that is less likely to recognize, for example, long-recognized home and community asked services that provide assistance to daily living activities for someone electing to age in the community instead of in an institution, or education and workforce supports to those looking to contribute to the health care field. CMS pulled back on guidance relating to HRSNs in early March.
There are currently 25 states with approved social determinants of health provisions in their 1115 waivers—which may fall under the policies outlined in the April 10 letter—and another six states with pending waiver amendments. Providers, vendors, and community-based organizations operating in states with Section 1115 waivers may encounter significant revenue pressure as the funding for these services dries up. To the extent possible, alternate plans will be needed and the challenges will be substantial. Stakeholders potentially impacted should be aware of when their funding is slated to end; CMS states that the Center for Medicaid and CHIP Services (CMCS) will conduct direct outreach to states to confirm the end date for current DSHP or DSIP authority.
The Lobby Shop: CATO’s Scott Lincicome Returns to Talk Tariffs [Podcast]
CATO’s Scott Lincicome—one of the most informed and outspoken voices on trade and tariffs—returns to The Lobby Shop to unpack the Trump administration’s recent wave of tariff announcements. The group dives into the effectiveness of tariffs as a tool for reshoring manufacturing and addressing trade deficits, as well as the business community’s relatively muted response. Listen for an entertaining and insightful conversation with the always engaging Scott Lincicome!
New Illinois Labor and Employment–Related Laws Cover E-Verify, ‘Captive Audience Meetings,’ Noncompetition, AI, and More
The Illinois General Assembly had a busy year in 2024 drafting new legislation that was signed by Governor J.B. Pritzker and took effect on January 1, 2025. The following article summarizes important legal advancements in Illinois that every employer won’t want to miss.
Quick Hits
Illinois Governor Pritzker signed several new labor and employment–related laws into effect, such as “E-Verify Limits Under Right to Privacy in Workplace Act” and the “Worker Freedom of Speech Act.”
Amendments to current laws, such as the Illinois Human Rights Act, the Illinois Personnel Review Act, and the Illinois Wage Payment and Collections Act, expand the rights of employees.
Most notably, the statute of limitations for actions brought under the Illinois Human Rights Act was extended from 300 calendar days to two years after an alleged violation of the act.
New Illinois Employment Laws
Senate Bill 508 (SB 508), or the “E-Verify Limits Under Right to Privacy in the Workplace Act,” amends Illinois’s Right to Privacy in the Workplace Act and prohibits employers from imposing work authorization verification or reverification requirements greater than those required by federal law.
SB 508 also enacts greater responsibility for employers to provide employees with specific documentation when either (1) the employer contends there is a discrepancy in an employee’s employment verification; or (2) when an employer receives notice from a federal or state agency, such as the Social Security Administration, of a discrepancy as it relates to work authorization.
Additionally, SB 508 requires employers to provide a notice to each employee, by posting in English and any other language commonly used in the workplace, of any inspections of I-9 Employment Eligibility Verification forms within seventy-two hours after receiving notice of the inspection from a government agency. Further, SB 508 provides for civil penalties for noncompliance for failure to adhere to the notice provisions.
Senate Bill 3649 (SB 3649), or the “Worker Freedom of Speech Act,” prohibits an “employer, or an employer’s agent, representative, or designee, to either discharge, discipline, or otherwise penalize, or threaten to discharge, discipline, or otherwise penalize an employee (1) because an employee declines to attend or participate in an employer-sponsored meeting or declines to receive or listen to communications from the employer or the agent, representative, or designee … if the meeting or communication is to communicate the opinion of the employer about religious matters or political matters; (2) as a means of inducing an employee to attend or participate in meetings or receive or listen to communications” that express the opinion of the employer about religious matters or political matters; or (3) “because the employee, or another person acting on behalf of the employee, makes a good faith report of a violation or a suspected violation” of the Worker Freedom of Speech Act. This law effectively bans employers from holding mandatory meetings with employees concerning religious or political matters, including discussions on union representation.
Note the law excludes nonprofit and advocacy groups where such topics may be part of the job responsibilities.
SB 3649 provides a private right of action and for a class action by an employee on or behalf of themselves and other employees similarly situated. Within thirty days after the effective date of the act, employers shall post a notice of employee rights under the act where other public notices are generally posted.
Senate Bill 3646 (SB 3646), or the “Child Labor Law of 2024,” replaced Illinois’s existing child labor law. SB 3646 covers minors under sixteen years of age and prohibits minors thirteen years old and younger from being employed “in any occupation or at any work site” unless explicitly authorized by or exempted under the act. Exemptions for minors thirteen years old and younger include work on family farms or as a babysitter.
Under SB 3646, employers must obtain an employment certificate authorizing a minor’s work. To obtain a certificate, an employer must first provide the minor with a notice of intention to employ, which then must be submitted by the minor to their school’s issuing officer, along with an application for the employment certificate, which must be filled out by the minor and the minor’s parent or guardian. The law limits the hours that a minor may work each week, including setting a limit of no more than eighteen hours per week during the school year, and no more than forty hours per week when school is not in session, and each day with a limit of eight hours per day of work and school combined.
The Child Labor Law also identifies thirty categories of work minors may not perform, including factory work; construction; and work with lead, chemicals, dust, or gases dangerous to humans. Minors are also required to have a supervisor at least twenty-one years of age and thirty-minute lunch breaks during every five consecutive hours of work. Employers are also required to post a notice regarding the Child Labor Law in the workplace and report any workplace injuries to minors to the Illinois Workers’ Compensation Commission, the Illinois Department of Labor, and the minor’s school.
Expansion of Current Illinois Employment Laws
Senate Bill 3310 (SB 3310) amends the Illinois Human Rights Act to extend the date to file a charge of discrimination with the Illinois Human Rights Commission from 300 calendar days to two years for an alleged violation under the act.
Senate Bill 2737 (SB 2737) amends the Illinois Freedom to Work Act to prohibit noncompetition and nonsolicitation agreements for certain mental health professionals. This amendment prohibits these agreements for professionals licensed in Illinois “who provide mental health services to veterans and first responders.” “First responders” are defined as emergency medical services personnel as defined in the Emergency Medical Services (EMS) Systems Act, firefighters, and law enforcement officers. SB 2737 is not retrospective and will only apply to agreements entered into after January 1, 2025.
Senate Bill 3208 (SB 3208) amends the Illinois Wage Payment and Collection Act (IWPCA) to provide employees greater access to wage payment records. Upon request by a current or former employee, which an employer may require to be in writing, an employer must provide the employee with a copy of the employee’s pay stubs within twenty-one calendar days of the employee’s request. Such requests are limited to two times in a twelve-month period.
SB 3208 also requires employers to retain records of names, addresses, and wages paid to each employee and furnish each employee a pay stub for each period, which reflects the hours worked, gross wages earned, deductions from wages, and unused balance of paid time off available to the employee, amending the prior requirement of furnishing an itemized statement of deductions made from the employee’s wages for each pay period. Employers are now required to retain pay stubs for both current and former employees for at least three years after the date of payment. Additionally, if an employer retains pay stubs in a manner that is not accessible by former employees during the year after the separation of their employment, SB 3208 requires employers to offer to furnish a newly separated employee with all the employee’s pay stubs for the year prior to the date of separation.
SB 3208 adds a civil penalty of up to $500 per violation of failing to provide a current or former employee with his or her requested pay stubs or any other violation of the IWPCA.
House Bill 2161 (HB 2161) amends the Illinois Human Rights Act (IHRA) to prohibit discrimination based on an employee’s “family responsibilities,” which is defined as “an employee’s actual or perceived provision of care to a family member, whether in the past, present, or future.” In addition, HB 2161 provides that it is a violation of the IHRA for a person, or two or more persons, “to conspire to retaliate against a person because he or she has opposed that which he or she reasonably and in good faith believes to be discrimination based on family responsibilities.”
Importantly, HB 2161 provides that nothing in the IHRA obligates an employer, employment agency, or labor organization to make accommodations or modifications to reasonable workplace rules or policies for employees based on family responsibilities, such as accommodations or modifications related to leave, scheduling, productivity, attendance, absenteeism, timeliness, work performance, referrals from a labor union hiring hall, and benefits, as long as the employer’s rules and policies are in accordance with the IHRA.
House Bill 4867 (HB 4867) amends the Illinois Human Rights Act (IHRA) to prohibit discrimination based on “reproductive health decisions.” Under HB 4867, reproductive health decisions are defined as “a person’s decisions regarding the person’s use of contraception; fertility or sterilization care; assisted reproductive technologies; miscarriage management care; healthcare related to the continuation or termination of pregnancy; or prenatal, intranatal, or postnatal care.”
House Bill 3763 (HB 3763) amends the Illinois Personnel Record Review Act (IPRRA) and expands employees’ right to inspect and copy personnel-related documents. HB 3763 adds additional documents that an employer must provide an employee, after the employee’s request, to include documents used to determine an employee’s benefits, any employment-related contracts or agreements that the employer maintains are legally binding on the employee, any employee handbooks the employer made available to the employee or the employee acknowledged receiving; and any written employer policies or procedures the employer contends the employee was subject to and that concern qualifications for employment, promotion, transfer, compensation, benefits, discharge, or other disciplinary action.
HB 3763 adds the requirement that an employee’s written request to inspect, copy, and receive copies of personnel-related records must be “made to a person responsible for maintaining the employer’s personnel records, including the employer’s human resources department, payroll department, the employee’s supervisor or department manager, or to an individual as provided in the employer’s written policy.” Similarly, HB 3763 adds the requirement that an employee’s written request must (1) identify which personnel records the employee is requesting or if the employee is requesting all records allowed to be requested under the IPRRA; (2) “specify if the employee is requesting to inspect, copy, or receive copies of the records”; (3) “specify whether records be provided in hardcopy or in a reasonable and commercially available electronic format”; (4) “specify whether inspection, copying, or receipt of copies will be performed by that employee’s representative, including family members, lawyers, union stewards, other union officials, or translators”; and (5) “if the records being requested include medical information and medical records, include a signed waiver to release medical information and medical records to that employee’s specific representative.”
HB 3763 also prohibits employers from imputing the cost of time spent duplicating the information, the purchase or rental of copying machines, the purchase or rental of computer equipment, the purchase, rental, or licensing of software, or other similar expenses to the requesting employee.
House Bill 3773 (HB 3773) amends the Illinois Human Rights Act (IHRA) to expressly prohibit the use of artificial intelligence (AI) in a manner that results in illegal discrimination in employment decisions and employee recruitment as defined under state law. HB 3773 prohibits the use of artificial intelligence by an employer in Illinois that has the effect of subjecting employees to unlawful discrimination based upon legally protected classes, “[w]ith respect to recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or the terms, privileges, or conditions of employment.” Furthermore, HB 3773 mandates that employers must notify employees when using artificial intelligence for any of the purposes described above. HB 3773 does not go into effect until January 1, 2026.
House Bill 5561 (HB 5561) amends the Illinois Whistleblower Act (IWA) to expand liability for employers. HB 5561 amends the definition of covered “employers” and “employees” under the Act. Further, HB 5561 provides that an employer is prohibited from taking retaliatory action, or threatening to take retaliatory action, “against an employee who discloses or threatens to disclose to a public body conducting an investigation, or in a court, an administrative hearing, or any other proceeding initiated by a public body, information relating to an activity, policy, or practice of the employer where the employee has a good faith belief that the activity, policy, or practice” either (1) violates a federal, state, or local law; or (2) “poses a substantial and specific danger to employees, public health, or safety.”
HB 5561 adds additional damages and penalties for employers found in violation of the IWA, including permanent or preliminary injunctive relief and liquidated damages up to $10,000. HB 5561 provides that the terms of this amendment only apply to claims arising or complaints filed on or after January 1, 2025.
House Bill 3129 (HB 3129) amends the Equal Pay Act of 2003 and requires employers to include the pay scale and benefits for a position in any job posting (or disclose this information when requested by an applicant). HB 3129 defines pay scale and benefits as “the wage or salary, or the wage or salary range, and a general description of the benefits and other compensation, including, but not limited to, bonuses, stock options, or other incentives the employer reasonably expects in good faith to offer for the position, set by reference to any applicable pay scale, the previously determined range for the position, the actual range of others currently holding equivalent positions, or the budgeted amount for the position, as applicable.”
Key Takeaways
Employers may want to evaluate their existing employment practices and determine if any new laws will require revisions in their company policies or practices.
Insurance Cybersecurity Certifications: An (Updated) State Roundup
Over half of US states require annual compliance certifications from insurance providers. While the filing time frames for this year draw to a close, companies may want to keep them in mind not only for next year, but as a reminder of the information security programs that are expected to be in place.
When we last wrote about this, in 2021, only nine states (Alabama, Delaware, Louisiana, Michigan, Mississippi, New Hampshire, Ohio, South Carolina, and Virginia) had adopted certification obligations. Since then, 17 more states have followed suit, adopting the Insurance Data Security Model law (from which the obligations stem). These states are Alaska, Connecticut, Hawaii, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Minnesota, North Dakota, Oklahoma, Pennsylvania, Rhode Island, Tennessee, Vermont, and Wisconsin. Additionally, while New York has not adopted the NAIC model law, it imposes a similar annual filing requirement.
Filing deadlines are set out below:
Deadline
States
February 15
Alabama, Alaska, Delaware, Kentucky, Louisiana, Michigan, Mississippi, Ohio, South Carolina, Virginia
March 1
New Hampshire, Wisconsin
March 31
Hawaii
April 15
Connecticut, Illinois, Indiana, Iowa, Maine, Maryland, Minnesota, New York, North Dakota, Oklahoma, Pennsylvania, Rhode Island, Tennessee, Vermont
Those who might need to certify are those registered under the various state insurance laws. This includes insurance companies and insurance professionals, like agents and brokers. When making their filing, covered entities must certify that they have an Information Security Program in place. That program must include risk management and incident response procedures, as well as board oversight. Certification records and supporting materials need to be retained for five years after submission.
Putting it Into Practice: Those with insurance certification obligations should keep in mind the varying filing deadlines, as well as the accompanying obligations like having a compliant information security program in place.
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James O’Reilly also contributed to this article.
Old North State Report – April 14, 2025
UPCOMING EVENTS
April 14, 2025
Raleigh Chamber Business After Hours – Raleigh
April 16, 2025
Federalist Society Housing Policy and Regulation in NC – Raleigh
April 17, 2025
NC Chamber Building NC – Durham
April 22, 2025
NC Chamber Spring Member Roundtable – Asheville
April 24, 2025
Raleigh Chamber Young Professionals Network Social – Raleigh
RTAC – Association of Corporate Counsel Spring Reception – (Raleigh)
April 28, 2025
Thinkers Lunch: Rob Christensen
LEGISLATIVE NEWS
SENATE BUDGET TO BE RELEASED NEXT WEEK
The Senate is set to release its budget bill Monday afternoon, according to Republican Senate leader Phil Berger (R-Rockingham), who spoke to reporters after the Senate session on Tuesday evening.
This budget is a two-year spending plan that will likely exceed $30 billion, funding raises for state employees and teachers, and replenish the rainy-day fund to get back to the $4.75 billion it contained before Hurricane Helene.
Leadership in the House and the Senate have agreed the budget can grow by 2.75% in fiscal 2025-2026 and 2.25% above that in fiscal 2026-2027. The current budget appropriated $29.7 billion for general fund spending in fiscal 2023-2024 and $30.8 billion in fiscal 2024-2025.
The process begins with the Senate version going through committees on Tuesday, with floor votes on Wednesday and Thursday. The House is expected to pass its version in May, followed by negotiations among Republican leaders for a final budget.
Read more by Under the Dome/The News & Observer
LAST-MINUTE HOUSE PROPOSALS FILED AHEAD OF BILL FILING DEADLINE
Offering on-site childcare for state employees, allowing private school students to take classes at local public schools, addressing issues with loose dogs, and dealing with slow drivers in the left lane are among the last-minute proposals filed by House members before the Thursday deadline. House lawmakers had a deadline to file bills by 3 p.m., resulting in more than 100 new proposals. This brings the total number of bills introduced this session to nearly 2,000, reflecting emerging policy goals.
Education and public safety were key themes among the last-minute bills, with many aimed at attracting and keeping teachers. There were also efforts to increase penalties for loose dogs and new rules for domestic violence cases. A unique proposal allows tax payments in cryptocurrencies, amid fluctuations in the market. Some proposals from Democrats, like those focusing on environmental issues, may not succeed in the Republican-majority legislature, though a few may have potential.
Bipartisan sponsors back some bills, including Jesse’s Law, which would provide training for judges and mediators on recognizing signs of domestic violence and child abuse. This initiative is inspired by the tragic murder of a 3-year-old boy.
Other important bills include reforms to liquor laws to allow Sunday openings for ABC stores, legalizing video poker, creating a disaster response fund, and increasing penalties for various public safety violations. Additional initiatives aim to expand childcare options, support social conservative causes like restrictions on gender-reassignment lawsuits and abortion, and enhance educational transparency and teaching standards. There are also bills addressing drug arrests, protecting teenagers’ social media data, exploring cryptocurrency and AI research, directing the Legislative Research Commission to study the abolition of contributory negligence, and proposing the removal of barriers to employment due to court debt.
The crossover deadline, the date set by the legislature for a bill to be approved in its originating chamber to continue being reviewed by the opposite chamber, is May 8. Lawmakers are anticipated to increase their activity in the weeks ahead to make certain that any important legislation stays eligible for consideration during this session.
Read more WRAL News
PROPOSED HOUSE BILL TO EXPAND AUDITOR’S INVESTIGATIVE POWERS
A North Carolina House panel approved a bill on Tuesday that expands the investigative powers of the state auditor’s office, despite some concerns about which agencies and individuals could be investigated. The Judiciary 1 Committee voted for House Bill 549 after hearing from its sponsor, Representative Brenden Jones (R-Columbus), and Kirk O’Steen, the Director of Government Affairs for the auditor’s office. The bill will next go to the Committee on State and Local Government for further consideration.
If passed, the bill would allow the auditor to investigate any entity receiving state or federal funds for reports of improper activities, including fraud and misappropriation. It would also grant the auditor unrestricted access to necessary databases and exempt the office from certain regulations. Additionally, the Senate approved Senate Bill 474 to create a new team to oversee state spending and job openings.
Read more by NC Newsline (Kingdollar)
Read more by NC Newsline (Bacharier)
SENATE’S PBM BILL APPROVED BY HEALTH CARE COMMITTEE
The Senate is entering the debate over pharmacy benefits managers (PBMs) with the approval of Senate Bill 479 by the Health Care Committee. This bill provides an alternative to the House’s approach regarding PBMs, which act as intermediaries between drug manufacturers and insurers or drugstores. Unlike the House’s proposal, Senate Bill 479 does not include a provision that would require PBMs to pay drugstores a $10.24 dispensing fee. Senator Benton Sawrey (R-Johnston), a lead sponsor of the bill known as the SCRIPT Act, prefers to avoid any cost increases for consumers.
The bill is supported by key Senate leaders, and it will undergo further revisions as it progresses through additional committees. Key aspects of the Senate bill include allowing insurers to offer higher reimbursements to drugstores in areas without pharmacies, licensing pharmacy services administrative organizations, and requiring PBMs to provide more data to state officials. It also prohibits PBMs from paying pharmacies less than their acquisition costs for medications and from treating independent pharmacies unfairly compared to their owned drugstores. Independent pharmacies could refer patients to other drugstores if necessary.
The bill does not currently impact the State Health Plan, a point of concern for some senators. Meanwhile, the House’s PBM legislation remains under discussion in committee, with its previous iteration receiving unanimous approval before being stalled in the Senate without a counterproposal.
Business North Carolina (Ray Gronberg – [email protected])
LOWER LEGAL ALCOHOL LIMIT FOR DRIVERS PROPOSED
North Carolina lawmakers are collaborating to support a bill introduced this year to reduce the legal blood alcohol concentration limit for driving from 0.08 to 0.05.
House Bill 108 will also increase penalties for adults who help minors buy alcohol, particularly in cases of serious injury, and will allow repeat offenders to regain limited driving privileges by proving sobriety. Additionally, the measure mandates the recording of district court proceedings and public reporting on impaired-driving cases.
Representative Eric Ager (D-Buncombe) will hold a press conference on Tuesday at noon regarding the bill, joined by Ellen Pitt from the WNC Regional DWI Task Force, law enforcement, and families impacted by drunk driving.
Ager and Representative Mike Clampitt (R-Jackson) are the primary sponsors, along with Representatives Keith Kidwell (R-Beaufort) and Brian Echevarria (R-Cabarrus). The bill is currently in the House Alcoholic Beverage Control Committee.
Read more by Under the Dome/The News & Observer
TRAUMATIC BRAIN INJURIES TREATMENT FOR VETERANS
A bill that would enable treatment of traumatic brain injuries in veterans was introduced on March 27. House Bill 572 allows the Department of Military and Veterans Affairs to create a pilot program for veterans, first responders, and their immediate families to treat traumatic brain injuries as well as sleep disorders and substance abuse.
Representative David Willis (R-Union), mentioned that the treatment called eTMS, or electroencephalogram combined transcranial magnetic stimulation, was suggested by veterans seeking similar programs in other states. Willis noted that the program aims to support both first responders and veterans, citing successful outcomes in other states.
Representative Grant Campbell (R-Cabarrus), a former Army Lieutenant Colonel, also endorsed the bill. “There is significant data to show that there are high rates of these patients being able to discontinue current chronic therapy once they undergo this. This is an incredibly promising intervention,” Campbell said.
On Tuesday, the bill received a favorable report and has been referred to the Health Committee.
Read more by State Affairs Pro
Congress Reintroduces the NO FAKES Act with Broader Industry Support
Congress has reintroduced the Nurture Originals, Foster Art, and Keep Entertainment Safe (NO FAKES) Act— a bipartisan bill designed to establish a federal framework to protect individuals’ right of publicity. As previously reported, the NO FAKES Act was introduced in 2024 to create a private right of action addressing the rise of unauthorized deepfakes and digital replicas—especially those misusing voice and likeness without consent. While the original bill failed to gain traction in a crowded legislative calendar, growing concerns over generative AI misuse and newfound support from key tech and entertainment stakeholders have revitalized the bill’s momentum.
What’s New in the Expanded Bill?
The revised bill reflects months of industry negotiations. Key updates include:
Subpoena Power for Rights holders: The revised bill includes a new right to compel online services, via court-issued subpoenas, to disclose identifying information of alleged infringers, potentially streamlining enforcement efforts and unmasking anonymous violators.
Clarified Safe Harbors: Both versions of the bill include safe harbor protections for online services that proactively comply with notice and take-down procedures, a framework analogous to the protections afforded to online service providers under the Digital Millenium Copyright Act (DMCA). The revised bill introduces new eligibility requirements for these protections, including the implementation of policies for terminating accounts of repeat violators.
Digital Fingerprinting Requirement: In addition to removing offending digital replicas following takedown requests, the revised bill requires that online services use digital fingerprinting technologies (e.g., a cryptographic hash or equivalent identifier) to prevent future uploads of the same unauthorized material.
Broader Definition of “Online Service”: The revised bill broadens the scope of the definition to explicitly include search engines, advertising services/networks, e-commerce platforms, and cloud storage providers, provided they register a designated agent with the Copyright Office. This expansion further ensures that liability extends beyond just the creators of deepfake technologies to also include platforms that host or disseminate unauthorized digital replicas.
Tiered Penalties for Non-compliance: The revised bill introduces a tiered structure for civil penalties, establishing enhanced fines for online services that fail to undertake good faith efforts to comply ranging from $5,000 per violation, up to $750,000 per work.
No Duty to Monitor: Unlike the prior version, the revised bill explicitly states that online services are not required to proactively monitor for infringing content, acknowledging the practical limitations and resource constraints of such monitoring. Instead, the responsibility is triggered upon receipt of a valid takedown notice, after which the online service must act promptly to remove or disable access to the unauthorized material to maintain safe harbor protections. This approach mirrors the notice-and-takedown framework established under the DMCA.
If enacted, the NO FAKES Act would establish nationwide protections for artists, public figures, and private individuals against unauthorized use of their likenesses or voices in deepfakes and other synthetic media. Notably, the revised bill has garnered broad consensus among stakeholders, including the major record labels, SAG-AFTRA, Google, and OpenAI.
While the bill seeks to create clearer legal boundaries in an era of rapidly evolving technology, stakeholders remain engaged in ongoing discussions about how best to balance the protection of individual rights with the imperative to foster technological innovation and safeguard First Amendment-protected expression. As the legislative process unfolds, debate will likely center on whether the bill’s framework can effectively address the complex legal and operational challenges posed by generative AI, while offering enforceable and practical guidance to the platforms that host and disseminate such content.
Importantly, the NO FAKES Act aims to resolve the challenges posed by the current patchwork of state right of publicity laws, which vary widely in scope and enforcement. This fragmented approach has often proven inefficient and ineffective in addressing inherently borderless digital issues like deepfakes and synthetic content. By establishing a consistent federal standard, the NO FAKES Act could provide greater legal clarity, streamline compliance for online platforms, and enhance protections for individuals across jurisdictions.
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