Sexual Harassment Lawsuit Cannot Be Compelled To Arbitration
Casey v. Superior Court, 108 Cal. App. 5th 575 (2025)
Kristin Casey, a former employee of D.R. Horton, Inc., sued the company and one of its employees, Kris Hansen, for sexual harassment, sex discrimination, retaliation and failure to prevent discrimination and harassment in September 2023. D.R. Horton attempted to enforce an arbitration agreement in Casey’s employment contract, which included a choice-of-law provision applying California law. Casey opposed arbitration, arguing that the federal Ending Forced Arbitration Act (the EFAA) gave her the right to pursue her claims in court.
The EFAA, enacted in 2022, provides that a “person alleging conduct constituting a sexual harassment dispute” may elect that “no predispute arbitration agreement . . . shall be valid or enforceable with respect to the case filed under federal, tribal or state law and relates to the sexual harassment dispute.” The trial court upheld the arbitration agreement, enforcing the terms to which Casey had agreed. But on a writ petition, the Court of Appeal reversed, holding that the EFAA preempts state law so long as the employment relationship involves interstate commerce (a low hurdle). The court further determined that an employer cannot rely on a choice-of-law clause to avoid the effect of the EFAA.
$2.16 Million Defamation Verdict Is Voided On Appeal
Hearn v. Pacific Gas & Elec. Co., 108 Cal. App. 5th 301 (2025)
In this case, the Court of Appeal reaffirmed the principle that an employee’s tort claim is not separately actionable against an employer when it is premised upon the same conduct that gave rise to the termination of employment and where the damages sought are solely related to the loss of employment. The Court relied upon case law going back as far as Foley v. Interactive Data Corp., 47 Cal. 3d 654 (1988), which delineates the ability of an employee to recover tort damages.
Todd Hearn went to trial on claims for (1) retaliation in violation of section 1102.5 of the California Labor Code and (2) defamation. Hearn’s former employer (PG&E) terminated Hearn based on findings from an investigation into various violations of the employee code of conduct. At trial, the jury found against Hearn on the retaliation claim but found in his favor on the defamation claim, awarding him $2.16 million in compensatory damages. The jury specifically found that the investigative report that resulted in Hearn’s termination was the source of the purportedly defamatory statements. PG&E moved for JNOV on the ground that Hearn had conceded that his damages for the alleged defamation were simply his termination-related damages – i.e., that he had suffered no distinct reputational harm or other damages specifically attributable to the allegedly defamatory conduct. The trial court denied PG&E’s JNOV motion.
In a 2-to-1 ruling, the Court of Appeal reversed the trial court’s judgment entered in Hearn’s favor on the defamation cause of action, agreeing with PG&E that Hearn could not pursue a tort claim against PG&E based on the same conduct and seeking no distinct damages from his unsuccessful wrongful termination claim. In so ruling, the Court reaffirmed the long‑standing principle against an employee bringing a duplicative tort claim against an employer which is simply a wrongful termination claim by another name.
USPS Employee’s Hostile Work Environment Claim Can Proceed
Lui v. DeJoy, 129 F.4th 770 (9th Cir. 2025)
Dawn Lui, the former postmaster of the United States Post Office in Shelton, Washington, alleged she was targeted because of her race, sex and national origin. Lui alleged disparate treatment and retaliation in violation of Title VII. The district court granted summary judgment to the Postmaster General, but the Ninth Circuit reversed in part, holding that Lui’s disparate treatment claim should not have been dismissed. The Court concluded that Lui had satisfied the McDonnell Douglas test for establishing a prima facie case by showing she was removed from her position as Postmaster, demoted and replaced by a white man. The Court further held that there is a genuine dispute of material fact about whether the decisionmaker’s decision to demote Lui was independent or influenced by a biased subordinate and that Lui had properly exhausted her administrative remedies. As for Lui’s claim of retaliation, the Court affirmed summary judgment on the ground that Lui failed to establish a causal connection between any protected conduct and the demotion decision.
Another Court Blocks DEI-Related Certification Requirement
On March 27, 2025, U.S. District Judge Matthew Kennelly of the United States District Court for the Northern District of Illinois issued a temporary restraining order (TRO) prohibiting the Department of Labor (DOL) from enforcing certain provisions of Executive Orders 14173 (Ending Illegal Discrimination and Restoring Merit-Based Opportunity) and 14151 (Ending Radical and Wasteful Government DEI Programs and Preferencing) against Chicago Women in Trades (CWIT), a domestic nonprofit that receives federal funding from the DOL. The court found that Executive Order (EO) 14173’s certification provision, which sought to require CWIT to certify that it does not operate any programs “promoting DEI that violate any applicable Federal anti-discrimination laws,” is problematic because the EO does not define what constitutes “illegal” DEI activities, and that the CWIT is likely to succeed on the merits of their claim that the certification provision violates the First Amendment of the U.S. Constitution. The court precluded the federal government from initiating any False Claim Act enforcement action against CWIT pursuant to the certification provision.[1]
Furthermore, the court determined that the federal government’s enforcement of its policy through EO 14151’s “termination provision,” which — as relevant to the court’s TRO — orders the government to “terminate, to the maximum extent allowed by law . . . all ‘equity action plans,’ ‘equity’ actions, initiatives, or programs, ‘equity-related’ grants or contracts” would cause irreparable harm to CWIT.
While the court’s ruling on EO 14151’s termination provision applies only to CWIT, its ruling on EO 14173’s certification provision extended to all grants and contracts controlled by the DOL, stating that the DOL “shall not require any grantee or contractor to make any ‘certification’ or other representation” contemplated by the provision. The TRO does not extend to other federal agencies.
The TRO will remain in effect for 28 days, and a hearing is scheduled for April 10, 2025, to determine whether the TRO should be converted into a preliminary injunction.
Compliance Obligations Under EOs 14151 and 14173
As previously reported, President Trump signed EO 14151 and EO 14173 on January 20 and 21, 2025, revoking various earlier executive orders, including EO 13985 (a Biden administration executive order requiring federal agencies submit “Equity Action Plans”) and EO 11246 (a longstanding executive order that required certain federal contractors to maintain affirmative action plans). As we noted articles published on February 24 and March 17, the courts have been asked to address the EO’s application and implications to various employers and businesses.
Of particular concern has been the language in EO 14173 requiring contracts and grants to include a term that “compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions for the purpose of section 3729(b)(4) of title 31, United States Code” (the False Claims Act)” as well as requiring contractors and grant recipients “to certify, that [they do] not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.”
Consistent with the requirements of EO 14173, some government agencies have begun to issue DEI self-certification forms to contractors and grant recipients to complete and return.
Compliance Implications
Organizations that contract with or seek to contract with the federal government should take proactive steps to ensure compliance with EO 14173 and EO 14151. This includes conducting risk assessments to identify potentially noncompliant DEI or DEIA policies. Organizations should also review and update internal training programs to reflect current obligations under the civil False Claims Act, ensuring training is tailored to relevant operational roles.
[1] This reporting adds to our previous article published on April 3, 2024.
Appeals Court Says Disability Not Required in Order to Recover Back Pay for Violation of ADA’s Medical Inquiry and Examination Provisions
Most employers are aware that, under the Americans with Disabilities Act (ADA), disability-related inquiries and medical examinations of employees may only be required when such inquiries and examinations are “job-related and consistent with business necessity.” However, employers may be less familiar with the fact that the ADA’s limitations on medical inquiries and examinations apply to both employees with a disability and employees without a disability. Indeed, a recent appeals court decision highlights the fact that employers may be liable for monetary damages and other relief for violating the ADA’s medical inquiry and examination limitations, even if the employee subjected to the medical inquiry or examination does not have a disability or perceived disability.
In Nawara v. Cook County, John Nawara, a correctional officer for the Cook County Sheriff’s Office, was involved in multiple heated interactions with his supervisor, Human Resources, and an occupational nurse. Based on these incidents, the Sheriff’s Office placed Nawara on paid leave and required him to provide signed medical authorization forms and undergo a fitness-for-duty examination before returning to work. Nawara refused to submit the requested medical authorization forms and, as a result, was eventually transitioned to unpaid leave.
While on leave, Nawara filed suit alleging that the Sheriff’s Office had violated the ADA’s restrictions on medical inquiries and examinations for employees. After a trial, the jury concluded that the Sheriff’s Office’s requests for Nawara’s medical records and fitness-for-duty examination requirement violated the ADA, but it chose not to award any damages to Nawara. Nawara then asked the trial court to order the Sheriff’s Office to pay him back pay and restore his seniority. The trial court granted Nawara’s request to restore his seniority but denied his request for back pay, concluding that Nawara was required to have a disability or perceived disability in order to obtain back pay for a violation of the ADA’s medical inquiry and examination provisions. Both parties appealed the trial court’s decision.
On appeal, the U.S. Court of Appeals for the Seventh Circuit (which covers Illinois, Indiana, and Wisconsin) noted that, during trial, Nawara had never claimed that he was disabled or that the Sheriff’s Office perceived him to be disabled. Nevertheless, the Seventh Circuit concluded that an employer’s violation of the ADA’s medical inquiry and examination provisions is discrimination on the basis of disability regardless of whether the employee has a disability or perceived disability. Consequently, the Seventh Circuit found that the ADA’s remedies applied to Nawara, and Nawara was authorized to recover back pay and have his seniority restored.
The Nawara case serves as a reminder that situations involving mandatory medical inquiries or examinations for employees are complex and are often difficult for employers to navigate. Employers with questions regarding the permissibility of medical inquiries or examinations should consult with experienced employment counsel before requiring an employee to provide medical information or submit to a medical examination to ensure that such actions do not violate the ADA.
BREAKING: Full D.C. Circuit Restores Status Quo Ante, for a Second Time, at the NLRB
As the firing carousel continues, on April 7, 2025, the full United States District Court of Appeals for the D.C. Circuit vacated the panel’s stay and ordered the reinstatement of National Labor Relations Board (“NLRB” or “Board”) Member Gwynne A. Wilcox. The Board has now regained a quorum for the second time and can resume ruling on pending appeals from ALJ decisions and address requests for review.
As reported here and here, this reinstatement follows (i) a D.C. federal judge’s March 6, 2025, reinstatement of Member Wilcox, after President Trump’s unprecedented firing; and (ii) a D.C. Circuit panel’s March 28, 2025, stay of Member Wilcox’s reinstatement, pending appeal.
The full D.C. Circuit split along appointed-party lines, with seven (7) Democrat-appointed judges making up the majority and four (4) Republican-appointed judges dissenting. The majority again relied upon Humphrey’s Executor v. United States, 295 U.S. 602 (1935), as well as Wiener v. United States, 357 U.S. 349 (1958), which the Court said “unanimously upheld removal restrictions for government officials on multimember adjudicatory boards.” While the Seila Law LLC v. Consumer Financial Protection Bureau, 591 U.S. 197 (2020), and Collins v. Yellen, 594 U.S. 220 (2021), decisions held removal certain restrictions to be unconstitutional as applied to two (2) specific agencies, the majority indicated that the Court was still required to follow “extant Supreme Court precedent unless and until that Court itself changes it or overturns it.” As neither Selia nor Collins expressly overturned Humphrey’s Executor or Wiener, the Court concluded that it was required to follow that extant precedent.
The Court further noted that it set a “highly expedited” schedule for resolution of the merits of the government’s appeals, which seemed intended to mitigate any potential harm from Member Wilcox’s reinstatement. That also might have advised the Court’s decision to deny a 7-day stay of Member Wilcox’s reinstatement for the government to seek relief from the Supreme Court. This issue nevertheless seems to be headed for the Supreme Court, which would be faced with the decision of whether to (i) prohibit Presidents from firing NLRB members; (ii) narrowly permit Presidents to fire NLRB Members; or (iii) overturn Humphrey’s Executor and Wiener to allow Presidents to fire any agency head(s), at will.
We will continue to monitor the Wilcox appeal and its continued impact upon the NLRB.
Virginia Strengthens Ban on Non-Competes for “Low-Wage Employees”
On March 24, 2025, Virginia Governor Glenn Younkin signed into law S.B. 1218, which amended Virginia’s non-compete law to expand the definition of “low-wage employees” with whom employers may not enter into non-competition agreements.
A “low-wage employee” previously was defined as any employee whose average weekly earnings fell below the Virginia average weekly wage. For 2025, this equated to $1,463 per week, or $76,081 annually. The amendment expands the definition of “low-wage employee” to include any employee who, regardless of their average weekly earnings, is entitled to overtime compensation under the federal Fair Labor Standards Act (“FLSA”) (for hours worked over 40 hours in a given week). The amendment will take effect on July 1, 2025.
The other provisions of Virginia’s non-compete statute, Virginia Code § 40.1-28.7:8, were not modified, and contain several noteworthy features. The statute provides a private right of action for low-wage employees against any employer who attempts to enforce a non-compete in violation of the statute, and if they prevail, the statute authorizes a court to award liquidated damages, lost compensation, and attorneys’ fees. Employers may also be subject to a civil penalty of $10,000 for each violation of the statute. Also, employers must post a copy of the statute or a summary approved by the Virginia Department of Labor and Industry alongside other federal or state required notices, or risk civil penalties.
Employers with employees in Virginia should revisit their non-competition agreements for compliance in light of the recent amendment.
CMS Confirms Relocation of Physician-Owned Hospital Does Not Jeopardize Stark Law Exception
CMS confirmed that a physician-owned hospital proposing to move eight miles away from its original site and add an emergency department would continue to meet the whole hospital exception, provided all other conditions remain met.
CMS emphasized that the hospital must remain the same legal and operational entity post-relocation, with no changes in ownership or Medicare provider agreement.
The decision reflects CMS’s continued scrutiny of, yet possibly softening stance towards, physician-owned hospitals and the structural safeguards in place to protect against self-referral risks.
The Centers for Medicare & Medicaid Services (CMS) recently released Advisory Opinion No. CMS-AO-2025-1, addressing whether a physician-owned hospital’s proposed full-site relocation and addition of an emergency department would jeopardize its ability to continue to rely on the Stark Law’s “whole hospital exception.” In the advisory opinion, CMS concluded that relocation, by itself, is not necessarily disqualifying — and that no single factor is dispositive. Instead, the agency took a holistic approach in assessing whether the hospital remained the same entity post-relocation for purposes of the exception.
By retaining the same ownership, provider agreement, licensure, services, name, patient base, and bed count, CMS concluded that the hospital would remain the “same hospital” under Stark requirements and continue to qualify under the “whole hospital exception”— enabling the hospital to retain its protection for physician referrals.
This Advisory Opinion — the first issued since 2021 — provides noteworthy guidance and important considerations for hospital administrators, compliance officers, and legal counsel of physician-owned hospitals currently taking advantage of the exception considering structural changes or expansions.
Background and Legal Analysis
The Stark Law “Whole Hospital Exception”
In 2010, the Affordable Care Act tightened Stark Law rules to prevent the creation of new physician-owned hospitals (with limited exceptions) and restrict the expansion of existing ones.
According to the CMS Advisory Opinion, the hospital at issue had met the Stark Law’s whole hospital exception before the 2010 cutoff by having physician ownership and a Medicare provider agreement in place. The hospital requested that CMS confirm it would still qualify as the “same hospital” and remain in compliance with the Stark Law exception, despite its plans to relocate eight miles away and to add an emergency department.
The Hospital’s Proposal: A Relocation Without Disruption
CMS took a holistic approach in its analysis and reviewed the hospital’s comprehensive certification of facts in light of factors previously outlined in its CY 2023 OPPS/ASC proposed rule and reaffirmed in the FY 2024 IPPS final rule, namely:
Continuity of state licensure and Medicare provider agreement;
Consistent use of Medicare provider number and tax ID;
Same services and patient base;
No changes to ownership or scope of services (with some flexibility, such as adding an emergency room);
Same state regulatory framework.
The hospital certified that it had maintained physician ownership and a Medicare provider agreement continuously since December 31, 2010; the aggregate number of operating rooms, procedure rooms, and beds had remained the same since March 23, 2010 (and would remain unchanged post-relocation); the hospital’s services and patient base would remain unchanged; the hospital would continue to operate under the same name, branding, and tax ID number; there would be no ownership or leadership changes; and the hospital would continue under the same Medicare provider agreement.
Additionally, the hospital certified that its state’s law did not require a certificate of need for new construction, but any structural changes required prior notice and approval from that state’s health department. The requesting hospital also affirmed that discussions with its state officials confirmed the facility could maintain its existing state licensure after relocation.
Based on the certifications and documentation provided by the hospital, CMS concluded that neither the relocation of the facility or the addition of an emergency department would run afoul of the Stark Law’s referral and billing prohibitions. Specifically, the hospital would continue to meet the condition at 42 C.F.R. § 411.362(b)(1) as set forth in Stark’s Whole Hospital Exception.
Five Key Considerations for Hospital Leadership
One of the leading takeaways from the advisory opinion is CMS’s emphasis on a hospital’s continuity in legal identity, services, structure, and ownership when making a “whole hospital exception” determination. But beyond its specific facts, the opinion also serves as an important reminder for hospital administrators, compliance officers, and legal counsel of physician-owned hospitals that even operational changes—like relocation or new departments—can trigger significant legal and regulatory scrutiny.
Here are five strategic considerations hospital leadership should keep in mind:
Maintain Continuity: Ensure Medicare provider agreements, tax IDs, and licensure remain uninterrupted during transitions.
Document Everything: Detailed certifications and planning are crucial for regulatory assurance.
Avoid Ownership Changes: Even minor shifts in physician ownership could threaten compliance with the Whole Hospital Exception.
Engage Regulators Early: Involve CMS and state departments of health well in advance of any move or structural change.
Seek Advisory Opinions: Where doubt exists, requesting a formal CMS advisory opinion can offer clarity and protection.
Recent and Emerging Employment Law Changes Impacting Australian Employers
Not long after intentionally underpaying employees became a criminal offence on 1 January 2025, additional workplace changes have been announced or made by the federal Labor government to further protect workers and stimulate productivity.
Code of Practice on Sexual and Gender-Based Harassment
The Work Health and Safety (Sexual and Gender-based Harassment) Code of Practice 2025 (Code), which applies to all workplaces covered by the Work Health and Safety Act 2011 (Cth) (WHS Act), commenced on 8 March 2025.
The Code:
Gives examples of what sexual and gender-based harassment might look like;
Addresses ‘good practice’ in relation to investigations concerning sexual or gender-based harassment; and
Outlines a four-step risk management process that employers should proactively use to eliminate or minimise the risk of sexual and gender-based harassment as far as is reasonably practicable.
While the Code is not law, it is admissible in court proceedings under the WHS Act and Work Health and Safety Regulations 2011 (Cth) and courts may look to the Code:
As evidence of what is known about a hazard, risk assessment or control measures; and
To determine what is reasonably practicable in the circumstances.
The Code recognises that sexual and gender-based harassment often occurs in conjunction with other psychosocial hazards and therefore the Code should be read and applied with the Work Health and Safety (Managing Psychosocial Hazards at Work) Code of Practice 2024.
Work-From-Home Term to be Added to Clerks Award
In August 2024, the Fair Work Commission commenced proceedings on its own initiative to develop a work-from-home term in the Clerks—Private Sector Award 2020 (Clerks Award). The term is intended to facilitate the making of practicable ‘working from home’ arrangements and to remove award impediments to such arrangements.
The Commission has identified various issues to be determined, such as how ‘working from home’ should be defined and how the term should interact with the right to disconnect. The term is likely to serve as a model for incorporation in other modern awards, and therefore any interested party is invited to participate in the proceedings (not just parties with an interest in the Clerks Award).
Interested parties originally had until Friday 28 March to file proposals for a working from home clause, as well as submissions and evidence. This has now been extended until a date to be determined at the directions hearing listed for 6 June 2025. In the meantime, the matter has been listed for a conference on 11 April 2025 to discuss the substantive issues that will arise in the matter.
Ban on Non-Competes
The Labor government announced in last week’s 2025-26 Federal Budget that it plans to introduce a ban on non-compete clauses for workers earning less than the high-income threshold under the Fair Work Act 2009 (currently AU$175,000). Importantly, for the purposes of the high-income threshold, ‘earnings’ do not include incentive-based payments, bonuses or superannuation contributions. The government is still considering exemptions, penalties and transition arrangements.
At this stage, the proposed ban is just in relation to clauses preventing or restricting workers moving to a competing employer or starting a competing business. However, the Government has indicated that it will further consider and consult on non-solicitation clauses for clients and co-workers and non-compete clauses for high-income workers. The government also plans to restrict ‘no-poach’ agreements, where businesses agree not to hire workers from certain other businesses.
If the ban becomes law, it would take effect from 2027 and operate prospectively. In the meantime, employers should consider reviewing their employment contracts to ensure that their confidential information, trade secrets and intellectual property clauses continue to protect their business in the event the proposed ban on non-compete clauses proceeds.
Employers should also consider reviewing current notice periods, to ensure they are calibrated to provide sufficient protection, having regard to the nature of an employee’s role (including their level of access to customers and confidential information).
Anti-Vilification Protections to Expand Beyond Race and Religion
On 2 April 2025, Victoria’s Labor Government ‘s Justice Legislation Amendment (Anti-vilification and Social Cohesion) Bill 2024 (Bill) was passed by the Legislative Council and will shortly pass the Legislative Assembly without further amendment.
Currently, Victorians are protected from vilification on the grounds of their race or religion under the Racial and Religious Tolerance Act 2001. The Bill repeals the Racial and Religious Tolerance Act 2001 and a new section ‘Prohibition of vilification’ will be inserted into the Equal Opportunity Act 2010.
Victorians will be protected from unlawful vilification based on a broader range of attributes:
Disability;
Gender identity;
Race;
Religious belief or activity;
Sex, sexual orientation or sex characteristics; or
Personal association (whether as a relative or otherwise) with a person who is identified by reference to any of the above attributes.
The test to be applied will be based on whether a ‘reasonable person with the protected attribute’ would consider the conduct hateful or severely ridiculing. Vilification may occur in any form of communication, including for example by posting a photo on social media that severely ridicules someone with a protected attribute.
Additionally, serious vilification offences, such as threatening physical harm, will be criminalised and be punishable by up to five years’ imprisonment.
Whilst this is limited to Victorian law, it is possible that other States and Territories may enact similar legislation.
Your Boss Is Not So Bad: At Least He Didn’t Spike the Coffee with Viagra
We’ve all had moments of frustration with our supervisors—whether it’s micromanaging, lack of communication, or forgetting to acknowledge hard work. But if you’ve recently muttered “my boss is the worst,” a recent case out of North Bergen, New Jersey might make you think twice.
According to shocking tort claims filed by multiple officers, the town’s police chief is alleged to have gone far beyond what anyone would consider typical workplace misconduct. The claims range from horrifying to absurd: defecating in department offices, spiking office coffee with Viagra and Adderall, and allegedly stabbing an officer’s genitals with a hypodermic needle. Yes, you read that correctly.
The officers involved also allege that the chief sent masturbation cream and a pride flag to an officer’s home (where it was seen by the officer’s family), exposed himself at work, and poisoned a fellow officer’s pet fish. One prank allegedly escalated to a health emergency when extremely hot peppers were placed in officers’ meals.
If these allegations are even partially true, they reflect not just poor leadership but an extreme and dangerous abuse of power. It’s the kind of misconduct that moves beyond civil liability into potential criminal consequences.
But what does this mean for everyday employees?
Too often, we dismiss or normalize workplace misconduct under the guise of “just a difficult boss.” We accept inappropriate behavior because we assume it’s part of the job or fear retaliation if we speak up. This case is an extreme reminder that inappropriate behavior, even when masked as humor or “pranks,” can create unsafe, hostile, and legally actionable work environments.
It’s also a lesson for employers: failing to act on complaints, or protecting high-level individuals despite credible allegations, can erode employee trust and open the door to serious liability.
The takeaway? If you’ve got a boss who’s a little disorganized, forgets your birthday, or occasionally sends a 7:00 a.m. email—count yourself lucky. A workplace led with professionalism, consistency, and respect should never be taken for granted.
And if you’re dealing with something that feels like more than just “difficult,” don’t shrug it off. There are legal protections for employees facing harassment, retaliation, or other forms of unlawful workplace conduct. Sometimes, your gut instinct is the best indicator that something isn’t right—and it’s worth talking to someone who knows the law.
Because as wild as this case may sound, there’s a spectrum of workplace misconduct—and you don’t have to wait until someone poisons your lunch or spikes your coffee to take it seriously.
Right to Work Compliance: Are UK Employers Keeping Up?
On Sunday, the government announced an extension of Right to Work (RTW) checks to businesses hiring gig economy and zero-hours workers, which we covered here. Just two days later, it released a report – an essential safeguard against illegal working.
Key Findings from the Report
Commissioned by the Home Office and conducted by Verian, the study surveyed 2,152 businesses across various industries in September 2024, with 30 follow-up interviews providing deeper insights. Here’s an overview of what it found:
High awareness, patchy understanding – While 89% of employers claim to be aware of RTW checks, far fewer understand exactly how to conduct them correctly. The biggest confusion? Rules around agency and zero-hours workers—no surprise given the recent law change!
Over-reliance on third parties – Some employers wrongly believe they can outsource RTW checks entirely. 81% of surveyed businesses using agency workers assumed recruitment agencies were responsible for conducting checks which is entirely understandable given that there is currently no legal obligation to conduct right to work checks on workers (only on employees).
Confusion over digital checks – Many employers aren’t keeping up with online verification. Despite all the available technology, 79% still rely primarily on manual methods. 37% of those surveyed use the Home Office online service and 23% use Identity Service Providers (IDSPs).
Compliance is inconsistent – Many businesses fail to check the right documents, exposing themselves to risk if audited.
Small businesses struggle the most – Larger firms with dedicated HR teams tend to have better compliance, whereas SMEs often lack the resources or expertise. Alarmingly, 62% of micro and small employers incorrectly believed a driving licence was a valid RTW document, compared to 42% of medium and large sponsors.
The Construction industry is at greater risk of non-compliance – Employers in construction showed the biggest knowledge gaps around acceptable RTW documents and re-checks. 41% of surveyed businesses in the sector believed illegal working was common.
Employers prioritise compliance but for different reasons – When asked why they conduct RTW checks, 91% cited preventing illegal working, 88% were focused on avoiding penalties (basically the same thing) and a very wholesome 87% said they were simply “doing the right thing”.
What’s at Stake?
Failing to meet RTW obligations can have serious consequences, including:
Fines of up to £60,000 per illegal worker (tripled from £20,000 in 2024).
Criminal liability for knowingly hiring workers who do not have the right to work (or having reasonable grounds to believe that is the case)
Reputational damage, including bad press and loss of contracts. Both public and private procurement functions are increasingly hot on this sort of thing.
Sponsorship licence risks—non-compliance could lead to licence revocation, forcing businesses to dismiss sponsored workers and preventing them from obtaining more.
How Can Employers Improve Compliance?
With the Home Office tightening enforcement, businesses need to take a proactive approach:
Review and update policies – Ensure internal HR teams understand the latest RTW check guidance and use digital verification tools correctly.
Train staff regularly – Many compliance failures result from human error. Providing ongoing training helps prevent costly mistakes.
Conduct audits – Regularly reviewing RTW records can help spot gaps and correct issues before a Home Office audit.
Use the right tech – Employers should use the Home Office’s online RTW service where applicable and ensure all checks follow the statutory excuse process.
Keep clear records – Retaining copies of RTW documents is essential for proving compliance.
The report makes it clear that while most UK employers fully intend to comply with RTW requirements, many fall short on execution. As penalties rise, businesses hiring zero-hours workers—particularly in construction, hospitality and healthcare—must ensure they fully understand RTW obligations. A small investment in compliance today could prevent huge financial and legal headaches down the line. Regrettably, it appears that the government has not taken this clear evidence that employers can fail to follow all the current regulations despite their best efforts to do so as a cue to simplify the relevant law, but instead as a reason to add further layers of complexity to it. Dumping the minefield which is worker status on top of the existing morass of rules can only end in tears before bedtime.
What is the Current Minimum Wage for Federal Contractors? (US)
Among the flurry of Executive Orders signed by President Trump since he took office is an March 14, 2025 Executive Order rescinding 18 prior executive orders and actions, including Executive Order 14026, a Biden-era order increasing the minimum wage for federal contractors to $17.75. Now that Executive Order 14026 has been rescinded, many federal contractors have been left wondering what the current minimum wage is for their employees.
Recent History on Federal Contractor Minimum Wage
The status of the federal contractor minimum wage has been in flux for some time. In 2014, President Obama issued Executive Order 13658, which provided for a $10.10 per hour federal contractor minimum wage that would subsequently increase on an annual basis for inflation. Years later, on April 27, 2021, President Biden signed Executive Order 14026, which increased the minimum wage for federal contractors to $15.00 per hour, to be adjusted periodically for inflation. Executive Order 14026 built upon the prior Obama-era order, but President Biden’s order provided broader coverage, higher thresholds and superseded the Obama-era order to the extent it was inconsistent with the provisions in President Biden’s order.
Shortly after President Biden issued Executive Order 14026, the U.S. Department of Labor (“DOL”) issued regulations implementing the order and the Federal Acquisition Regulatory Council amended the federal procurement regulations accordingly. Per the order and those regulations, as of January 1, 2025, the minimum wage for federal contractors under Executive Order 14026 was $17.75 per hour.
In recent years, Executive Order 14026 has been challenged in multiple courts, resulting in a split in authority regarding its validity. Specifically, the U.S. Court of Appeals for the Ninth Circuit held in November 2024 that President Biden lacked authority to issue the order. However, Executive Order 14026 was upheld by the Fifth and Tenth Circuits. In January 2025, the U.S. Supreme Court declined to address the split. Notably, since President Trump rescinded Executive Order 14026, on March 28, 2025, the Fifth Circuit vacated its previous ruling upholding it.
Where We Stand Today
Currently, the DOL rule implementing Executive Order 14026 remains on the DOL website, but the DOL has made clear that it will no longer enforce the now-rescinded order or the DOL regulations implementing it, and that the DOL intends to go through the regulatory process to officially effectuate its revocation.
Although President Biden’s order is no longer effective, President Trump’s March 14 Executive Order did not rescind the Obama-era Executive Order 13658. Accordingly, the lower minimum wage and narrower scope set forth in the 2014 order presumably remains in effect. As such, until the DOL provides more guidance, all indications are that the current federal contractor minimum wage is $13.30 per hour, under the terms of Executive Order 13658.
Until further regulatory action is taken, the rescission of Executive Order 14026 leaves some uncertainty about contractors’ obligations. Federal contractors with questions regarding their current obligations should consult with legal counsel to determine how they may be impacted by President Trump’s March 14 order. Further, contractors thinking about changing wages in response to Executive Order 14026’s rescission should review state wage law requirements and any collective bargaining agreements before doing so to ensure continued compliance with all other applicable requirements.