When ICE Knocks: Immigration Enforcement in the New Administration
Introduction
Since President Trump’s inauguration, the administration has underscored its commitment to prioritizing immigration enforcement. This shift includes an increase in U.S. Immigration and Customs Enforcement (“ICE”) raids and the rescission of previous policies that restricted federal immigration authorities from conducting enforcement actions in sensitive locations such as schools, churches, and hospitals. Given the new enforcement landscape, it is crucial for employers to be prepared for potential ICE raids or other immigration audits.
Preparing for an ICE Raid
An ICE raid is an unannounced operation conducted by ICE agents at businesses or homes to apprehend individuals suspected of violating federal immigration law. During a raid, ICE agents may question individuals present and detain or arrest specific persons. However, their authority to search private space is limited without a judicial warrant.
Specifically, ICE agents can enter public areas of a business, such as parking lots or lobbies, without restriction. However, they cannot access nonpublic areas without consent or a valid judicial warrant. In contrast, private spaces, such as a private home or office, are not generally accessible to the public and may even have signage indicating that they are intended to be private.
A judicial warrant, issued by a federal or state court and signed by a judge, specifies the search’s scope and location, which may include a private area. Employees must allow access to areas specified in the warrant but can refuse entry to nonpublic areas beyond the warrant’s authorizing scope.
In contrast, an administrative warrant, which is not issued by a judge, does not authorize ICE agents to enter private spaces without permission. It directs law enforcement to arrest or detain specific individuals suspected of immigration violations but does not impose a legal duty to comply with ICE demands.
If ICE agents present a warrant, company management should request a copy, verify its type and validity, and proceed accordingly. Legal counsel should be contacted immediately if there is any doubt about the warrant or its validity. It is also important not to interfere with ICE officers or impede their investigation in any way, as obstructing an investigation may result in significant criminal and civil sanctions.
To prepare for a potential enforcement action, employees should be trained on how to interact with ICE agents and who to contact if agents arrive. Employees should be counseled on their rights during an enforcement action. Employers should designate a point of contact knowledgeable about employers’ rights and trained to communicate with agents and legal counsel. Nonpublic areas should be clearly marked to delineate private spaces of a business from public areas.
Preparing for an I-9 Audit
With the heightened focus on immigration enforcement, an increase in I-9 audits and compliance investigations is anticipated. Federal law mandates that employers timely complete an I-9 form for each employee to verify employment eligibility. The Immigration Reform and Control Act of 1986 (“IRCA”) prohibits employing individuals unauthorized to work in the U.S. and requires employers to verify identity and employment authorization.
If the federal government initiates an I-9 audit, the employer will receive a notice of inspection (“NOI”) and generally will have three days to produce I-9 forms for review. If ICE determines that certain employees are unauthorized to work, the employer has ten days to provide valid work authorization for the employees, and if the employer is unable to do so the employees will need to be terminated. Affected employees must be notified of the audit findings.
To prepare for a potential I-9 audit, employers should ensure the use of the current Form I-9 and confirm all employees have proper work authorization. Conducting an internal audit with legal counsel can help identify non-compliance issues, allow for corrections to the I-9 forms, and demonstrate good faith if an NOI later is issued, which can help limit civil penalties against the employer. Contact legal counsel immediately upon receiving an I-9 NOI for guidance and compliance.
Conclusion
With the Trump administration’s focus on immigration enforcement, employers must be prepared for potential ICE actions including enforcement raids in their places of business.
Employer Guidance for Workplace Interactions with ICE
The new presidential administration’s efforts to prioritize immigration law enforcement has resulted in increased activity by U.S. Immigration and Customs Enforcement (ICE) and an uptick of questions from employers about how to handle ICE investigations. This Alert provides guidance to employers for potential interactions with or inspections by ICE at the workplace, including preliminary actions, suggested steps during an ICE visit (whether announced or unannounced), and follow-up recommendations.
There is a common misconception that only employers that specifically seek or intentionally hire unauthorized workers are at risk of a visit from ICE. However, there are multiple avenues by which a generally law-abiding employer may find itself unknowingly employing an unauthorized worker. For example, an individual may have presented the employer with fraudulent documentation for the Form I-9 employment eligibility verification, and the employer may not have realized the document was inauthentic. Or an employer may have lawfully hired a noncitizen with proper employment paperwork but later may forget to reverify the worker’s Form I-9; in this instance, the individual’s work authorization could lapse or expire without the employer noticing.
To the extent an employer’s office or work facility is private property, employers have certain legal rights when faced with an ICE arrival. Employers should become familiar with their rights and best practices in the event of an ICE visit to minimize the risk of inordinate disruption to the workforce or operations, or the unauthorized seizure of company property and information. Employers should seek to balance (1) lawful compliance and cooperation with (2) private property rights and a general duty of care for employees.
Babst Calland recognizes that the topics of immigration enforcement and undocumented persons have been politicized. We therefore offer this guidance objectively, without advocating for any particular position beyond what is legally required.
Recommended Precautionary Actions Before ICE Arrives
Designate Public and Private SpacesICE agents can only be present in areas open to the public (such as parking lots, reception areas, lobbies, etc.) without a judicial warrant or specific employer consent. Therefore, employers should clearly identify the boundaries of non-public areas with signs such as “Private” or “Non-Public Area” to avoid ambiguity. Once signs are posted, management should explain these “new” boundaries or designations to the workforce, with special emphasis on its explanation to security guards, receptionists, and other public-facing employees.
Understand the Types of Documents ICE Could PresentWith a few exceptions, ICE generally cannot lawfully search persons or private spaces, or seize persons or private property, without certain documentation.[1] As explained below, employers should ensure that key personnel are trained to identify and/or differentiate these documents.
A judicial warrant provides the broadest search and/or seizure rights. A judicial warrant can be either a search warrant or an arrest warrant. A judicial warrant must be signed and dated by a judge or magistrate and it must describe with particularity the place to be searched, and/or the person or items to be seized. A judicial warrant will have the name of a court at the top of the document. Only a valid judicial warrant permits an ICE agent to enter private/non-public spaces at the workplace, and only a valid judicial warrant requires cooperation. Employers must strictly comply with judicial warrants, but it is not required to take any action to assist ICE beyond what is reasonably required by the judicial warrant. For example, an employer can be required to move an employee identified in the warrant into a contained area for questioning, but it cannot be required to sort employees into groups by citizenship status or nationality for an inspection by ICE.
An administrative warrant is much more limited than a judicial warrant. An administrative warrant is signed by an immigration officer, and it allows ICE to arrest noncitizens suspected of committing immigration violations. An administrative warrant is typically identified as a document issued by the “Department of Homeland Security” and is usually on a Form I-200 or I-205. Notably, an administrative warrant does not give an ICE agent the right to enter private/non-public spaces at the facility unless the employer consents.[2] Additionally, when faced with an administrative warrant, an employer is not required to tell ICE whether the employee named in the warrant is currently working or to bring the employee to the agent (or vice versa).
Alternatively, ICE could present an employer with a subpoena, a notice of inspection, or a notice to appear. A subpoena is a written request for information or documents that provides a certain time limit to respond and does not require immediate compliance. Like a subpoena, a notice of inspection is a document informing an employer that it must produce employees’ I-9 Forms for an audit[3] within 3 business days. A notice to appear is a document directed to an individual instructing them to appear before an immigration judge.
Assign an On-Site Response CoordinatorEmployers should assign a particular managerial or supervisory employee at each facility to be the on-site response coordinator who can serve as a single point of contact with ICE in the event that ICE arrives, as well as a back-up coordinator if the designated worker is absent or unavailable. These personnel should be trained to differentiate between the above-described documents, and to understand and be aligned with the employer’s policy for lawful compliance with visits from ICE.
Review Applicable Collective Bargaining AgreementsFor any locations that have a unionized workforce, employers should review the applicable collective bargaining agreements (CBAs) proactively to determine whether they require any additional conduct by the employer in the event of an ICE visit. For example, some CBAs might include provisions that give the union the right to be present during any ICE inspections or on-site employee interviews, or require that the employer notify all union employees when ICE agents arrive. Any additional CBA requirements should be implemented with the below recommended actions for facilities with unionized employees.
Recommended Actions If ICE Arrives
*All recommended actions below should be conducted in a calm, professional, and polite manner to prevent escalation of the interaction.*
Notify key personnel – The first steps are to immediately notify the facility supervisor, the on-site response coordinator(s), and legal counsel. Ask the agents to wait in a specific space or designated location until either a supervisor, on-site response coordinator, or legal counsel arrives to prevent disruption.
Verify agent identify – The response coordinator should clarify whether the agents are police officers or ICE agents and request their names and badge numbers.
Verify agent purpose – The response coordinator should ask the agents about the nature of their visit. Common purposes include:
Initiation of Form I-9 Audit – If ICE intends to audit a company’s Form I-9 compliance, ICE must first provide the employer with a Notice of Inspection. These notices give employers at least 3 business days to produce the requested I-9 Forms.[4] Additional productions and procedures will ensue if ICE determines that there are any Form I-9 errors, suspicious documents, or discrepancies, and employers should consult with an immigration attorney for further guidance if this occurs.
Facility Search or “Raid” – ICE can arrive without warning to investigate an employer.
Detention of specific person(s) – ICE can arrive without warning to detain specific person(s).
Fraud Detection and National Security (FDNS) visit – this is an unannounced visit related to an employer’s recent immigration petition(s) where ICE agents conduct compliance reviews to ensure the employer is complying with the terms and conditions of the petition(s). This guidance does not address such visits, as FDNS visits are only relevant for employers who have had an H-1B or L-1 intracompany transfer petition(s) adjudicated.
Verify documentation – The response coordinator should ask to see a warrant.
If a judicial warrant is provided, employers should analyze it to determine its scope and ask for a copy of it. Employers are not required to provide access to any area not specified in the warrant.
If a judicial warrant is not provided, the response coordinator can (but is not required to) state: “I’m sorry, but this is private property. It is company policy not to provide consent or permission to enter private or non-public areas of the facility or to access our information or records without a valid warrant signed by a judge.”
If there is an issue with the judicial warrant (i.e. it is not signed, not dated, is missing the correct workplace address, or does not sufficiently describe the premises to be searched or items to be searched for), an employer can accept the warrant but should note its objection so that counsel can challenge the search or seizure later if sufficient grounds exist. To be clear, in this instance, the search or seizure will still occur.
Ask to be provided with a list of any items seized during the search.
If an administrative warrant is provided, the response coordinator can (but is not required to) state: “I’m sorry, but this is private property. It is company policy not to provide consent or permission to enter private or non-public areas of the facility or to access our information or records without a valid warrant signed by a judge.”
Use independent judgment if considering voluntary consent.
Employers can decide to voluntarily consent to a search or seizure of employer property by ICE without a sufficient warrant. Moreover, ICE agents are permitted to make statements intended to encourage voluntary consent or to imply that giving consent is required even in circumstances where it is not (such as when the agents do not possess a judicial warrant).
If considering consenting to a search or seizure without a sufficient warrant, employers should use independent judgment to evaluate the totality of the circumstances in addition to any statements made by the agents.
Please note that non-management or non-supervisory employees do not have the authority to act on behalf of an employer to give such consent.
Be respectful, but clear, if exercising the company’s rights.
Never attempt to block an ICE agent’s movements. If an employer believes ICE is exceeding its authority, the response coordinator can voice the employer’s objection and state that the company does not consent, but they should not argue and never physically interfere with the agent’s actions.
If agents attempt to seize something that is critical to company operations (such as a computer, proprietary information, or an important file), explain why the item is critical to the company’s operations, request a more limited or targeted seizure, and/or ask to make a copy of the information before it is seized.
Employers can notify employees that they have the right to remain silent, but employers cannot instruct employees not to respond to questions. Company representatives should not be confrontational, obstructive, or evasive.
Employers and employees alike have the right to record an encounter with ICE. Consider recording interactions with ICE agents to clearly document statements and actions. Efforts to record an encounter should never interfere with the agents’ activities.
Recommended Actions After ICE Visit
Document as much as possible – The response coordinator should interview employees and make a record of the details of the event in an incident report. The report should include details such as the number of agents, a description of what they were wearing, whether the agents kept anyone from moving around the workplace freely, a detailed list of the locations of any search (including smaller spaces such as closed drawers), a detailed description of any property seized, a detailed list of statements made by the employer declining consent or asserting legal rights, and any statements made by the agents.
Follow-up notifications – employers should call legal counsel immediately to discuss next steps. If the workplace is unionized, employers should notify the union that ICE visited the workplace.
Engage and encourage open communication with and among the workforce – Employers should be open and honest with the workforce about what occurred. In addition to individual instances of absenteeism, fear of action by ICE may lead to employees discussing their concerns or voicing disagreement with the employer’s response (or potential response) to ICE. Employers must be aware that certain employee collective action (discussions, protests, other concerted activity, etc.) may be protected under the National Labor Relations Act if it relates to the terms and conditions of employment, even for non-union workers or those who may not be authorized to work in the U.S.
Provide reasonable leave – If ICE detains a worker, consider providing the worker with an unpaid leave of absence during and in the immediate aftermath of the detention. While not legally required, an employer could consider handling the matter in a manner similar to the leave that might be provided in the event of a sudden medical issue or other unexpected absence. Failure to provide such comparable leave could give rise to a claim for national origin discrimination. Employers are never, however, required to provide employees with indefinite leaves of absence.
[1] While police officers are allowed to search and arrest without a warrant in the event of different types of emergencies such as while in “hot pursuit” of a criminal suspect, ICE agents are not police officers (regardless of whether their uniforms say “Police”). ICE agents may not search and seize without a warrant if they are merely in “hot pursuit” of a suspected undocumented person. Under applicable law, this type of warrantless search or seizure is only permitted if the agent is in “hot pursuit” of an individual who “poses a public safety threat” or who the agent personally observed crossing the border.
[2] One key exception is the “in plain view” principle. With or without a warrant, ICE agents are always allowed to look at anything in “plain view,” including computer screens or papers sitting out on desks, or listen to audible conversations that can be overheard without a listening device. If what the agent sees or hears in “plain view” gives them probable cause that unlawful activity is, has, or will occur, they can search the relevant private area and seize relevant items without a warrant.
[3] The Form I-9 is a document used to verify the identity and employment eligibility of individuals within the United States. Federal law requires employers to create and maintain I-9 Forms and supporting documentation for all employees.
[4] Employers are cautioned against voluntarily consenting to a search or seizure of the Forms I-9 if ICE agents do not have a judicial warrant for this information or if the 3-day period after receiving a Notice of Inspection has not yet expired. The Form I-9 rules are nuanced and strict, and it is very common for employers to unknowingly violate a rule due to an unintended error on the forms or in record-keeping. Employers can be subject to monetary fines for substantive violations and any uncorrected technical violations regardless of whether the violation was intentional
How Employers and Healthcare Providers Can Navigate Immigration Enforcement
Despite the anticipation of increased enforcement of US immigration laws, the rules and practical advice related to an employer’s legal duties under the Immigration Reform and Control Act (IRCA) and what to do if US Immigration and Customs Enforcement (ICE) officers present themselves at your place of business have not changed.
This client alert provides a brief overview, proactive suggestions, and practical tips for employers, as well as for healthcare providers, whose patients may be the target of an ICE visit.
In Depth
EMPLOYER’S LEGAL DUTIES UNDER THE IRCA, AND DHS-ICE AUTHORITY TO ENFORCE IMMIGRATION LAWS
Under the IRCA, it is unlawful in the United States to hire, recruit, or continue to employ a person who is not in the country legally and not authorized to work (“an unauthorized alien,” as defined by law). An employer has a defense if it, in good faith, reviewed and accepted Form I-9 documentation that reasonably appeared to be genuine on its face.
The US Department of Homeland Security (DHS) has the authority to conduct worksite inspections and audits. ICE, the DHS component responsible for enforcing the IRCA, has the authority to appear at a worksite with a notice of inspection or subpoena, demanding the production of various documents within three days, including:
Historical lists of workers
Payroll and tax records
Company ownership information
Staffing vendor information
I-9 forms
Copies of identity and authorization documents presented by employees
During an audit, ICE may issue a “Notice of Suspect Documents” for workers believed to be unauthorized based on database checks, even if the Form I-9 was completed correctly. Employers must either contest the finding or terminate the workers, often with little time for resolution. ICE is rarely wrong about suspect documents, and confronting the worker often results in the worker not returning to work.
DHS may investigate employers, plant undercover agents within the workforce, and conduct raids with armed agents, presenting search and seizure warrants. They may seize documents, computers, and phones, and arrest unauthorized workers. The department may also prosecute employer owners and managers on charges such as harboring and trafficking unauthorized workers, mail and wire fraud, document fraud, and tax evasion. Criminal charges can result in significant fines and imprisonment.
ICE has the authority to arrest and detain most non-citizens, including those with arrest histories and certain long-term permanent residents. It can conduct workplace raids and other enforcement activities to effectuate these arrests. ICE must present a judicial warrant to enter nonpublic areas of a workplace. A judicial warrant is signed by a federal judge, not an immigration officer. The warrant must provide specific details, such as the name of the individual to be arrested, the location, and the reason for the arrest. Without a warrant, ICE is only allowed to be in public areas of the workplace.
According to a recent DHS memorandum, the department is availing itself of law enforcement components of the US Department of Justice (DOJ) – including the US Drug Enforcement Administration (DEA), the ATF, the US Marshals Service, and the Federal Bureau of Prisons (BOP) – to carry out “functions” of an immigration officer to enforce immigration law. Historically, only the US Marshals were tapped to assist when a migrant became a fugitive. Although it remains to be seen how these DOJ law enforcement resources will be directed, it is possible that DHS’s immigration enforcement capacity will be more far-reaching than under previous administrations.
POTENTIAL SANCTIONS AND PENALTIES
Employers are subject to sanctions for incorrectly completed I-9 forms, missing forms, or knowingly hiring unauthorized workers, which can range from $300 to $30,000 per worker, as well as debarment from federal contracts. Employers are allowed 10 days to correct technical errors, but certain substantive errors cannot be corrected to avoid penalties. ICE can also fine employers for failing to comply with technical requirements for electronic storage of completed forms.
Interfering with an ICE arrest warrant can also lead to criminal charges for obstructing justice. This can include fines and imprisonment, depending on the severity of the interference.
GENERAL TIPS FOR ALL EMPLOYERS
Maintain and enforce a comprehensive, compliant immigration policy.
Identify coordinators and designated points of contact in the event of any visit by ICE agents, including an ICE raid.
Conduct annual self-audits of I-9 forms to identify and address any issues before enforcement actions occur. Note: An employer is required to accept a List A document, or a List B and C document, from employees. Accepting and keeping copies of too many documents is also an IRCA violation.
Hint: If an employee presents a document from all three lists, return them and ask them to either provide a List A document, or provide a List B and a List C document. Let the employee choose, then review the requisite and correct number of documents for the Form I-9 Verification.
Ensure proper Form I-9 verification and storage, including in digital format. Designate and train individuals in I-9 verification and retention.
Enroll in E-Verify to verify social security numbers and names and ensure compliance with the IRCA. E-Verify is a platinum standard protection for employers. But it is not a safe harbor. Employers can still be fined for I-9 violations.
Use the Social Security Administration (SSA) website, if your organization is not enrolled in E-Verify, to confirm social security numbers match the employee’s name and identification.
Comply with no-match letters from the SSA by presenting the letter to the employee and asking them to present correct and valid documentation. Check that new documentation matches the name using the SSA website.
Identify and stop systematic improprieties in hiring practices.
Pay employees and submit tax withholding payments correctly, using real and correct social security numbers.
Educate staff on how to interact with ICE, DHS, or other law enforcement agents, including calling counsel and managing the situation calmly and professionally.
SPECIAL CONSIDERATIONS FOR HOSPITALS AND OTHER HEALTHCARE FACILITIES
In 2011 and 2021, ICE established a policy that generally prohibited engaging in enforcement actions at “sensitive locations,” such as healthcare facilities, schools, and religious institutions, unless exigent circumstances existed (namely, public safety threats, imminent risk of death, violence, physical harm, or destruction of evidence material to an ongoing investigation). On January 20, 2025, the Trump administration rescinded that policy, and ICE may again conduct enforcement actions in these locations. Enforcement actions may include interviews, arrests, searches, inspections, surveillance, and requests for protected health information (PHI). The Privacy Rule adopted under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) permits (but does not require) disclosure of PHI in accordance with a valid court order or court-ordered warrant or a subpoena or summons issued by a judicial officer.
Healthcare professionals may have state law or ethical obligations to consider the best interests of patients. Accordingly, healthcare workers should consider any state law or ethical responsibilities to protect patients’ health with their obligations to comply with federal law. For example, in a case where ICE presents a valid judicial warrant for the arrest of a patient, if that patient is in a life-threatening or severe state, the healthcare provider could explain this to ICE officers and request that ICE officials work with the healthcare provider to determine a safe course of action for the patient.
TIPS FOR HEALTHCARE FACILITIES
Ensure staff members are familiar with the organization’s policies on patient confidentiality and the rights of both patients and healthcare providers.
Comply with the law and be mindful of emerging state laws on this issue. California is advising healthcare providers not to document patients’ immigration status on bills and medical records and advising patients and providers that they do not have to assist federal agents in arrests. Florida and Texas, by contrast, require healthcare facilities that accept Medicaid to ask the immigration status of patients (although a patient may decline to answer) and tally the cost to taxpayers of providing care to immigrants living in the United States without authorization.
Develop and train on protocols that outline the steps to be taken in the event of an ICE raid.
Designate specific roles to appropriate staff members, such as who will act as the point of contact with ICE agents and who will interact with patient(s) in question.
Healthcare facilities may post signage about patient rights, including that exam-room conversations are confidential and that privacy laws protect information in the medical record (including identifying information), and patients’ right to remain silent in the event of an ICE raid.
Healthcare facilities that are HIPAA-covered entities must provide patients an opportunity to decline to be listed in a facility directory or otherwise restrict or prohibit use of PHI for facility directory purpose.
WHAT TO DO IF AN ICE AGENT VISITS, OR IF RAIDS OCCUR AT A HEALTHCARE FACILITY
All staff members should remain calm and composed.
Only the designated points of contact should interact with ICE agents. These individuals should be well-versed in the organization’s policies and the legal rights of patients and staff.
Designated points of contact should have ICE agents identify themselves by name and badge number. While healthcare workers and organizations have no affirmative legal obligation to report undocumented immigrants to officials, healthcare workers must lawfully abide with providing information and access to facilities where a valid warrant is presented.
Designated points of contact should politely request to see and review any warrants presented by ICE agents and ensure the warrants are valid and specific to the premises before permitting access to any private areas. For the warrant to be valid, it must be signed by a federal judge (a judge’s signature will indicate such).
Hint: If the warrant is a DHS Form I-200 or I-205 signed by an immigration officer, this is not a judicial warrant. In this case, the healthcare provider can advise the ICE agent that the warrant is not a valid judicial warrant and that the ICE agents may not enter any private areas – they must remain only in public areas.
Points of contact should provide information or documents required by a valid warrant but need not provide information or records falling outside of the warrant to maintain patient confidentiality.
After the ICE visit or raid, document the event by immediately identifying the names and badge numbers of ICE agents who were present, the time and duration of their presence, and any actions taken by the agents. Secure all patient records that may have been accessed during the event.
Patient liaisons may reach out to all patients affected by the raid to inform them of what occurred and reassure them of their safety and the confidentiality of their records. Patient liaisons may also provide impacted patients and their families with information to immigration advocacy organizations and legal aid groups who can provide legal support, particularly if a patient is taken into immigration custody.
CONCLUSION
Employers and healthcare providers must remain vigilant and proactive in managing immigration compliance to avoid significant penalties and disruptions. By following these tips and working closely with experienced counsel, organizations can be in legal compliance, navigate the complexities of immigration control, and protect their businesses and managers.
Analyzing President Trump’s “Defending Women From Gender Ideology Extremism And Restoring Biological Truth To The Federal Government” Executive Order
On January 20, 2025, President Trump issued an Executive Order titled, “Defending Women From Gender Ideology Extremism And Restoring Biological Truth To The Federal Government” (the “EO”). The EO declares that “[i]t is the policy of the United States to recognize two sexes, male and female.” The EO explicitly rejects “gender ideology,” which, according to the EO, includes the notion “that males can identify as and thus become women and vice versa” and “it is possible for a person to be born in the wrong sexed body.”
Key Provisions of the Executive Order
Aside from declaring that the United States will only recognize two sexes—male and female—the other key points in this EO are as follows:
Definition of Sex. The EO defines the term “sex” as a person’s “immutable biological classification as male or female.” This specifically excludes the concept of “gender identity,” which the EO deems subjective.
Sex-Based Distinctions on Federal Policies. Federal agencies are required to use the term “sex,” not “gender,” in all their policies and official documents in enforcing sex-based distinctions.
Government-Issued Identification Documents. Government-issued identification—such as passports, visas, and federal employment records—must reflect the holder’s biological sex as defined in the EO. This reverses the Biden administration’s policy permitting Americans applying for a passport to use “X,” along with the option for male or female, as a gender marker. Andrea Lucas, acting Chair of the Equal Employment Opportunity Commission (“EEOC”) announced in a recent press release that she has “[e]nded the use of the ‘X’ gender marker” for those filing charges of discrimination (“Press Release”).
“Privacy in Intimate Spaces” Designated for Women. The EO mandates that single-sex spaces designated for women, including women’s prisons and rape shelters, are designated by biological sex and not by gender identity.
Investigation and Litigation to Enforce Sex-Based Rights. The EO directs the Attorney General, Secretary of Labor, and EEOC to “prioritize investigations and litigation to enforce the rights and freedoms identified” in the EO. In the Press Release issued by Ms. Lucas, she also announced that one of her priorities for investigations and litigations “is to defend the biological and binary reality of sex and related rights, including women’s rights to single-sex spaces at work.”
Rescission of Prior EEOC Guidance on Workplace Harassment. The EO explicitly rescinds certain guidance issued by the prior administration related to transgender individuals and gender identity based claims. This rollback includes the EEOC’s guidance on workplace harassment—which contains numerous references to gender identity harassment and discrimination—and other policies directed at LGBTQI+ individuals.
Limitation on the Scope of the Supreme Court’s Decision in Bostock v. Clayton County. The EO directs the Attorney General to immediately issue guidance narrowing the interpretation of the Supreme Court’s decision in Bostock v. Clayton County—holding that “sex discrimination” under Title VII of the Civil Rights Act includes discrimination on the basis of sexual orientation and gender identity.
Implications for Private Employers
Employers should anticipate and address questions from employees, especially from LGBTQI+ employees and allies, regarding any policy changes. Employers with policies prohibiting discrimination, harassment, and retaliation on the basis of gender, gender identity, and gender expression can reassure their employees of the company’s commitment to a safe and inclusive workplace.
Given the EEOC’s stated priority to create “single-sex spaces at work,” employers may find themselves facing conflicting obligations under federal and state law. Employers should stay informed on the developments at the federal level. Such developments might include, for example, litigation instituted by the new EEOC over restroom access and biological sex—which Ms. Lucas indicated could be a priority. Employers must also remain mindful of their obligations under state laws that explicitly prohibit discrimination, harassment, and/or retaliation on the basis of gender identity and sexual orientation.
Employers should anticipate changes to the EEOC “Know Your Rights: Workplace Discrimination is Illegal” poster, which covered employers are required to post on premises. The poster is undergoing revision pursuant to the EO.
Employers should expect changes in reporting options for identification forms that include the sex of their employees. For example, it is possible that, in light of the EO, certain government forms may no longer permit employers to include non-binary or similar gender identity information of their employees.
What’s Next?
President Trump’s EO mandates that each agency report on their implementation progress within 120 days. For now, little is known about how agencies will comply with the EO. Although we expect various agencies to begin releasing administrative guidance comporting with the EO in the coming months. Given that some of the EO’s directives may be in conflict with established legal precedent, litigation challenging the EO is possible.
Top Tips for Canadian Workforce Restructuring in the Trump Tariff Era
Some economists predict that the impact of President Trump’s proposed 25 percent U.S. tariff on Canadian imports could lead to a 2 percent to 2.6 percent loss of Canadian economic output annually and the loss of up to one million jobs in Canada. Half of that number may be in the province of Ontario, according to Ontario Premier Doug Ford.
For this reason, employers with Canadian operations may want to proactively review their workforce restructuring options to face potential upcoming challenges, keeping in mind the associated legal risks.
Quick Hits
Employers may want to review employment contracts, collective agreements, and applicable statutory rules before implementing any workforce restructuring.
Some restructuring options may avoid or delay permanent job losses, notably through government work-sharing programs or temporary layoffs.
When permanent layoffs are unavoidable, it is important to have in mind the different rules that may apply to union and nonunion employees to mitigate potential legal liabilities.
Consider Accessing Government Help Programs
Employment and Social Development Canada (ESDC) has established a Work-Sharing Program (WSP) that seeks to help employers avoid layoffs when there is a temporary decrease in normal levels of business activity that is beyond their control. The WSP provides income support to employees eligible for Employment Insurance benefits who are required to work a reduced workweek during a period of economic hardship for the employer. Affected employees must experience, and agree to, at least a 10 percent reduction in their normal weekly earnings to participate. The agreement of the employer, and union if any, is also required to participate in this program.
WSP agreements must be at least six weeks’ duration and can go as long as twenty-six weeks. In some cases, they can be extended up to thirty-eight weeks.
For an employer to participate in the WSP, it must have operated a year-round business in Canada for at least two years. Eligible employers can be for profit or nonprofit, public, or private.
Further information on eligibility requirements and the application process can be found here.
Apart from the WSP, various other federal and provincial programs seek to lessen the impact of mass layoffs due to economic circumstances, notably by assisting affected workers in their search for alternative employment. At the federal level, the Canada Retraining and Opportunities Initiative supports this goal. The federal government also spends over $2 billion per year through Labour Market Development Agreements with provinces and territories, which seek to help affected individuals gain new skills and find new employment, among other things.
Consider Temporary Layoffs
Whether under a WSP or not, some employers may consider temporarily laying employees off. The rules here vary depending on whether the affected employees are represented by a union or not.
For nonunion employees, a temporary layoff may result in claims for wrongful dismissal unless the affected employees’ contracts of employment expressly or implicitly allow for temporary layoffs. Before proceeding with a temporary layoff, existing employment agreements and the contextual circumstances (i.e., is there a history of layoffs at this employer or in its industry?) need to be considered. Even if a temporary layoff may be contractually permissible, employment standards laws may set limits on how long a temporary layoff may last before an employee is deemed discharged and eligible for termination pay and other potential termination entitlements. For example, in the province of Ontario, employment standards legislation generally limits the period of temporary layoff to thirteen weeks, although this may be extended further in certain circumstances.
For unionized employees, the provisions of a collective agreement may require an employer to consult with the union prior to proceeding with a layoff. And a collective agreement may also set rules as to how layoffs must proceed, and what laid off employees’ recall rights are.
Consider Renegotiating Existing Terms of Employment
Although no employee or union will like the idea of a mid-contract reopener, in difficult times this may be the best option as an alternative to ending the employment relationship. This option cannot be forced on employees or unions and is best approached in good faith, supported by genuine hardship that an employer will otherwise be facing. There may also be legal rules that come into play that can have an impact on the enforceability of any renegotiated agreement.
Consider the Applicable Termination Rules
If permanent layoffs cannot be avoided, Canadian law presents a complex web of common law, contractual requirements, and statutory rules concerning employment termination that must be carefully considered before acting. Again, the applicable rules vary by whether an affected employee is represented by a union or not.
In general, when a nonunion employee is dismissed without just cause, the employee is entitled to reasonable advance notice of the employment termination, pay in lieu of that notice, or a combination of both. Employment standards laws establish the minimum termination entitlements for all employees. Some provinces, such as Ontario, require the payment of severance pay and the maintenance of benefits coverages during the period of statutory termination notice. Beyond statutory entitlements, nonunion employees may have further entitlements under an employment contract or at common law.
For unionized employees, the applicable collective agreement may provide for severance or other entitlements above employment standards minimums.
For both unionized and nonunion employees, collective dismissal (or mass termination) rules may also come into play, depending notably on the number of employees discharged in a given period of time. For example, in Ontario, the applicable threshold is “50 or more employees at the employer’s establishment in the same four-week period.” In Québec, the threshold is met in the case of “termination of employment by the employer, including a layoff for a period of six months or more, involving not fewer than 10 employees of the same establishment in the course of two consecutive months.”
Consider Helping Employees Transition to Alternative Employment
For nonunion employees who have a potential contractual or common law claim for pay in lieu of notice, the liabilities can be considerable. Long service and older employees can in some cases assert claims for up to twenty-four months of their total remuneration, or more in exceptional circumstances.
However, these potential claims may be reduced under the legal doctrine of mitigation. Plaintiffs generally must prove their damages, and, practically speaking, this means that they must show that they tried their best to find alternative employment but were unable to do so. As a corollary, if an employer can show that an employee did not take reasonable steps to find alternative work during the claimed notice period, and that the employee likely could have found alternative work with sufficient effort, this can have the effect of reducing the employee’s potential entitlements. Similarly, the sooner that an employee finds reasonable alternative employment, the sooner that a terminating employer’s potential liabilities may cease.
For this reason, it is often a good idea for employers to take active steps to help employees transition to alternative employment. Outplacement services can be offered. Employees can be directed to applicable government programs. And employers can even carry out ongoing job searches for affected employees, bringing job opportunities to their attention. If litigation ensues, employers will be able to rely on proof of such measures in arguing for a reduction or elimination of excessive damages claims that discharged employees may bring.
Other Considerations
Employees who are dismissed for economic reasons while on leave (maternity, disability, etc.) may raise allegations of discrimination or reprisal under employment standards and antidiscrimination laws. Legal proceedings in that context may probe the reasons for selecting such employees for dismissal, as opposed to others. Accordingly, employers may want to ensure they have a properly documented nondiscriminatory selection process to be able to later justify the decision-making process.
Conclusion
The full impact of the United States’ proposed tariffs remains to be seen, but current indicators suggest that the imposition of across-the-board tariffs would have a significant effect on the Canadian workforce. For this reason, employers with Canadian operations may want to undertake impact assessments now and consider the lawful restructuring strategies that may be employed to mitigate the impacts of U.S. tariffs and related and potential legal liabilities.
EEOC Acting Chair Issues Statement Announcing Commission’s Plans to Remove Gender Ideology and Return to Misson of “Protecting Women in the Workplace”
On 28 January 2025, the Acting Chair of the Equal Employment Opportunity Commission (EEOC or Commission), Andrea Lucas (Acting Chair Lucas) issued a statement announcing that the Commission is returning to its “mission of protecting women from sexual harassment and sex-based discrimination in the workplace by rolling back the Biden administration’s gender identity agenda.”
This statement followed President Trump’s issuance of Executive Order 14168 (EO 14168), which, among other things, directs federal agencies to enforce “the freedom to express the binary nature of sex and the right to single-sex spaces in the workplace” and remove all existing statements, policies, forms, communications, or messages promoting gender ideology. EO 14168 states that the federal government shall recognize only two sexes—male and female.
Acting Chair Lucas has already taken several actions to enforce the terms of EO 14168.
First, one day after President Trump issued EO 14168, she announced several priorities for the EEOC’s compliance, investigations, and litigation—one being to “defend the biological and binary reality of sex and related rights, including women’s rights to single sex spaces at work.”1
Acting Chair Lucas has also removed materials promoting gender ideology from the EEOC’s internal and external websites and documents. This review remains ongoing. She also began a content review of the EEOC’s “Know Your Rights” poster, which all covered employers are required to post in their workplaces, removed the display of EEOC employees’ pronouns in internal and external communications, and removed the “X” and “Mx.” gender markers from the Commission’s charge and related forms and intake process.
Acting Chair Lucas has indicated that she cannot unilaterally remove or modify certain gender identity-related documents, as doing so requires a majority vote of the full Commission. And notably, after President Trump’s unprecedented termination of two sitting Democratic EEOC commissioners on 27 January 2025, the EEOC lacks a voting quorum with only two of its five members in place—Acting Chair Lucas and Democratic Commissioner Kalpana Kotagal.
These documents include the Commission’s “Enforcement Guidance on Harassment in the Workplace” (issued by a 3-2 vote in 2024) (Harassment Guidance), which EO 14168 specifically requested be rescinded, as well as the EEOC Strategic Plan 2022-2026 (issued by a 3-2 vote in 2023), and the EEOC Strategic Enforcement Plan Fiscal Years 2024-2028 (issued by a 3-2 vote in 2023). Acting Chair Lucas voted against each of these documents. She has been particularly vocal about her opposition to portions of the Harassment Guidance that state that harassing conduct under Title VII includes “denial or access to a bathroom or other sex-segregated facility consistent with [an] individual’s gender identity” and “repeated and intentional use of a name or pronoun inconsistent with [an] individual’s known gender identity.”
Looking Ahead
While Acting Chair Lucas has made clear the Commission’s priority to enforce the “binary reality of sex,” including by removing guidance and references to “gender identity,” this new priority may be in tension with current federal law. Indeed, in Bostock v. Clayton County,2 the US Supreme Court held that Title VII prohibits discrimination and harassment based on gender identity and sexual orientation. It is certainly possible that the Supreme Court could revisit this ruling and reach a different conclusion—as its makeup has changed since the Bostock decision. However, unless and until the court does so or Congress amends Title VII, employment discrimination against transgender and gender nonconforming individuals remains illegal under federal law.
Additionally, more than half of the states in the United States have laws explicitly prohibiting, or have interpreted other laws to prohibit, discrimination and harassment based on sexual orientation and gender identity. These laws remain in effect.
We are likely to see an increase in workplace disputes on this issue in the future—including disputes involving “single sex spaces” in the workplace, such as bathrooms and locker rooms—which the court specifically avoided discussing in Bostock, but are addressed at the state and local level. For example, guidance from the California Civil Rights Department provides that “[a]ll employees have a right to safe and appropriate restroom and locker room facilities . . . [which] includes the right to use a restroom or locker room that corresponds to the employee’s gender identity, regardless of the employee’s sex assigned at birth.”3 Additionally, according to published guidance, the New York City Human Rights Law requires that employers permit employees “to use single-gender facilities, such as restrooms or locker rooms, and to participate in single-gender programs, that most closely align with their gender, regardless of their gender expression, sex assigned at birth, anatomy, medical history, or the sex or gender indicated on their identification.”4
Employers may also see an increase in challenges to gender-identity-related policies and practices—including policies that permit or require employees to designate or use pronouns in communications to comply with state or local law,5 as well as an increase in religious accommodation requests related to such policies.6 Given the current conflicting legal landscape, employers should consider a review of any such policies with counsel to ensure compliance with applicable law. Moreover, with the change in federal guidance, states and municipalities may adopt additional regulations addressing gender identity protections in the workplace. Despite the shift in enforcement priorities, employers should continue to implement anti-discrimination, anti-harassment, and equal opportunity policies as well as conduct workplace trainings consistent with applicable law; and monitor developments at the state and federal level. Employers should also continue to emphasize workplace respect, civility, and anti-bullying expectations generally for their workforce.
There are likely to be many more developments in the coming days and weeks.
Footnotes
1 See, EEOC Press Release, President Appoints Andrea R. Lucas EEOC Acting Chair, January 21, 2025, https://www.eeoc.gov/newsroom/president-appoints-andrea-r-lucas-eeoc-acting-chair.
2 590 U.S. 644 (2020).
3 See California Civil Rights Department, Fact Sheet on The Rights of Employees Who Are Transgender or Gender Nonconforming, November 2022, https://calcivilrights.ca.gov/wp-content/uploads/sites/32/2022/11/The-Rights-of-Employees-who-are-Transgender-or-Gender-Nonconforming-Fact-Sheet_ENG.pdf.
4 See NYC Commission on Human Rights Legal Enforcement Guidance on Discrimination on the Basis of Gender Identity or Expression: Local Law No. 3 (2002); N.Y.C. Admin. Code § 8-102, (last updated February 15, 2019), https://www.nyc.gov/assets/cchr/downloads/pdf/publications/2019.2.15%20Gender%20Guidance-February%202019%20FINAL.pdf.
5 According to published guidance, the New York City Human Rights Law “requires employers and covered entities to use the name, pronouns, and title (e.g., Ms./Mrs./Mx.) with which a person self-identifies, regardless of the person’s sex assigned at birth, anatomy, gender, medical history, appearance, or the sex indicated on the person’s identification.” See id.
6 It is important to note that following the US Supreme Court decision in Groff v. DeJoy, 600 U.S. 447 (2023), there is a heightened threshold for determining undue hardship for religious accommodation requests. See K&L Gates Legal Alert, US Supreme Court Unanimously Adopts Heightened “Undue Hardship” Standard in Title VII Religious Accommodation Analysis, June 30,2023, https://www.klgates.com/US-Supreme-Court-Unanimously-Adopts-Heightened-Undue-Hardship-Standard-in-Title-Vii-Religious-Accommodation-Analysis-6-30-2023.
Washington State Seeks to Broaden the Definition of “Noncompetition” and Ban Most Noncompetes
On January 3, 2025, the Washington State Legislature introduced HB1155 (the “Bill”) that, if passed, would broaden the definition of a “noncompetition covenant” and prohibit all employer-employee noncompete agreements.
The Bill would also seek to clarify the definition of “non-solicitation agreement” under Washington law. On January 13, 2025, the Bill was referred to the House Labor & Workplace Standards Committee where it remains pending.
Washington’s statute restricting the use of noncompetition covenants took effect in 2020, and it was amended in important ways last year. The current Bill proposes yet more amendments.
If passed, the Bill would amend Revised Code of Washington (RCW) Sections 49.62.005 and 49.62.010 to expand upon the definition of “noncompetition covenant” and notes that the provisions protecting employees and independent contractors must be construed liberally. Under the Bill, a “noncompetition covenant” includes:
Every written or oral covenant, agreement, or contract, that prohibits or restrains an employee or independent contractor from engaging in a lawful profession, trade, or business of any kind;
A covenant, agreement, or contract between a performer and performance space, or any third-party scheduling the performer for a performance space . . . that prohibits or restrains the performer from engaging in a lawful performance;
An agreement that directly or indirectly prohibits the acceptance or transaction of business with a customer; and
Any provision in an agreement that threatens, demands, requires, or otherwise effectuates that an individual return, repay, or forfeit any right, benefit, or compensation, as a consequence of the individual engaging in a lawful profession, trade, or business of any kind.
While the Bill seeks to broadly define “noncompetition covenant,” Washington’s noncompete law expressly states that “noncompetition covenant” does not
AI at Work: Design Use Mismatches [Podcast]
In the final installment of our AI at Work series, partner Guy Brenner and senior counsel Jonathan Slowik tackle a critical issue: mismatches between how artificial intelligence (or AI) tools are designed and how they are actually used in practice. Many AI developers emphasize their rigorous efforts to eliminate bias, reassuring employers that their tools are fair and objective, but a system designed to be bias-free can still produce biased outcomes if used improperly. Tune in as we explore real-world examples of these risks and what employers can do to ensure they are leveraging AI responsibly.
Guy Brenner: Welcome to The Proskauer Brief: Hot Topics in Labor and Employment Law. I’m Guy Brenner, a partner in Proskauer’s Employment Litigation & Counseling group, based in Washington, D.C. I’m joined by my colleague, Jonathan Slowik, a special employment law counsel in the practice group, based in Los Angeles. This is the final installment of our initial multi-part series detailing what employers need to know about the use of artificial intelligence, or AI when it comes to employment decisions, such as hiring and promotions. Jonathan, thank you for joining me today.
Jonathan Slowik: It’s great to be here, Guy.
Guy Brenner: So if our listeners haven’t heard the earlier installments of the series, we encourage you to go back and listen to them. In part one, we go through what we hope is a useful background about what AI is and the solutions it offers to employers. In part two, we talk about issues with training data and how that can lead to biased or otherwise problematic outputs with AI tools. In part three, we discussed so-called black box issues. In other words, issues that arise due the fact that may be difficult to understand the inner workings of many advanced AI systems. Today’s episode is about mismatches between the design of an AI tool and how the tool is used in practice. Jonathan, for background, AI developers generally put a lot of effort in eliminating bias from their products, isn’t that right?
Jonathan Slowik: Yes, that’s right. And that’s a major selling point for a lot of these developers. Employers obviously have a great interest in ensuring that they’re deploying a tool that’s not going to create bias in an unintended way. And so, if you go to just about any of these developers’ websites, you can find statements or even full pages about the efforts and lengths they’re going through to ensure that they’re putting out products that are bias free. And this should provide some measure of comfort for employers. It’s clearly something that the developers are competing on. But even if a product is truly bias free, it could still produce biased results if it’s deployed in a way that the developer didn’t intend to make this concrete. I want to go through a few examples. So first, suppose an employer instructs their resume scanner to screen out applicants that are more than a certain distance from the workplace. Perhaps on the theory that these people are less likely to be serious candidates for the position. And if you remember, in part one of this series, hiring managers are overwhelmed with applications these days. Given the ability to submit resumes at scale on platforms like LinkedIn or indeed. Guy, do you see any problem with this particular screening criteria?
Guy Brenner: Well, Jonathan, I can see the attractiveness of it. And I can also see how I can make something like this that hiring managers may have thought of in the past possible when otherwise it would be impossible. Just by virtue of the speed and efficiency and ability of AI to do things, you know, in a matter of seconds. And it sounds unbiased and objective, and it’s a rational basis for trying to cull through the numerous resumes that employers are inundated with whenever they’re trying to fill a position. But the fact is that many of the places in which we live are highly segregated by race and ethnicity. So depending on where the workplace is located, this kind of approach might disproportionately screen out legitimate candidates of certain races, even though that may not be the intent.
Jonathan Slowik: Right. And even though this is something that you could do manually, a hiring manager could just decide to toss out all the resumes of a certain zip code. Doing this with technology increases the risk. So again, a hiring manager doing this manually might start to notice a pattern at some point and realize that this screening criterion was creating an unrepresentative pool. The difference with using software to do this kind of thing is that it can be done at scale very quickly, and only show you the output. And so, the same hiring manager doing this with technology might screen out mostly racial minorities and have no idea that that was even the case. All right. Next hypothetical. What if an employer uses a tool that tries to verify candidate’s backgrounds by cross-referencing social media, and then boosts candidates whose backgrounds are verifiable in that way? Any issues with that one?
Guy Brenner: Well, the one that comes to mind is, I mean, I don’t think this is a controversial proposition that, generally speaking, younger applicants are more active on social media than older applicants. And I think that’s exacerbated depending on which platform we’re talking about.
Jonathan Slowik: So we actually have data on that. So it’s not a stereotype. It’s actually on the Pew Research has issued data confirming what all of us I think suspect.
Guy Brenner: Right. And so it’s not hard to imagine an enterprising plaintiff’s lawyer arguing that a screening tool like this may have a disparate impact on older applicants. I would also be concerned if the scoring takes into account other information on social media pages that could be used as proxy for discriminatory decisions.
Jonathan Slowik: Okay, one more hypothetical. Suppose an employer trying to fill positions for a call center uses a test that tries to predict whether the applicant would be adept at handling distractions under typical working conditions. And supposing this call center that includes a lot of background values. So this is clearly a screening mechanism that’s testing something job related. The employer wants to see how this person is going to perform under the conditions we expect them to be placed in when we actually put them in the job. Is there any problem with this kind of test?
Guy Brenner: Well, first, like any other test, you’d want to know if the test itself has any disparate impact on any particular group, you would want to have it validated. But I also want to know if the company had considered whether some applicants would be entitled to a reasonable accommodation. For example, you can imagine someone who’s neurodiverse performing poorly on this type of simulation, but doing just fine if they were provided with some noise canceling headphones.
Jonathan Slowik: For sure. And this is something the EEOC has issued guidance about. Many of these types of job skills simulations are designed to test an applicant’s ability to perform tasks, assuming typical working conditions, as the employer did in this example. But what the EEOC has made clear is that many employees with disabilities don’t work under atypical working conditions because they work with reasonable accommodations. So for that reason, over reliance on the test without considering the impact on people with disabilities and whether the test should allow for accommodations is potentially problematic.
Guy Brenner: Well, thanks, Jonathan, and to those listening, thank you for joining us on The Proskauer Brief today. We hope you found this series informative. And please note that as developments warrant, we will be recording new podcasts to help you stay on top of this fascinating and ever-changing area of the law and technology.
Trump Administration’s ‘Regulatory Freeze Pending Review’ Pauses OSHA’s Rulemaking on Heat Illness and Emergency Response
The second term of President Donald J. Trump started with a flurry of executive orders, presidential memoranda, and directives, some of which were signed on January 20, 2025, shortly after he took the oath of office.
While the Occupational Safety and Health Administration (OSHA) is not mentioned by name in those presidential documents, it will feel the impact of requirements outlined in several. In particular, several proposals for new OSHA standards or revisions to existing OSHA standards made during the last years of the Biden presidency will be impacted.
Quick Hits
On January 20, 2025, President Trump issued a presidential memorandum, “Regulatory Freeze Pending Review,” directing “all executive departments and agencies” to refrain from proposing or issuing “any rule in any manner” until a department or agency head appointed or designated by the president reviews and approves the rule.
It immediately withdraws any rules that have been sent to the Office of the Federal Register but have not yet been published.
The memorandum’s directives apply to a broad range of OSHA activity, including rulemaking related to “Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings” and the “Emergency Response Standard.” OSHA’s “Walkaround Rule,” recent Hazard Communication Standard updates, and the most recent updates to OSHA’s recordkeeping rules would appear not to be affected.
Executive action related to new and pending rules is not unique to this administration but instead has almost become a standard practice for an incoming president. The “Regulatory Freeze Pending Review” memorandum states, in pertinent part, the following:
(1) Do not propose or issue any rule in any manner, including by sending a rule to the Office of the Federal Register (the “OFR”), until a department or agency head appointed or designated by the President after noon on January 20, 2025, reviews and approves the rule. […]
(2) Immediately withdraw any rules that have been sent to the OFR but not published in the Federal Register, so that they can be reviewed and approved as described in paragraph 1….
(3) …[C]onsider postponing for 60 days from the date of this memorandum the effective date for any rules that have been published in the Federal Register,or any rules that have been issued in any manner but have not taken effect, for the purpose of reviewing any questions of fact, law, and policy that the rules may raise.
The directives apply to “rules,” broadly defined to include a wide range of agency actions and terms, including:
“rule[s],” as defined by the Administrative Procedure Act;
“regulatory action,” as defined in section 3(e) of Executive Order 12866 of September 30, 1993 (“Regulatory Planning and Review”), as amended; and
“guidance document[s],” as defined in section 2(b) of Executive Order 13891 of October 9, 2019 (“Promoting the Rule of Law Through Improved Agency Guidance Documents”).
The presidential memorandum states that its requirements apply to “any substantive action by an agency (normally published in the Federal Register) that promulgates or is expected to lead to the promulgation of a final rule or regulation” and “any agency statement of general applicability and future effect that sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulatory issue.”
Squarely within the parameters of this executive action are OSHA’s “Heat Injury and Illness Prevention in Outdoor and Indoor Work Settings” rulemaking and the “Emergency Response Standard” rulemaking. Neither of these proposals was expected to survive the change in administrations resulting from the 2024 presidential election.
Rulemakings in process that the memorandum’s directives will not directly impact include the “Prevention of Workplace Violence in Healthcare and Social Assistance” rulemaking, the proposed infectious disease standard for the healthcare sector, the proposed tree care standard, the communications tower safety standard, and revisions to the process safety management standard. Other rulemaking that will not be impacted include the so-called “Walkaround Rule,” the recent Hazard Communication Standard updates, and the most recent updates to OSHA’s recordkeeping rules.
Similarly, until the sixty-day period mentioned in the presidential memorandum expires, employers should not expect that any pending standard interpretations or other guidance will be forthcoming from OSHA.
More Shake-Up of NLRB: President Trump Appoints New NLRB Acting General Counsel
On February 3, 2025, President Donald Trump appointed William B. Cowen as the new acting general counsel of the National Labor Relations Board (NLRB), according to a statement from the NLRB. The move comes days after President Trump discharged Acting General Counsel Jessica Rutter, who served for less than a week after President Trump discharged former General Counsel Jennifer Abruzzo and removed NLRB Member Gwynne Wilcox.
Quick Hits
President Trump appointed William B. Cowen as acting general counsel of the NLRB.
The appointment comes after President Trump, in the past week, discharged former NLRB General Counsel Jennifer Abruzzo and her replacement, NLRB Acting General Counsel Jessica Rutter. President Trump also removed NLRB Member Gwynne Wilcox.
The NLRB said that field offices will continue to process unfair labor practice and representation cases.
Acting General Counsel Cowen has served as the Regional Director for the NLRB’s Los Angeles Region Office (Region 21) since 2016 and previously served as an NLRB member from January 22, 2002, to November 22, 2002, after having been appointed by the then-President George W. Bush, according to the statement from the NLRB.
The statement did not indicate who President Trump will formally appoint to fill the general counsel position. The appointment must also be confirmed by the U.S. Senate.
On February 1, 2025, President Trump discharged former Acting General Counsel Rutter, who was elevated to acting general counsel after President Trump discharged former General Counsel Abruzzo on January 27, 2025. Rutter had previously served as Deputy General Counsel under Abruzzo.
The same day as Rutter’s discharge, the NLRB issued a notice to the public that the NLRB Office of the General Counsel’s field offices will continue to process unfair labor practice (ULP) cases and representation cases as normal, pursuant to the National Labor Relations Act (NLRA), applicable regulations, and case law.
However, President Trump’s removal of Member Wilcox leaves the NLRB without a quorum to hear cases. The Board has only two sitting members: Republican appointee Marvin Kaplan, whom President Trump named the NLRB chair on his first day in office, and Democratic appointee David Prouty, whose term is set to end in August 2026.
The changes at the NLRB come as President Trump has also removed Democratic U.S. Equal Employment Opportunity Commission (EEOC) Commissioners Charlotte A. Burrows and Jocelyn Samuels and discharged EEOC General Counsel Karla Gilbride.
Next Steps
The NLRB shake-up has created some uncertainty. While the agency has said field offices will continue to hear ULP cases and representation cases, the Board lacks a quorum to hear challenges. Meanwhile, former NLRB Member Wilcox has said that she is exploring legal options to challenge her removal, which is likely to lead to a lengthy court case that could ultimately land before the Supreme Court of the United States.
Under the Trump administration, more policy changes at the NLRB are expected, but they could take time to implement as a new general counsel must be confirmed and new NLRB members appointed.
IRS Issues Guidance on Federal Tax Treatment of State Paid Family and Medical Leave Contributions and Benefits
The Internal Revenue Service (IRS) has released new guidance on the federal income and employment tax treatment of contributions and benefits paid under state paid family and medical leave (PFML) statutes. This guidance also outlines the related reporting requirements for employers and employees. There was no published guidance that addressed the taxation or reporting requirements of state PFML statutes before the publishing of Revenue Ruling 2025-4.
Quick Hits
The IRS has clarified the tax treatment of mandatory employee and employer contributions to state PFML funds, as well as optional employer payment of mandatory employee contributions.
Employers can deduct their contributions as business expenses, while employees may deduct their contributions as state income taxes if they itemize deductions and otherwise do not exceed the SALT deduction cap.
Amounts paid to employees as family leave benefits are included in the employee’s gross income but are not wages for federal employment tax purposes.
Amounts paid to employees as medical leave benefits align with Internal Revenue Code § 104(a)(3), which are only taxable in instances where contributions were not included in the employee’s gross income or paid by the employee.
The IRS has provided a transition period for enforcement and administration of these rules for calendar year 2025.
Background
Over recent years, a number of states have enacted PFML statutes to provide wage replacement to workers for periods in which they need to take time off from work due to their own nonoccupational injuries, illnesses, or medical conditions, or to care for a family member due to the family member’s serious health condition or other prescribed circumstance. Many PFML statutes require contributions from both the employer and the employee, with some allowing the employer to cover the employee’s mandatory contribution rather than withholding the amounts from wages (“employer pick-up”).
Federal Income Tax Treatment of Contributions
Employee Contributions
Mandatory employee contributions withheld from wages are treated as state income taxes and are deductible under § 164(a)(3) if the employee itemizes deductions and the deductions are subject to the state and local taxes (SALT) deduction limitation under § 164(b)(6). These amounts are included in the employee’s gross income and wages for federal employment tax purposes.
Employer Contributions
Mandatory employer contributions are treated as state excise taxes and are deductible by the employer under § 164(a). These amounts are not included in the employee’s gross income.
Employer Pick-Up of Employee Contributions
If an employer voluntarily pays part of the employee’s required contribution, this amount is treated as additional compensation to the employee under § 61 and is included in the employee’s gross income and wages for federal employment tax purposes. The employer can deduct this amount as a business expense under § 162.
Federal Income Tax Treatment of Benefits
Family Leave Benefits
Amounts paid to employees as family leave benefits are included in the employee’s gross income but are not wages for federal employment tax purposes. The state must report these payments on Form 1099 if they aggregate $600 or more in any taxable year.
Medical Leave Benefits
Amounts paid to employees as medical leave benefits that are attributable to the employee’s contribution (including employer pick-up of employee contributions) are excluded from the employee’s gross income under § 104(a)(3) and are neither wages for federal employment tax purposes nor treated as sick pay. However, to qualify for medical leave benefits under a PFML statute, the time off from work must relate to the employee’s own serious health condition. Further, amounts attributable to the employer’s contribution are included in the employee’s gross income and are considered wages for federal employment tax purposes. The state must follow the sick pay reporting rules attributable to third-party payments by a party that is not an agent of the employer.
Transition Period for Enforcement and Administration
The IRS has designated calendar year 2025 as a transition period for the enforcement and administration of the information reporting requirements and other rules described in the guidance. This transition period is intended to provide states and employers time to configure their reporting and other systems.
New DHS Security Requirements Impact Compliance for Employers with Workers in Six “Countries of Concern”
The U.S. Department of Homeland Security (DHS) recently published new security requirements for certain restricted transactions covered by the U.S. Department of Justice’s (DOJ) sensitive data export rules. The security requirements could create compliance issues for employers with workers in certain countries that have been identified as posing national security concerns, a list that currently includes China (including Hong Kong and Macau), Cuba, Iran, North Korea, Russia, and Venezuela.
Quick Hits
The U.S. Department of Homeland Security published new security requirements for restricted transactions to prevent access to covered data and systems by countries of concern and certain persons affiliated with such countries.
The security requirements, which include stricter cybersecurity policies, multifactor authentication (MFA), incident response plans, and robust encryption to prevent unauthorized access to sensitive data, were published in conjunction with a Justice Department rule implementing a Biden administration-era executive order on cybersecurity.
Companies with employees in high-risk countries may face significant challenges in ensuring compliance with the new requirements, particularly regarding access to essential networks needed for business operations.
On January 3, 2025, the DHS’s Cybersecurity and Infrastructure Security Agency (CISA) released finalized security requirements for restricted transactions pursuant to Executive Order (EO) 14117, “Preventing Access to American’s Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern,” issued in February 2024 by then-President Joe Biden. The requirements were developed in conjunction with a DOJ final rule, which was published in the Federal Register on January 8, 2025, implementing EO 14117.
The CISA security requirements apply to certain restricted transactions identified by the DOJ that involve “bulk sensitive personal data or United States Government-related data” as defined by the DOJ and EO 14117 or that are of a class of transaction determined by the DOJ to pose an unacceptable risk to national security because it may enable certain “countries of concern or covered persons to access bulk sensitive personal data or United States Government-related data.”
The DOJ has identified six “countries of concern”: (1) China, including the special administrative regions of Hong Kong and Macau, (2) Cuba, (3) Iran, (4) North Korea, (5) Russia, and (6) Venezuela. A “covered person” is an individual or entity associated with a country of concern, and the term includes: (1) entities that are controlled or owned by one or more countries of concern, (2) entities that are controlled by “one or more persons” affiliated with a country of concern, (3) individuals who are “employee[s] or contractor[s] of a country of concern,” or (4) an entity controlled by a country of concern, and individuals the attorney general determines may be controlled by or act on behalf of a country of concern or other “covered person.”
Existing laws and regulations surrounding international data transfers, which are often transaction- or sector-specific, did not comprehensively address bulk data transfers to countries of concern. And, with respect to the personal data of U.S. citizens, certain common data processing principles are unequally applied given the existing patchwork of state and sectoral privacy laws. Accordingly, in an effort to fill the gap, the security requirements articulated by the DHS cover (1) organizational and system-level requirements for covered systems and (2) data-level requirements for data that is the subject of a restricted transaction.
Organizational- and System-Level Requirements
The security requirements state that entities must require that “basic organizational cybersecurity policies, practices, and requirements” are implemented with respect to any covered system (i.e., information systems used to interact with covered data in connection with restricted transactions). These steps include:
maintaining an inventory of covered system assets and ensuring the “inventory is updated on a recurring basis”;
designating an organizational level individual, such as a Chief Information Security Officer, who will be “responsible and accountable” for cybersecurity and governance, risk, and compliance (GRC) functions;
remediating any known exploited vulnerabilities (KEVs);
documenting vendor/supplier agreements for covered systems;
developing an “accurate network topology of the covered system”;
adopting policies that require approval of new hardware or software before it is deployed in a covered system; and
developing and maintaining incident response plans.
The requirements further call for entities to implement “logical and physical access controls” to protect access to data by covered persons or countries of concern, including the use of multifactor authentication (MFA) to prevent inappropriate access to data or, in the limited circumstances where MFA is not possible, stringent password requirements. Entities will wish to consider paying close attention to their processes for evaluating the sufficiency of the their security protocols on an ongoing basis, including through the issuance and management of identities and credentials associated with authorized users, services, and hardware, and the prompt revocation of credentials of individuals who leave or change roles.
The requirements likewise mandate the ongoing collection and storage of logs that relate to access to covered systems and the security of the same. Additional technical specifications include the default denial of connections. Finally, the requirements direct entities to conduct internal data risk assessments and evaluate, on an ongoing basis, whether an entity’s approach to security is sufficient to prevent access to covered data.
Data-Level Requirements
The CISA security requirements direct entities to implement data-level measures to “fully and effectively prevent access to covered data that is linkable, identifiable, unencrypted, or decryptable using commonly available technology” by the covered person, employee, or vendor, or the governments of countries of concern. The requirements call for:
applying data minimization and masking strategies, which must include the preparation of and adherence to written data retention and deletion policies, and processing restrictions geared toward transforming the data such that it is no longer considered to be covered data or such that it is unlikely to be linked to an American person;
utilizing compulsory encryption techniques to protect data;
applying “privacy enhancing technologies” or “differential privacy techniques” during the course of any processing activities associated with covered data; and
configuring identity and access management techniques to deny access to covered systems by covered persons or countries of concern.
Next Steps
The CISA security requirements may have major implications for global companies with employees in countries of concern, such as China, and are likely to raise concerns about whether such employees will be able to access networks and information that are critical for them to do their jobs.
However, employers with substantial operations in potentially impacted countries may want to take note that while the security requirements discussed above are being implemented pursuant to a Biden administration EO, it remains to be seen whether the Trump administration will roll back the security measures as part of the administration’s ongoing deregulation focus, particularly to the extent the requirements may have the practical impact of restricting work in China. Moreover, President Trump has issued a “Regulatory Freeze Pending Review,” which could delay the April 8, 2025, effective date of the DOJ’s final rule.
In the meantime, employers may want to take steps to prepare for the CISA security requirements and DOJ regulations regarding countries of concern and covered persons. To do so, companies may want to assess the extent to which they employ covered persons in countries of concern or have entered into contracts with vendors who rely upon personnel based in such countries. If they determine this to be the case, they may wish to assess whether they have necessary privacy and security safeguards, both technical and contractual, to prevent improper access to protected personal and U.S. government data.