The EEOC Retires Guidance Protecting LGBTQ Workers and Others From Discrimination, Continuing the Rapid Remake of Federal Policy Through Presidential Action
As we have noted in recent days[1], upon returning to the Oval Office, the Trump Administration swiftly:
Sent the message that it will pursue an agenda of aggressive enforcement related to immigration and preventing undocumented workers from working in the U.S.;
Ordered federal employees to return to working physically from offices and froze all hiring for civilian employees, suggesting planned stripping of resources for federal agencies and other federal bodies (including those tasked with enforcing Equal Employment Opportunity-related rights (EEO));
Overturned a host of “harmful” executive orders passed during the Biden Administration, including executive orders seeking to protect workers against sexual orientation and gender identity or expression discrimination and to promote greater workplace safety requirements;
Overturned Executive Order 11246 and related amendments, ending a variety of federal policies and related requirements for federal government contractors that had been in place since the Lyndon Johnson Administration and now affirmatively prohibiting them from considering protected characteristics as part of employment decisions; and
Struck executive orders and presidential memoranda relating to equal employment opportunity, diversity, and inclusion efforts applicable to the federal government as an employer.
Notwithstanding the policies and potential future actions they portend, other than with respect to immigration enforcement, none of the foregoing changes summarized above apply to private employers that do not contract with the federal government — and with good reason. A presidential administration cannot on its own rewrite the equal employment opportunity statutory scheme woven through the federal fabric by laws like Title VII, the Americans with Disabilities Act, and the like. Changes to the basic scope of those laws can only come through legislative action (subject to presidential veto) and subsequent court interpretation.
But this certainly is not to say that the new administration is powerless to pursue the same policy bend portended by the changes mentioned above against private employers through its political and extra-statutory powers. And it would appear such indirect efforts to change the federal legal framework for EEO protections is underway.
In late January, the Equal Employment Opportunity Commission (EEOC) made several key removals of content from its online guidance resources — the website location where the EEOC publishes its views on what federal law should be interpreted to mean describing the federal government’s enforcement priorities under the framework of laws administered by the agency. The majority of these first guidance withdrawals pertain to LGTBQ worker protections, including the removal of several pages of resources relating to the United States Supreme Court’s 2020 decision in Bostock v. Clayton County, where the court recognized that Title VII protects employees from discrimination on the basis of sexual orientation and gender identity. While removal of this guidance does not change Bostock’s definitive statement that Title VII covers sexual orientation and gender identity, its withdrawal surely indicates that enforcing Bostock’s mandate will no longer be a priority for the EEOC and for the individuals who control how the agency uses its limited resources.
The new Administration has so far made no official announcement on these changes. Instead, while guidance and other pages on Bostock and protections for LGTBQ workers were still on the EEOC’s website at the end of the Trump Administration’s first week in office, they have subsequently been taken down from the website in an apparent silent retirement.
On the other hand, the administration has not been silent on its recent personnel changes; last week the President removed two Democratic Party-appointed members of the EEOC before the expiration of their five-year terms, along with terminating the services of the Commission’s General Counsel. The move came just hours after the President also fired National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo and removed a Democratic National Labor Relations Board member. Both the EEOC and the NLRB are now presently without a quorum of members, handcuffing the agencies’ ability to undertake certain high-level enforcement functions.
In another development similar to the silent removal of EEOC guidance regarding LGBTQ protections, previously available content on the EEOC website raising concerns about how Artificial Intelligence (AI) tools can result in unlawful employment discrimination have now been removed. This would seem to track with two other executive order actions taken by the Administration shortly after the inauguration (one striking a 2023 order seeking to create federal oversight of AI, another indicating the administration’s plan to take a hands-off approach to use of AI). Two weeks into this new administration have already brought in a sea change in the world of labor employment. It seems a certainty that more is to come — along with state law reaction, legal challenges, and the political and social backlashes that have become the norm in recent years. Foley and our team of counselors will continue monitoring and reporting on these developments while doing our utmost to help navigate these troubled and shifting waters with practical, business-focused advice.
[1] Foley’s robust, cross-disciplinary team has created a “100 Days and Beyond: A Presidential Transition Hub” which will be regularly and swiftly updated to keep you apprised of changes covering not just labor and employment, but also legal areas like Artificial Intelligence, Antitrust & Competition, Environmental, Government Enforcement, Finance, and Technology regulation.
The Proskauer Brief Episode 52: 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.
Trump Department of Labor Signals Likely Retreat from Biden Era Independent Contractor Classification Rule
We’ve written before about the “tennis match” that describes how, with changes in presidential parties, the Department of Labor (DOL) has proposed different tests to determine whether workers are “employes” covered by the Fair Labor Standards Act (FLSA) or “independent contractors” who are exempt from FLSA coverage. Indeed, with the new administration taking office last month, the DOL looks to be setting up a new volley in this ongoing match.
Current Status: Incoming DOL Leadership Is Reassessing the Agency’s Position
The Trump 2.0-era DOL had been slated to defend the Biden-era DOL Independent Contractor Rule (the “2024 Independent Contractor Rule”) in oral arguments before a federal appeals court in early February 2025. See Frisard’s Transp., LLC v. United States DOL, No. 24-30223.
But the DOL secured a postponement to decide how to proceed and is now due to provide the court a status update by March 25, 2025. (Frisard’s is one of five lawsuits challenging the 2024 Independent Contractor Rule.)
Likely Future Status: Farewell to the Short-Lived 2024 Independent Contractor Rule
We can expect that the DOL will drop its defense of the 2024 Independent Contractor Rule, which had rescinded the Trump 1.0-era test for independent contractor classification under the FLSA (the “2021 Independent Contractor Rule”).
Incoming DOL leadership might restore the 2021 Independent Contractor Rule or might just let courts analyze classification questions without agency guidance.
What Does This All Mean for Employers?
The back-and-forth over different administrations’ DOL rules can leave one’s head spinning. Let’s review what this latest volley will mean for employers.
If the 2021 Independent Contractor Rule is restored, it means a five-factor test to determine worker classification, with two being “core” factors: the nature and degree of the worker’s control over the work, and the worker’s opportunity for profit or loss. (By contrast, the 2024 Independent Contractor Rule being challenged uses a six-factor test, with a “totality of circumstances approach.”) The 2021 Independent Contractor Rule was generally viewed as simpler and more employer friendly, but it was no free pass, either. It made clear that actual practice dictates whether a worker is properly classified, not contractual labels or the parties’ preference.
If the DOL declines to issue guidance, courts will continue to do what they’ve long done anyway — reference their own precedents, which frankly consider the same types of factors identified in the both the 2021 and 2024 Independent Contractor Rules to determine if a worker is an employee or independent contractor. These classification analyses are fact-intensive and case-specific.
Amidst Flip-Flopping, Constant Good Advice: Be Careful When Classifying Workers as Independent Contractors
That fact-intensive judicial analysis is good reason to proceed with caution when classifying workers as independent contractors, even with an anticipated pro-employer bend at the DOL. (Indeed, the game-changing Loper Bright decision last summer means any DOL interpretation of the arguably ambiguous term “employee” in the FLSA is not entitled to judicial deference, anyway.) Therefore, it still behooves employers to ask themselves some key questions when classifying workers as independent contractors:
What is the nature and degree of control that the worker has over their own work? For example, does the company set the worker’s schedule, supervise their performance, or control pricing for their services?
What type of opportunity for profit or loss does the worker have? For example, is the worker making entrepreneurial investments in their services?
Is the relationship with the worker non-exclusive?
Is the worker providing services on a project-specific or sporadic basis, rather than indefinitely or continuously?
Are the worker’s services integral to the company’s principal business?
Do company employees perform the same type of services as the worker?
Does the worker bring a special or unique skill?
Where is the worker located? Remember, some states have very stringent so-called ABC-tests that would classify many workers as employees, even if the other factors outlined above are satisfied.
Companies uncertain about their classification decisions should reach out to counsel for advice.
Wearable Technologies and Employment Risks – EEOC Issues New Guidance
From smart watches to exoskeletons, wearable technologies are quickly changing the landscape of the American workplace. Several states and administrative agencies have responded to this shift by enacting new laws and issuing regulatory guidance concerning the use of such technologies. The latest of these responses includes a fact sheet issued by the U.S. Equal Employment Opportunity Commission (EEOC) titled “Wearables in the Workplace: Using Wearable Technologies Under Federal Employment Discrimination Laws.” The fact sheet provides guidance on how employers can use wearable technologies while maintaining compliance with various federal employment laws. More broadly, the fact sheet signals growing concern over the use of employee-monitoring technologies.
The General State of Wearable Technologies
Wearable technologies are digital devices worn or carried by employees that are used to track and collect certain types of information. Smart watches and GPS devices are common examples of wearable technologies. However, wearable technologies include a broad range of devices, such as environmental or proximity sensors which alert employees of nearby hazards, smart glasses or helmets which measure electrical activity in the brain, and exoskeletons which provide employees with increased strength and mobility.
Wearable technologies are becoming increasingly common in the workplace – and for good reason. By augmenting employees’ physical and perceptual abilities, these technologies can enhance workplace productivity and safety. Wearable technologies can be particularly valuable for companies struggling with an aging workforce or shortages of skilled labor. They can also be particularly valuable in construction, manufacturing, and warehousing industries which experience hundreds of thousands of non-fatal injuries and thousands of fatal injuries per year.
However, these benefits come with risks. One of the biggest risks is employee privacy. Several state and federal laws, such as the Americans with Disabilities Act (ADA) and state biometric information laws, protect certain information given by employees to their employers. Other risks include employee health, data security, and data interpretation. Since the wearable technologies industry is likely to expand in the future, government regulators have started to enact new laws and to adapt existing laws to account for these risks. The EEOC fact sheet on wearable technologies represents one piece related to this growing concern.
EEOC Guidance on Wearable Technologies
The EEOC’s recent guidance on wearable technologies provides several important considerations for employers. The EEOC has explained how employers can implement wearable technologies in the workplace while maintaining compliance with a variety of federal employment laws. It remains to be seen whether the EEOC under the Trump Administration will rescind or amend this guidance that was issued at the end of Biden’s Administration.
Medical Examinations and Disability-Related Inquiries
The EEOC’s guidance provides that wearable technologies may constitute “medical examinations” and/or “disability-related inquiries” in violation of the ADA.
To determine whether a test or procedure is a medical examination under the ADA, the EEOC will consider several factors, including whether the test measures an employee’s performance, whether the test is normally given in a medical setting, and whether medical equipment is used. Wearable technologies may be deemed to be conducting medical examinations when they track and collect information about an employee’s physical or mental condition, such as blood pressure monitors and eye trackers. Wearable technologies may also be deemed to be conducting medical examinations where they are conducting diagnostic testing, such as EEGs.
Disability-related inquiries, on the other hand, are questions that are likely to elicit information about an employee’s disability. Employers may be making disability-related inquiries where employees are required to provide health information, such as information about prescription drug use or a disability, in connection with using wearable technologies.
The ADA generally limits medical examinations and disability-related inquiries to situations where they are “job related and consistent with business necessity.” This may include situations where an employee makes a request for reasonable accommodation or where an employer is concerned that an employee poses a direct threat of serious harm due to their medical condition. Medical examinations and disability-related inquiries are also permitted: (1) when required under federal law or safety regulations; (2) for certain employees in positions affecting public safety, such as police officers or firefighters; and (3) when they are voluntary and part of an employee health program. If an employer uses wearable technologies to conduct medical examinations or disability-related inquiries outside of one of these exceptions, under the EEOC’s guidance, the employer risks violating the ADA.
Non-Discrimination
The EEOC’s guidance also provides that employers must not use information collected by wearable technologies to discriminate against employees based on a protected characteristic. Protected characteristics include, but are not limited to, race, color, religion, sex, national origin, age, disability, and genetic information.
For example, according to the EEOC, employers may violate non-discrimination laws by:
Using data from wearable technologies to infer that an employee is pregnant, then taking an adverse action against the employee as a result.
Relying on data from wearable technologies which produces less accurate results for certain protected classes, then taking adverse actions against those employees based on that data.
Tracking an employee to a medical center and then researching the purpose of the employee’s visit in a way that elicits genetic information.
Moreover, employers may not selectively use wearable technologies on a discriminatory basis nor use information from wearable technologies to make employment decisions which have a disproportionate adverse effect on the basis of a protected characteristic.
Reasonable Accommodations
The EEOC’s guidance also suggests that employers may need to make exceptions to the use of wearable technologies as reasonable accommodations under Title VII (religious belief, practice, or observance), the ADA (disability), or the Pregnant Workers Fairness Act (pregnancy, childbirth or related medical conditions).
Confidentiality
If an employer collects medical or disability-related data from wearable technologies, the employer, generally, must maintain that data in separate medical files and treat it as confidential medical information.
Other Laws and Guidance on Wearable Technologies
The guidance expressed in the EEOC fact sheet is similar to that presented by other administrative agencies. For example, the National Labor Relations Board’s (NLRB) former General Counsel Jennifer Abruzzo issued a memorandum in October 2022 addressing various technologies in the workplace, including wearable technologies. The memorandum warned that wearable technologies may impair or negate employees’ ability to engage in protected activity due to “the potential for omnipresent surveillance.”
In addition, several state legislatures have enacted laws regulating employee-monitoring technologies, including wearable technologies. Some of these laws regulate the collection and handling of employee biometric information.[1] Other laws regulate certain forms of employee location tracking,[2] or regulate employee surveillance more broadly.[3]
Key Takeaways
Employers who use wearable technologies in the workplace should:
Assess the type of information collected by the wearable technologies and determine whether that collection would constitute an improper medical examination or disability-related inquiry under the ADA.
Evaluate the accuracy and validity of the information collected by the wearable technologies before making any adverse employment decisions based on that information.
Refrain from using information collected by wearable technologies to discriminate against employees on the basis of a protected characteristic.
Consider whether any state or local laws govern the use of wearable technologies or the information collected by the wearable technologies.
Because the legal framework governing wearable technologies is quickly evolving, employers would be wise to consult with employment counsel to ensure their continued compliance with federal and state laws, regulations, and guidance.
Note: Since this post was written, the EEOC Fact Sheet appears to have been removed from the EEOC website. This may indicate that the new administration is not inclined to follow or issue the same guidance.
FOOTNOTES
[1] See, e.g., 740 Ill. Comp. Stat. 14/1 et seq.; Tex. Bus. & Com. Code § 503.001; Wash. Rev. Code § 19.375; H.B. 24-1130, 74th Gen. Assemb., 2nd Reg Sess. (Colo. 2024).
[2] See, e.g., Haw. Rev. Stat. § 378‑102; N.J. Stat. Ann. § 34:6B-22; Cal. Penal Code § 637.7; N.H. Rev. Stat. § 644-A:4.
[3] See, e.g., N.Y. Civ. Rights Law § 52-C; Conn. Gen. Stat. Ann. § 31-48d.
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TPS Program Updates
This post serves as a regularly updated resource to keep employers informed regarding TPS designations, extensions, cancellations, and other policy changes. This post was last updated on February 3, 2025.
Venezuela
More than 600,000 Venezuelan citizens in the United States have benefitted from Temporary Protected Status (TPS) since 2021. In January 2025, the program was extended until October 2, 2026, by then Department of Homeland Security (DHS) Secretary Alejandro Mayorkas. TPS allows Venezuelans to remain in the United States and work lawfully because the conditions in Venezuela are not safe for them to return to: limited access to basic services, collapse of the healthcare system, dilapidated infrastructure, and the ongoing economic crisis.
On January 29, 2025, Kristi Noem, the new DHS Secretary, reversed the extension of TPS for Venezuela. When a TPS program is allowed to expire, a 6-month extension of TPS and work authorization is automatically granted, resulting in the final date of Venezuelan TPS of April 2, 2026. Secretary Noem reversed the extension even though the State Department’s Travel Advisory for US citizens interested in traveling to Venezuela is “Level 4 – Do Not Travel”.
When TPS expires for Venezuelans on April 2, 2026, they will revert to the US immigration status they held prior to the TPS designation, unless they have acquired another immigration status allowing them to lawfully remain in the United States. For many in this program, their prior underlying immigration status has expired, leaving them unable to lawfully remain in the United States and work, making them subject to removal from the United States.
Saint Paul, Minnesota Enacts “Wage Theft” Ordinance
Beginning January 1, 2025, the City of St. Paul, Minnesota’s Wage Theft Ordinance went into effect. The Ordinance largely incorporates the State of Minnesota’s existing wage theft legislation. However, similar to the Minneapolis Wage Theft Prevention Ordinance, effective in 2020, the City of St. Paul’s new Ordinance contains additional employer obligations for employers with employees working within the geographic boundaries of the City of St. Paul.
Employee Notice Information Required
Minnesota state law requires employers to provide detailed information, in writing, to Minnesota employees at the start of their employment and provide written notice of related changes to employees during employment. As of January 1, 2025, pursuant to Ordinance the notice for covered St. Paul employees must contain the following additional information:
The date on which employment is to begin;
A notice of the City of St. Paul’s minimum wage rates and an employee’s entitlement to such rates;
If applicable to the employee, a statement that the sharing of gratuity is voluntary; and
The overtime policy applicable to the employee’s position, if any, including when overtime must be paid and at what rate[s].
Under the Ordinance, employers may provide the information in the notice by reference to an employee handbook, collective bargaining agreement, or similar document, provided the employee is directed to the specific sections in which such information is contained.
In addition to providing the notice to all new hires, employers must provide the notice to all current, covered employees starting January 1, 2025, if the employer has not already provided the information contained in the notice to the employee. Similar to the state notice, the St. Paul notice must be signed by the employee and any change must be provided to the employee in writing before the change takes effect. Per the Ordinance, however, employers must additionally retain a copy of the initial notice as well as any written changes and records of when the employee received the notice(s).
Employers must provide employees with the notice in the language previously used for communication, or in a different language if the employer is aware the employee prefers it, as long as the Department has published notices in that language.
New Notice Poster Requirements
Annually, employers are required to notify employees of their right under the Ordinance. Employers are also required to post a notice of employees’ rights at the workplace/jobsite, in English and any language spoken by employees at the workplace/jobsite. Where the notice cannot be placed at the workplace/jobsite, employers may satisfy their obligations under the Ordinance by providing physical or electronic copies to each employee or posting the notice of rights on a web or app-based platform.
Additionally, employers must include a notice of employee rights in any handbook provided to employees.
Employers should assess their compliance obligations under the Ordinance and revise any existing handbooks and notices accordingly.
Love Actually (Might Cause Legal Troubles for Employers)
Valentine’s Day is around the corner, so the time is right to consider the legal pitfalls of office romances.
Quick Hits
A romantic entanglement between coworkers that ends badly could provoke a harassment or retaliation lawsuit.
Many employers discourage or prohibit dating between supervisors and employees.
A number of strategies can help employers reduce the legal risk of workplace romances.
While love can be a “many splendored thing,” workplace romances may sometimes lead to harassment lawsuits, retaliation lawsuits, workplace disruptions, or loss of valuable talent. While workplace romances are not per se illegal, relationship problems sometimes lead to unwanted attention, misunderstandings, or even unprofessional behavior in the workplace. Because employers are required to ensure that their employees aren’t subject to sexual harassment or retaliation at work, these situations, while ostensibly personal, can lead to company involvement.
While employers certainly don’t have a direct say in personal relationships, employers can implement policies that discourage or prohibit romantic relationships at the workplace, especially those between supervisors and supervisees. Such policies aim to prevent favoritism and conflicts of interest, especially where a supervisor would be in a position to help or harm their sweetheart’s (or ex-sweetheart’s) career either during a relationship or after the relationship has ended.
Finally, employers can direct employees to inform HR about workplace relationships to confirm that those relationships are consensual. Some employers ask dating employees to sign a “love contract,” asserting that their relationship is consensual and not sexual harassment. Such documentation protects both the company and the participants in the relationship.
Next Steps
To mitigate the legal risk of office romances, employers may want to consider:
reminding employees about written policies against harassment that occurs in person or online;
requiring professional behavior at the workplace, communicating this policy clearly with specific examples of what is (and is not) considered professional behavior, and stating the specific consequences for those who display unprofessional behavior at the workplace or work-related events;
providing anti-harassment training during work hours, and reminding workers that emails, texts, and other communications sent on the employer’s devices and networks may be monitored by the employer; and
requiring workers to report sexual harassment or retaliation to HR, a manager, or a confidential hotline, and reminding managers that it’s illegal to retaliate against an employee for reporting harassment.
The Trade War Begins with Canada, China, and Mexico
On February 1, 2025, President Trump declared a national emergency based upon the threat posed by undocumented foreign workers and drugs entering the United States. The White House has published a fact sheet outlining steps to address the threat by implementing (i) a 25% additional tariff on imports from Canada and Mexico, (ii) a 10% additional tariff on imports from China, and (iii) a carveout for a lower 10% tariff for energy resources from Canada (see Fact Sheet: President Donald J. Trump Imposes Tariffs on Imports from Canada, Mexico and China – The White House).
President Trump declared the national emergency pursuant to the International Emergency Economic Powers Act (IEEPA) and the National Emergencies Act. This action marks the first time a President has used the IEEPA to impose tariffs. President Nixon had used a precursor law to impose 10% tariffs on all imports in 1971 in order to avoid a balance of payments crisis resulting from ending the U.S. dollar’s gold standard (see prior alert Can the President Impose Tariffs Without Congressional Approval?).
President Trump issued Executive Orders imposing these additional tariffs on Canada, China, and Mexico (see link to Canada EO, China EO (unpublished), and Mexico EO (unpublished)).[1] The Executive Orders generally provide that the IEEPA national security tariffs may be removed if Canada and Mexico demonstrate adequate steps have been undertaken to alleviate the illegal migration and illicit drug crisis through cooperative actions, and China demonstrates adequate steps have been taken to alleviate the opioid crisis through cooperative actions.
A quick overview of five key initial questions:
1. When do the IEEPA national security tariffs take effect?
These IEEPA national security tariffs will be collected at the ad valorem rate of duty beginning 12:01 am ET, Tuesday, February 4, 2025.
2. How do I know if my import is subject to the IEEPA national security tariffs?
The Executive Orders reference “all articles” suggesting that the IEEPA national security tariff will apply to all merchandise imported from Canada, China, and Mexico; excepting that, there will be a carveout for energy from Canada, with the definitions based upon section 8 of Executive Order 14156 of January 20, 2025 (Declaring a National Energy Emergency). The necessary modifications to the Harmonized Tariff Schedule of the United States will be updated by the Department of Homeland Security and published in the Federal Register.
3. How is the IEEPA national security tariff rate calculated and applied?
The IEEPA national security tariff will be collected at an ad valorem rate based upon the entered value of the merchandise, meaning that the IEEPA national security tariff will be calculated on the entered value of the merchandise and simply added to any other duty applicable on the subject merchandise.
4. Who is responsible for paying the IEEPA national security tariff?
The importer of record is responsible for paying all duties to U.S. Customs and Border Protection. There is no change to this requirement.
5. Is there a process to apply for exclusions from IEEPA national security tariffs?
There have been no stated exemptions or processes for exclusions from the IEEPA national security tariffs, but importers may continue to review mitigation strategies for application (see prior alert Preparing for Tariff Increases – Mitigation Strategies: Miller Canfield).
In addition, the Executive Orders further provide that:
There is no duty drawback available for the covered merchandise, i.e. the refund of duties, taxes, and fees paid on imported merchandise subsequently exported or destroyed;
Merchandise must be admitted as “privileged foreign status,” meaning the merchandise remains subject to the tariff based upon its imported state, regardless of whether the classification changes in a Free Trade Zone, i.e. no avoiding the tariff by importing the merchandise into a Free Trade Zone;
There is no de minimis treatment available under Section 321, i.e. duty free treatment for shipments below $800; and
The President may increase or expand in scope the tariffs imposed under the Executive Orders upon retaliation against the United States by Canada, China, or Mexico through the application of tariffs or similar.
Because the imposition of additional IEEPA national security tariffs remains in flux, importers should carefully monitor this situation. For up-to-date advice and assistance on mitigation options to tariff exposure applicable to your business, please contact your Miller Canfield attorney or one of the authors of this alert.
[1] Press reports indicate that the China EO and Mexico EO have been signed and are similar in form, but as of the time of this publication the China EO and Mexico EO have not yet been posted to www.whitehouse.gov.
New Massachusetts Employer EEO Reporting Begins Monday, February 3, 2025
As we previously reported, certain Massachusetts employers will now be required to annually submit Equal Employment Opportunity (EEO) reporting to the state. Massachusetts Governor Maura Healey signed the legislation into law in July 2024 and the first deadline arrives Monday, February 3, 2025. The Executive Office of Labor and Workforce Development recently issued FAQs clarifying what’s required.
Who Is Impacted: Employers with 100 or more employees in Massachusetts at any time during the prior calendar year and who are already required to submit EEO reports to the U.S. Equal Employment Opportunity Commission (EEOC).
What: Covered employers must submit copies of their EEO-1, EEO-3, and EEO-5 reports to the state secretary. Next year, they will need to submit copies of their EEO-1 and EEO-4 reports. Employers should file the same copy of the EEO report that they most recently filed with the EEOC. Large, multi-state employers should submit the report covering their Massachusetts establishments.
When: The EEO-1 reports must be submitted annually by February 1, 2025, and the other reports are due biannually by the same date with EEO-3 and EEO-5 reports due this year and EEO-4 reports due next year. Since February 1st falls on a Saturday this year, the reports are due Monday, February 3, 2025.
Where: Reports can be submitted to the Secretary of State’s office through a web portal. They can be submitted in PDF, JPG, or PNG format.
The new law additionally requires employers with 25 or more employees in Massachusetts to include salary ranges in job postings. This requirement was originally set to take effect on July 31, 2025 but the posted FAQs indicate that it has been pushed back to October 29, 2025. The state has also indicated it will publish additional guidance on these new job posting requirements at a later date.
Employers Who Administer PFML Programs Get Much-Needed Guidance from IRS
Takeaways
The Guidance clarifies the federal income and employment tax treatment of contributions and benefits under state-funded PFML Programs.
It does not apply to privately insured or self-insured arrangements.
Affected employers should work with their in-house finance and payroll teams to ensure that payments into the funds are treated consistent with the Guidance and that employee payments and employer pick-up payments are properly reported as taxable wages (taking into account the 2025 transition guidance).
Related links
FAMLI Taxability Letter FINAL (2).pdf
Revenue Ruling 2025-4
Article
In response to taxpayer and state government requests, including a 2024 letter from governors of nine states imploring the Internal Revenue Service (IRS) to clarify the federal tax treatment of premiums and benefits under state paid family and medical leave programs (PFML Programs), the IRS issued Revenue Ruling 2025-4 (Guidance) which clarifies the federal income and employment tax treatment of contributions and benefits under state-funded PFML Programs.
Any employer who administers one or more PFML Programs should continue reading this article.
What Is the Relevance of the Guidance?
Thirteen states and the District of Columbia have already adopted mandatory PFML Programs and more states are considering them. Each state PFML Program is unique, but generally PFML Programs provide income replacement for a certain number of weeks for employees who are absent from work for specified family reasons, such as the birth of a child, and/or medical reasons, such as the employee’s own serious health condition.
Employers and states have been unsure of the federal income and employment tax treatment of the payments into the funds and the benefits being paid from the state funds. The Guidance helps fill in some of these gaps.
As an alternative to contributions into a state fund, many states permit employers to establish and maintain private plans providing comparable benefits at comparable cost to employees. Such private plans may be insured or self-insured.
Notably the guidance does not address the federal tax treatment of employer or employee contributions to privately insured or self-insured arrangements designed to comply with PFML Program obligations or to benefits paid under such programs.
Thus, while some of the analysis in the Guidance may be applicable in analyzing the tax consequences under such arrangements, the Guidance is not dispositive ragrding such arrangements.
What Does the Guidance Say?
How Are Employer Contributions Treated for Federal Tax Purposes?
State-mandated employer contributions to a state fund under a PFML Program are deductible by the employer as an excise tax.
Employees are not required to include the value of these employer payments in their compensation.
Observation: As noted above, the Guidance does not apply to privately insured or self-insured arrangements. Since the Guidance bases the exclusion of the employer payments on the fact that the payments are an excise tax, employer premium payments and coverage under privately insured and self-insured arrangements likely would not be governed by the same analysis. Until further IRS guidance is issued (which may be a while given the change in administration), employers should carefully consider whether such employer-paid premiums or coverage should be treated as taxable wages to their employees.
How Are Employee Contributions Treated for Federal Tax Purposes?
Employee contributions to a state fund are wages reportable on an employee’s Form W-2. The Guidance notes that an employee is eligible for a potential income tax deduction for such contribution.
Observation: The Guidance treatment of employee contributions as taxable wages would reasonably apply to privately insured or self-insured arrangements as well. However, such employee payments likely would not be eligible for a potential tax deduction as such payments would not appear to qualify as payments of state income taxes.
How Are Employer Pick-Up Contributions Treated for Federal Tax Purposes?
An employer pick-up contribution occurs where an employer pays from its own funds all or a portion of its employees’ otherwise mandatory contributions (as opposed to withholding such amounts from the employee’s wages).
Employers may deduct such expenses as ordinary and necessary business expenses and must include such payments in wages on employees’ Forms W-2. The Guidance provides that employees are eligible for potential tax deductions for such contributions.
How Are PFML Program Benefits Taxed for Federal Tax Purposes?
The Guidance distinguishes benefits paid for paid family leave (PFL) and paid medical leave (PML).
PFL Benefits
PFL benefit payments are fully taxable and must be included in an employee’s income, but benefit payments are not wages. For benefit payments from state funds, the state must file with the IRS and furnish employees with a Form 1099 reporting the PFL payments.
Observation: For employers who pay into a state fund, generally the state has this reporting obligation rather than the employer. Notably, under the Guidance, employees do not have a “basis” equal to the employee and employer pick-up contribution payments previously treated as taxable compensation.
PML Benefits
The Guidance analogizes PML payments to disability payments and provides tax guidance that is consistent with the federal tax rules that apply to disability payments.
Accordingly, under the Guidance, generally PML benefits attributable to employer contributions are includible in employee gross income and are treated as wages.
However, PML benefits attributable to employee contributions and employer pick-up contribution payments are not includable in an employee’s gross income.
Observation: The Guidance indicates that the state must follow the sick-pay reporting rules that apply to third-party payors (with insurance risk). Whether the states are able to modify their systems to comply with these requirements remains to be seen. However, employers who privately insure or self-insure these arrangements may be able to glean insights from the Guidance, particularly in the way that the Guidance applies the Internal Revenue Code’s rules regarding disability pay to PML.
When Is Compliance Required?
The Guidance notes that:
“Calendar year 2025 will be regarded as a transition period for purposes of IRS enforcement and administration of the information reporting requirements and other rules described below. This transition period is intended to provide States and employers time to configure their reporting and other systems and to facilitate an orderly transition to compliance with those rules, and should be interpreted consistent with that intent.”
Of note to employers who pay into state funds, for calendar year 2025, the employers are not required to treat amounts they voluntarily pay into a state fund (that would otherwise be required to be paid by employees) as wages for federal employment tax purposes.
What Are the Employer Takeaways?
Employers who administer PFML Programs (other than through privately insured and self-insured plans) now have definitive guidance concerning the treatment of payments and benefits. Such employers should work with their in-house finance and payroll teams to ensure that payments into the funds are treated consistent with the Guidance and that employee payments and employer pick-up payments are properly reported as taxable wages (taking into account the 2025 transition guidance). Generally, the states will be responsible for ensuring benefit payments are properly reported and taxed.
While the Guidance does not apply to privately insured and self-insured plans, it does provide employers participating in such arrangements with insight into the IRS’s analysis of these arrangements.
NLRB Shake-Up Continues: Trump Fired Acting General Counsel
On February 1, 2025, five (5) days after President Trump fired NLRB Member Gwynne A. Wilcox, and NLRB General Counsel Jennifer A. Abruzzo, President Trump fired the NLRB’s second-ranked attorney, NLRB Deputy General Counsel Jessica Rutter. Rutter briefly served as the NLRB Acting General Counsel after Abruzzo’s termination on January 27, 2025. As of this posting, it is not clear who will be appointed to serve as the new Acting General Counsel. The Senate must confirm any eventual appointee by President Trump to serve as the NLRB General Counsel.
The Board is now officially without a quorum and, while Regional Offices will continue to operate, without an administrative head of the organization equipped to make major decisions regarding the investigation and prosecution of unfair labor practice cases.
Legal Precedents Offer Novel Ways for Federal Employee Whistleblowers to Fight Retaliation
The system of anti-retaliation protections for federal employees who blow the whistle or speak out about their agency’s conduct is infamously weak. Under the Whistleblower Protection Act (WPA) and other laws, federal employees seeking relief for an adverse action taken against them for whistleblowing must rely on the Merit Systems Protection Board (MSPB). This quasi-judicial entity is plagued by delays and threatened by politicization.
However, there are several potentially effective but under-utilized legal precedents that can permit federal employees facing retaliation to obtain relief in federal court and not solely rely on the WPA for relief. These precedents have been established by the U.S. Courts of Appeal for the District of Columbia and Fourth Circuits, and offer novel ways to have cases heard in federal court or otherwise bolster retaliation complaints. By utilizing these methods, federal employees can feel more confident and in control, knowing they have better chances of gaining meaningful relief if they face retaliation for whistleblowing, oppose discrimination, prevent the violation of their privacy, and enforce their rights to engage in outside First Amendment protected speech.
First Amendment Rights for Federal Employees
The landmark 1995 case Sanjour v. EPA upheld the First Amendment rights of federal employees to criticize the government in activities outside their employment. This created a legal precedent that provides a strong shield for federal employees to make First Amendment challenges to agency regulations stifling whistleblowing when made outside of work. The case permits federal employees at the GS-15 level or below (higher level federal workers were not discussed in the decision, as the applicant for relief was at the GS-15 level) to seek pre-enforcement injunctive relief if a rule or regulation (which would include an Executive Order) has an improper chilling effect on First Amendment protected speech of an employee’s outside speaking or writing.
William Sanjour was the branch chief of the Hazardous Waste Management Division within the EPA who challenged rules written by the Federal Office of Government Ethics that restricted EPA workers’ rights to speak to environmental community groups.
Because the EPA had warned Sanjour that his acceptance of a cost reimbursement for travelling to North Carolina to give a speech critical of EPA policies concerning waste incineration was in violation of a regulation and could result in adverse action, Sanjour could challenge the “chilling effect” on speech of the government’s rule. The D.C. Circuit upheld the constitutional challenge to a regulation that had a chilling effect on First Amendment protected speech.
If he had waited until he was subjected to retaliation he would have been required to use the WPA to remedy the adverse action. But because Sanjour was challenging an unconstitutional chilling effect of a government regulation, he could obtain injunctive relief directly in federal court and avoid the long delays and other problems when pursuing a case before the presidentially appointed MSPB.
The key precedent established in Sanjour v. EPA, by the U.S. Court of Appeals for the District of Columbia Circuit, was that the Court could issue a nationwide injunction preventing the implementation of the regulation because of its chilling effect on the First Amendment right of employees to criticize the federal government. The court recognized that federal employee speech to the public on matters of “public concern” was protected under the First Amendment, and served a critical role in alerting the public to vital issues:
“The regulations challenged here throttle a great deal of speech in the name of curbing government employees’ improper enrichment from their public office. Upon careful review, however, we do not think that the government has carried its burden to demonstrate that the regulations advance that interest in a manner justifying the significant burden imposed on First Amendment rights.”
The precedent in Sanjour v. EPA means that federal employees who plan on making public statements (outside speaking or writing on matters of public concern) can seek a federal court injunction preventing future retaliation based on their First Amendment rights, if they have a reasonable basis to believe that their government employer would take adverse action against them if they made the public disclosures or violated the regulation. Significantly, First Amendment protected speech should cover criticisms of government policy. Policy disagreements alone may not even be covered under the WPA.
The Sanjour case covers outside speaking and writing, not workplace activities. It affirms a federal employee’s right to engage in conduct such as TV interviews, writing op-eds, and speaking before public interest groups, even if the speech engaged in is highly critical of the government or their government-employer. However, employees would have to give a disclaimer making sure that the public understood they were speaking in their private capacity, and the employee could not release confidential information.
Mixed Cases Combining Title VII Discrimination with Whistleblower Retaliation
Precedent established by two landmark federal employee whistleblower retaliation cases holds that federal employees may have their WPA retaliation case heard in federal court in instances where it is a “mixed case” that also involves discrimination or retaliation under Title VII of the Civil Rights Act. The scope of retaliation covered under Title VII is broader than the coverage under the WPA, and by combining both claims a federal employee can significantly increase both their procedural and substantive rights.
Specifically, when an employee is a member of a protected class (Title VII covers race, religion, sex, national origin, among other classes) it is often hard to distinguish whether retaliation originates from their membership in a protected class, their filing complaints of retaliation under Title VII, or their filing complaints of retaliation covered by the WPA. There is often significant overlap in these types of cases.
While federal employees’ retaliation cases under the WPA are forced to remain with the MSPB, under the Civil Service Reform Act, discrimination cases (and cases of retaliation based on protected activities or whistleblowing covered under Title VII) may be removed to federal court if the MSPB does not issue a final ruling within 120 days.
Dr. Duane Bonds was a top researcher at the National Institutes of Health on sickle cell disease who blew the whistle on the unauthorized cloning of participants’ cells. Dr. Bonds faced retaliation for blowing the whistle, including sex discrimination, harassment in the workplace, and eventual termination.
In 2011, the United States Court of Appeals for the Fourth Circuit ruled in Bonds v. Leavitt that Dr. Bonds’ retaliation and discrimination complaint must be considered a “mixed case” and heard together. Under the Civil Service Reform Act, the court allowed Dr. Bonds to pursue her mixed discrimination and retaliation case before a federal court, and she was not required to continue to pursue her WPA case before the MSPB.
In its ruling in Bonds v. Leavitt, the Fourth Circuit cited an earlier D.C. Circuit ruling in Ikossi v. Department of Navy, which similarly allowed a female whistleblower to pursue a “mixed case” alleging both retaliation and discrimination in federal court. Kiki Ikossi was retaliated against after filing complaints to the Navy Research Lab HR Office for workplace gender discrimination in the early 2000s.
The Bonds and Ikossi decisions are controlling precedent in both the District of Columbia and Fourth Circuit judicial circuits. Thus, these precedents would be binding of federal courts in the District of Columbia, Maryland, and Virginia.
The precedents in Bonds v. Leavitt and Ikossi v. Department of Navy mean that federal employees who face discrimination in addition to retaliation may combine their complaints and pursue their case in federal court if the MSPB delays a ruling (which is the norm given its backlog of cases). However, the rules permitting a mixed case are complex, and require employees to identify their invocation of that right when filing an initial complaint. By carefully following the complex timing and filing requirements mandated under both the WPA and Title VII an employee can have his or her whistleblower case can be heard in federal court, and avoid many of the problems associated with cases pending before the MSPB.
Privacy Act Rights for Federal Employees
Linda Tripp is most famous for her role in the impeachment of President Clinton. However, her retaliation case established a strong precedent protecting federal employees under the Privacy Act. Tripp successfully challenged the Department of Defense when it illegally released confidential information from her security clearance file.
The illegally released file was an act of retaliation for her role in presidential impeachment proceedings. However, Tripp did not seek relief under the WPA. Instead, she was able to bring a Privacy Act complaint before a federal court. The Privacy Act covers requests for information concerning yourself, and federal employees are covered under the law with the same rights as other non-government employees. The Privacy Act prevents federal agencies from collecting or maintaining information based on an individual’s First Amendment activities, it prevents the improper disclosure of information to various persons, including any personal information a government employee or manager may provide to individuals outside of the federal government.
The Privacy Act requires the federal government to provide applicants access to all government records related to the applicant that are not restricted from access under very specific exemptions. Once obtaining the documents a the requestor can request correction of any inaccurate information, or inclusion into a file of the requestor’s statement as to why the documents are not accurate. It requires agencies to maintain a record of who they share information with. The law prohibits improper leaks of information. Moreover, of particular interest to whistleblowers, the law prohibits the government from maintaining records related to any person’s First Amendment protected activities.
The law provides all persons, including federal employees, the right to file a lawsuit in federal court to obtain access to their files and seek damages for the actual harm caused by any leaks or violations of the law. A court can also order an agency to correct information in government files that are inaccurate and prevent agencies from maintaining information in violation of law. Persons who filed successful Privacy Act complaints are entitled to attorney fees and costs related to their lawsuit.
Thus, the Privacy Act offers numerous potential avenues for a whistleblower to use those provisions to obtain protection, information, and relief. For example, as in the Tripp case, when the federal government leaked information covered under the Privacy Act to discredit her, Tripp successfully pursued a Privacy Act for damages and fees. She could attack the illegal retaliation caused by the leak of information through the Privacy Act, and avoid the many limitations of the WPA.
Conclusion
For decades, attempts to reform the WPA and give federal employees the right to have whistleblower retaliation cases heard in federal courts have stalled. Over the years, however, legal challenges to retaliation that avoid the limits of the WPA have produced strong precedents allowing specific federal employees to pursue cases in federal courts as long as they strictly follow the correct technical procedures required under each of the specific law or Constitutional provision.
Federal employee whistleblowers are essential to rooting out fraud, abuse, and misconduct throughout the government. Leveraging these strong legal precedents, which can supplement remedies offered under the WPA, can offer critical avenues to protect federal employees from retaliation and ensure they receive the proper relief when it occurs.
Useful Resources
Government Webpages:
Overview Of Federal Sector EEO Complaint Process
U.S. Office of Special Counsel
U.S. Merit Systems Protection Board
Privacy Act of 1974