Regulators Pause Mental Health Parity Rules Enforcement
Federal regulators recently indicated they will not enforce parts of the final regulations issued in September 2024 under the Mental Health Parity and Addiction Equity Act (MHPAEA) and may soon propose new rules altogether.
Quick Hits
A federal judge recently paused litigation over the 2024 mental health parity regulations focused on nonquantified treatment limitations.
The Trump administration is considering rescinding or adjusting the rules.
The federal agencies will not enforce the 2024 rules in the short term.
On May 12, 2025, the U.S. District Court for the District of Columbia agreed to stay a lawsuit brought by the ERISA Industry Committee to block the 2024 rules related to nonquantitative treatment limitations (NQTLs).
The U.S. Departments of Health and Human Services, Labor, and Treasury requested a stay in the case, telling the court that they are considering rescinding or modifying the 2024 rules. They issued a nonenforcement policy on the portions of those regulations that took effect January 1, 2025, or would take effect January 1, 2026.
The agencies also directed health plans to continue to rely on the 2013 MHPAEA regulations and prior subregulatory guidance.
Background on the Case
Under the federal Mental Health Parity and Addiction Equity Act (MHPAEA), if a health plan offers mental health and substance use disorder benefits alongside medical and surgical benefits, it must provide the mental health and substance use disorder benefits in a manner that is no more restrictive than the medical and surgical benefits.
On September 23, 2024, the federal government issued final rules requiring health plans to provide “meaningful benefits” for mental health or substance use disorders in coverage categories where medical or surgical benefits are also provided. Meaningful benefits cover core treatments, defined as standard treatments or interventions indicated by “generally recognized independent standards of current medical practice.” These regulations require that a plan fiduciary certify that it undertook a prudent process to select a qualified service provider to perform the comparative analysis.
On January 17, 2025, the ERISA Industry Committee sued the three federal agencies to block the 2024 regulations.
Next Steps
Employers may wish to review their mental health and substance use disorder coverage in order to ensure compliance with the MHPAEA. While parts of the 2024 mental health parity rules will not be enforced for now, employers may wish to anticipate that the agencies could propose changes to the 2024 rules or propose new rules in the future.
Importantly, the requirement to perform and document a comparative analysis of a plan’s NQTLs still exists.
SHOW CAUSE: Verizon’s Choice to Blow Off TCPA Subpoena May Cost It
Quick on for you this AM.
So a guy named Jason Crews brought a TCPA suit in Arizona.
He issued a subpoena to Verizon back in December to obtain records of allegedly illegal calls made to this number.
According to Crews Verizon received the subpoena and simply refused to respond to it– its employees told him “Verizon would not comply because the subpoena was not a court order.”
Hmmmm.
Crews asked the Court to hold Verizon in contempt for failure to respond to the subpoena and also asked the Court to require Verizon to better train it employees.
Well in Crews v. Bermudez, 2025 WL 1411900 (D. AZ May 15, 2025) the Court granted the Plaintiff’s request in part– it ordered Verizon to show up and explain why it had not responded to the subpoena and why it should not be held in contempt.
Eesh.
On the other hand the Court did refuse to issue an order requiring further training of Verizon employees.
Generally speaking it is not a good idea to fail to respond to a subpoena in TCPA cases– or any case really. Federal judges have tremendous power to make your life miserable!
Ex Professor Accuses Penn State of Reverse Discrimination and Retaliation
Former Penn State writing professor Zack De Piero has filed a lawsuit against the university, alleging reverse discrimination and retaliation following his opposition to social justice and antiracist initiatives on campus.
Background
De Piero, a 40-year-old professor who identifies as white, claimed that his supervisors subjected him to embarrassment, harassment, and discrimination through various social justice and antiracism programs. He specifically objected to workshops and training sessions that required him to acknowledge “white privilege” and identify manifestations of “white supremacy” in culture and writing.
After lodging an internal complaint with the university, De Piero began to challenge the discourse on race during an online training session. Subsequently, other participants in the training filed a complaint against him, accusing him of bullying and harassment. The university’s investigation concluded that no bias or discrimination had been directed at De Piero or similarly situated individuals. However, it found that De Piero had engaged in aggressive and disruptive behavior. He received a written notice advising that his behavior was unacceptable and warning that future similar conduct could result in disciplinary action. His subsequent performance review reflected a decrease in two areas due to his disruptive behavior, although he received high marks for overall performance. Two months after receiving the review and shortly before the new school year began, De Piero resigned, later claiming constructive discharge.
The Suit
The lawsuit, initially filed in June 2023, alleges racial discrimination, a hostile work environment, and retaliation for exercising his First Amendment rights, in violation of the Civil Rights Act Title VII, 42 U.S.C. § 2000; 42 U.S.C. § 1983; 42 U.S.C. § 1981, and Pennsylvania’s Human Relations Act. The university responded with a motion to dismiss, arguing that engaging in uncomfortable discussions about race does not equate to race discrimination.
Ruling
On January 1, 2024, the Court partially granted and partially denied the defendants’ motion to dismiss. The Court reiterated the standards for each count alleged, noting that a claim of disparate treatment under Title VII, Section 1981, and the PHRA requires the plaintiff to demonstrate (1) membership in a protected class; (2) qualification for the position; (3) suffering an adverse employment action; and (4) circumstances suggesting intentional discrimination. The Court determined that the warning issued to De Piero was not disciplinary and that the negative performance rating did not materially alter his job conditions, as his contract was renewed and he received a raise.
On April 16, 2025, the Court dismissed the remainder of the case, granting Penn State’s motion for summary judgment. The Court rejected De Piero’s argument that institutional bias against his views on race created a hostile work environment, finding no evidence that his treatment deviated from legitimate workplace standards. The Court concluded that no reasonable jury could determine that De Piero was reprimanded or terminated due to his complaints.
The Legal Landscape
Given the recent ruling by the Supreme Court, which eliminated affirmative action in college admissions, the Trump Administration’s dismantling of DEI programs, and the current position of the Equal Employment Opportunity Commission’s (EEOC) focus on rooting out illegal DEI initiatives, claims such as these are expected to rise.
How Modern Workplaces Navigate Generational Shifts: One-on-One with Jeff Landes [Video]
Generational shifts in the workplace bring unique challenges and opportunities for employers striving to build productive and engaged teams.
In this one-on-one conversation, Epstein Becker Green attorney Jeff Landes joins George Whipple to explore strategies for managing and motivating the emerging workforce, with a particular focus on “Gen Z” employees. Jeff examines how organizations can adapt to generational expectations, including fostering transparency, providing meaningful feedback, and supporting mental health and wellness initiatives.
The discussion also addresses the evolving dynamics of hybrid and remote work, underscoring the importance of consistent performance management, clear communication, and innovative accommodations. From creating inclusive environments to navigating requests for flexible schedules, Jeff offers practical advice for handling the complexities of a modern workforce while maintaining operational efficiency.
Listen now to gain actionable ideas for workforce development and learn how to create a workplace culture that aligns with both employee needs and business goals.
Departments Press Pause on Final Mental Health Parity Regulations
Yesterday, the Departments of Labor, Treasury, and Health and Human Services announced a non-enforcement policy with respect to final regulations issued under the Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”) in September 2024. The Departments recently indicated that this policy was imminent when they requested that litigation challenging the final regulations be paused while they considered rescission or modification of the regulations.
The 2024 final regulations, which we blogged about here, included sweeping changes that would have impacted virtually all group health plans that cover mental health and substance use disorder (MH/SUD) benefits.
What the non-enforcement policy does and does not do
The non-enforcement policy states that the Departments will not enforce the final regulations issued in 2024. However, this applies only to the portions of the 2024 final regulations that were “new” in relation to the 2013 final regulations.
What remains in effect: Thus, plan sponsors should keep in mind that MHPAEA and the final regulations issued in 2013 (including subsequent sub-regulatory guidance, such as agency FAQs) remain in place and should continue to be relied upon for guidance. Additionally, the statutory obligation for a plan to maintain non-quantitative treatment limitation (NQTL) comparative analyses for MH/SUD benefits and provide them to the Departments upon request remains in effect. (This statutory obligation was added as part of the Consolidated Appropriations Act, 2021.)
What is paused: The significant changes in the 2024 final rule that were new compared to the 2013 final rule—including the fiduciary certification requirement, the “meaningful benefits” standard, and revised standards for evaluating NQTLs—are all paused for the time being while the Departments reconsider their mental health parity compliance and rulemaking approach.
It bears noting that the Departments stated not only that they intend to reconsider the final rule, but also that they are conducting a “broader reexamination of each department’s respective enforcement approach.” This, and other language in the non-enforcement policy, suggests that the Departments will be looking at whether changes are necessary to balance the important goals of MHPAEA and the burdens that the current enforcement has imposed on plan sponsors.
How long does the non-enforcement policy last?
The Departments will not enforce the 2024 final rule or pursue enforcement actions based on a failure to comply that occurs prior to the final decision in the litigation, plus an additional 18 months. Plan sponsors should monitor subsequent updates from the Departments to confirm compliance.
* * *
Takeaways for group health plan sponsors: Given the challenges plan sponsors have faced in connection with the implementation of the current regulatory and enforcement scheme, the non-enforcement policy is likely welcome news. However, plan sponsors should remain mindful that the 2013 final rule and MHPAEA statutory obligations are still in place and not impacted by the non-enforcement policy. For now, while plan sponsors can pause compliance efforts related to the 2024 final rule, plans may want to consider pressing ahead with any current compliance projects related to the 2013 final rules and statutory obligations related to NQTL comparative analyses.
Employer Compliance with Illinois E-Verify Law Still Necessary Despite DOJ Lawsuit
Takeaways
The DOJ suit against Illinois to block a new state law argues that Illinois is intruding on federal immigration authority.
Illinois’ law requires E-Verify employers to post state notices and give employees advance notice of any Form I-9 inspections, among other obligations not required under federal law.
A similar California law (AB 450) was upheld, which suggests Illinois’ employee-notice requirements might survive the DOJ’s challenge.
In its complaint in United States v. State of Illinois, No. 1:25-cv-04811, the U.S. Department of Justice (DOJ) alleges that Illinois’ new E-Verify amendment (SB 508) “encroaches on federal immigration authority” by layering state rules on the employment verification process.
SB 508 amended the Illinois Right to Privacy in the Workplace Act effective Jan. 1, 2025, imposing new obligations on any employer enrolled in E-Verify. Illinois now mandates employee notifications that go beyond federal requirements. For example, employers must display both federal and state E-Verify notices at their workplace and provide written notice to all employees within 72 hours whenever the employer receives notice of a government inspection of I-9 employment eligibility forms. Illinois also requires training for staff who use E-Verify and formal attestations of compliance to the state. Failure to meet these state requirements can trigger state civil fines.
DOJ’s Legal Challenge
The DOJ contends that Illinois is stepping into the federal government’s territory of immigration enforcement. In a press release, officials argue that SB 508 “discourages and complicates the use of E-Verify” by imposing confusing rules and threatening hefty penalties on employers. The complaint asserts that the Illinois law violates the Supremacy Clause of the U.S. Constitution and conflicts with the Immigration Reform and Control Act’s federal scheme for employment verification. DOJ officials caution that Illinois’ advance notice requirements (like alerting employees of government I-9 audits) could undermine federal immigration enforcement, for instance, by giving unauthorized workers warning that they may be losing their positions. Illinois’ law even prescribes the time, place, and manner of employee notifications, which DOJ argues goes beyond what federal law permits.
Comparison to California’s AB 450
California enacted a similar law in 2018. It required employers to notify employees in advance of any I-9 inspections and to share inspection results with affected workers, among other things. DOJ sued California, claiming interference with federal authority. The U.S. Court of Appeals for the Ninth Circuit ruled in 2019 that California’s employee-notice provisions were not preempted by federal law and did not improperly hinder federal immigration enforcement. This suggests that courts allow states some leeway to impose notification and poster rules on employers if those rules don’t directly conflict with federal employer obligations. Illinois’ requirements (including posting a state-prescribed E-Verify notice and giving 72-hour audit notices) resemble California’s and could withstand a preemption challenge.
What Employers Should Know
The DOJ’s lawsuit is in the early stages and does not relieve Illinois employers’ obligations to comply with SB 508. Employers must post the required “Right to Privacy in the Workplace Act” E-Verify notice (available from the Illinois Department of Labor) in your workplace, ensure E-Verify users are trained, and be prepared to promptly notify employees of any government I-9 inspections or E-Verify discrepancies as the Illinois law directs. HR departments should keep a close eye on the DOJ lawsuit.
Payroll Brass Tax: Understanding PTO Donation Programs—A Guide for Employers [Podcast]
Ogletree Deakins’ new podcast series, Payroll Brass Tax, offers insights into frequently asked questions about employment and payroll tax. In the inaugural episode, Mike Mahoney (shareholder, Morristown/New York) and Stephen Kenney (associate, Dallas) discuss paid time off (PTO) donation programs, which allow employees to support each other during challenging times, such as natural disasters or prolonged illnesses. Stephen and Mike explain the three types of PTO donation programs—general, medical emergency, and natural disaster—and highlight the tax implications and administrative considerations associated with each type. The speakers emphasize the importance of carefully structuring PTO donation programs to avoid potential tax issues, particularly those related to the assignment of income doctrine, which provides that income is taxed to the individual who earns it, even if the right to that income is transferred to someone else.
California Employers Beware – New Minimum Wage to be Implemented in Several California Localities
Complying with California’s multiple wage and hour laws is essential to avoid exposure and potential litigation. As many California employers know well, minimum wage is a highly litigated area of the state’s wage and hour law. As such, staying up to date with changes to minimum wage law is critical.
Beginning on July 1, 2025, several California localities are set to increase their minimum wage. Employers in these localities should review and update their policies and practices to comply with the scheduled increases. These localities and increases include the following:
Locality
Prior Minimum Wage
New Minimum Wage
City of Los Angeles
$17.28
$17.87
Los Angeles County unincorporated areas
$17.27
$17.81
City and County of San Francisco
$18.67
$19.18
City of Berkeley
$18.67
$19.18
City of Emeryville
$19.36
$19.90
City of Fremont
$17.30
$17.75
City of Milpitas
$17.70
$18.20
Santa Monica
$17.27
$17.81
West Hollywood – Hotel Employees
$19.61
$20.22
The minimum wage in other California localities, such as Alameda County, is also set to increase on July 1, 2025. However, the new minimum wage has not been posted.
OMB Approves Proposed 2024 EEO-1 Instruction Booklet—Filing Site Expected to Open Soon
On May 12, 2025, the Office of Management and Budget (OMB) approved the 2024 EEO-1 Instruction Booklet submitted by the U.S. Equal Employment Opportunity Commission (EEOC) without changes. The now approved 2024 EEO-1 Component 1 Data Collection Instruction Booklet eliminates the option to report non-binary employees, stating that the reporting provides “only binary options (i.e., male or female) for reporting employee counts.” It also sets a shortened reporting period stating that the filing platform will open on May 20, 2025, and close on June 24, 2025.
Quick Hits
The OMP approved the EEOC’s proposed 2024 instruction booklet on EEO-1 data collection on May 12, 2025.
The approved 2024 instruction booklet states that the data collection period will open on May 20, 2025, and close at 11:00 p.m. (EDT) on June 24, 2025.
The approved 2024 instruction booklet removes the option to provide information about non-binary employees.
While the EEOC has not yet posted updates on the EEO-1 landing page, it is expected that the agency will promptly open the 2024 EEO-1 filing platform. While it is not clear if the platform will open on May 20, 2025, it is expected that once the EEOC opens the platform, it will set a filing period of five weeks. Due to the expected opening of the filing platform and the shortened filing period, EEO-1 filers may want to consider working now toward gathering the data necessary for the filings.
Missouri Legislature Passes Bill to Repeal Earned Paid Sick Time Law
On May 14, 2025, the Missouri General Assembly passed House Bill (HB) 567, which would repeal the Missouri paid sick time statute and eliminate Missouri employers’ obligation to provide earned paid sick time to all Missouri employees.
Quick Hits
The Missouri paid sick time statute requires Missouri employers to provide earned paid sick time, starting May 1, 2025.
On May 14, 2025, the Missouri General Assembly passed HB-567, which would repeal the paid sick time statute. If signed by the governor, the law will be repealed effective August 28, 2025.
Proposition A, which Missouri voters passed via a ballot measure on November 5, 2024, includes a provision that raises the state’s minimum wage as of January 1, 2025, and requires employers to begin providing earned paid sick time (PST) on May 1, 2025. In addition to repealing the state paid sick time law, HB-567 would amend the minimum wage statute.
The Missouri Paid Sick Time Law
Under the current paid sick time law, most Missouri employers must provide earned paid sick time to employees working in Missouri starting May 1, 2025. The law exempts employers that are federal, state, or local governments or political subdivisions of the state. The statute also excludes some categories of workers, such as volunteers, camp counselors, babysitters, golf caddies, some rail carrier employees, and retail employees of businesses with annual gross volume sales of less than $500,000. The law does not apply to employees covered by a collective bargaining agreement (CBA) that was in effect on November 5, 2024, until the CBA is amended, extended, or renewed.
The current PST law allows Missouri employees to:
earn one hour of earned paid sick time for every thirty hours worked;
use PST for an employee’s own illness or medical reasons, illness/medical reasons of an immediate family member, closure of the employer’s business or the employee’s child’s school, and absences due to sexual assault or domestic violence;
use PST in increments of one hour;
use up to fifty-six hours of PST for covered reasons;
carry over up to eighty hours of unused PST at year-end; and
use PST without discipline or retaliation for covered use.
Repealing the Missouri PST Statute
HB-567 passed without an emergency clause because the emergency clause was defeated in the Missouri House of Representatives when it did not receive the requisite two-thirds approval before moving to the Senate. The emergency clause would have allowed the repeal to become effective immediately upon signature by the governor. The bill would take effect on August 28, 2025.
If the bill is signed into law, there will be a seventeen-week period from May 1, 2025, to August 28, 2025, during which Missouri employers must comply with the current PST law. Many employers may want to implement a temporary policy to cover the period when the PST law is still in effect. For employers that have a paid-time-off (PTO) policy that meets all the requirements of the statute, no additional PTO policy is necessary.
Key Takeaways
Missouri employers must provide earned paid sick time to eligible Missouri employees while the law is in effect. If the governor signs HB-567, employers may want to implement a short-term policy to provide the required PST benefits from May 1, 2025, to August 28, 2025. Additionally, employers may want to consider how to use an existing PTO policy for short-term compliance and address what will happen to earned PST upon repeal of the law.
The State of Employment Law: Eight States Require Final Pay on the Termination Date
It’s time to terminate an employee. Perhaps they were a consistently poor performer, and you have known for months that this day would come. Or perhaps an employee committed gross misconduct today and the need for termination is sudden and unexpected. Either way, are you prepared to pay your terminated employee their final paycheck right away? In eight states, you need to be.
Most states allow employers a reasonable time to pay a terminated employee their final wages. The next regularly-scheduled payday is a common deadline, but even less-patient states tend to give employers at least several days to pay final wages. But California, Colorado, Hawaii, Massachusetts, Minnesota, Missouri, Montana, and Nevada all require employers to pay final wages to an employee on the date of their termination.
There are a few caveats to this rule. In Colorado and Hawaii, if an employer’s payroll unit is not operational on the termination date or there is some other circumstance that makes immediate payment impossible, the employer may have until the following business day to pay. In Massachusetts, employers in Boston may wait to pay until payrolls, bills, and accounts are certified. Otherwise, employers in these states need to be prepared to pay final wages on the termination date without exception.
This can put employers in a logistical bind. What do you do, for example, if an employee punches a coworker at 4:55 before you close for the day at 5:00 and your payroll staff is already gone for the day? In situations like this, you may need to wait until the following day to terminate your fighting employee.
Employees Hiding Use of AI Tools at Work
A new study by Ivanti illustrates that one out of three workers secretly use artificial intelligence (AI) tools in the workplace. They do so for varying reasons, including “I like a secret advantage,” “My job might be reduced/cut,” “My employer has no AI usage policy,” “My boss might give me more work,” “I don’t want people to question my ability,” and “I don’t want to deal with IT approval processes.”
In 2025, a staggering 42% of employees admit to using generative AI (GenAI) tools at work. Another whopping 48% of employees admit to feeling resenteeism (a dislike of one’s job, but stays anyway) and 39% admit to feeling presenteeism (when one comes into the office to be seen, but is not productive).
The secret use of GenAI tools in the workplace poses several risks for organizations, including unauthorized disclosure of company data and/or personal information, cybersecurity risks, bias and discrimination, and misappropriation of intellectual property.
The Ivanti study emphasizes the need for organizations to adopt an AI Governance Program so employees feel comfortable using approved and sanctioned AI tools and don’t keep their use a secret. It also allows the organization to monitor the use of AI tools by employees and implement guidelines and guardrails around their safe use in the organization to reduce risk.