USCIS Completes Fiscal Year 2026 H-1B Lottery
On March 31, 2025, U.S. Citizenship and Immigration Services (USCIS) announced the completion of the initial selection process for the H-1B regular cap and master’s cap for fiscal year (FY) 2026.
Utilizing its electronic preregistration system to conduct the random selection lottery, USCIS confirmed that notifications regarding the selection results had been sent to registrant employers and their representatives through their respective USCIS accounts.
Quick Hits
USCIS has received enough H-1B registrations for unique beneficiaries to meet the annual cap.
Petitioners will have at least ninety days, beginning on April 1, 2025, to file a completed H-1B petition for each selected beneficiary.
Employment in H-1B status can begin no earlier than October 1, 2025.
USCIS announced that it had selected enough registrations projected to meet the congressionally mandated H-1B cap, including the advanced degree exemption (master’s cap) for fiscal year (FY) 2026. USCIS confirmed that it had used its electronic preregistration system to conduct the random selection of electronic registrations.
Registrants’ online accounts will display a registration status indicating they have been selected to file an H-1B cap petition. The status for registrations that were not selected as part of the initial random selection process (and not denied or invalidated) will remain as “Submitted.”
USCIS confirmed that registrants will have a minimum of ninety days, beginning April 1, 2025, and lasting until at least June 30, 2025, to file complete H-1B petitions for beneficiaries selected in the FY 2026 lottery. Additionally, USCIS specified that petitioners must provide the applicable selection notice, evidence of the beneficiary’s valid passport or travel document that was used during registration to identify the beneficiary, and evidence to establish eligibility for H-1B petition approval.
Employment under an approved FY 2026 H-1B petition can begin no earlier than October 1, 2025.
If USCIS does not receive enough H-1B petitions during the registration period to meet the H-1B annual limit, it may conduct a second lottery.
Staying Compliant in a Changing Landscape: I-9 Audit Best Practices for Employers
Ensuring compliance with Form I-9 requirements has never been more critical. With shifting immigration policies, heightened enforcement priorities, and the introduction of new executive orders, employers face increasing challenges in verifying employment eligibility accurately and lawfully. Mistakes in completing or maintaining I-9 forms can result in hefty fines, legal penalties, and reputational damage.
Employers should take swift action now to conduct I-9 audits given the Trump Administration’s immediate actions to change or influence U.S. immigration policies, to remove undocumented aliens from the U.S., and recent efforts to change programs governing who has authorization to remain or work in the U.S. Several of the Day One Executive Orders remind employers and immigrants that faithful execution of immigration laws of the U.S. is of utmost importance to the administration.
Also, the far-reaching Protecting The American People Against Invasion Executive Order revokes Biden-era immigration enforcement priorities, announces the obligation that anyone without immigration status registers with the U.S. government, and seeks to limit the use of parole and temporary protected status, among other immigration initiatives.
From an employer’s perspective, an individual lacking U.S. work authorization may include an individual who:
Crossed the border undetected and did not present documents at the time of hire,
Was asked for proof of identity and employment verification documentation and subsequently presented fake documents to secure employment, or
Initially entered lawfully or changed status lawfully, but overstayed their lawful status and work authorization lapsed, or
Was admitted to the U.S. under a lawful program or status administered under the previous administration, but that program was terminated, and work authorization has lapsed, but they have continued working.
Another Day One Executive Order Securing Our Borders – The White House indicates in Section 2 that the Trump administration will remove promptly all aliens who enter or remain in violation of Federal law, and Section 2(e) indicates the administration will pursue criminal charges against illegal aliens who violate the immigration laws; and against those who facilitate their unlawful presence. The executive order also instructs the Secretary of Homeland Security to take all appropriate action to terminate categorical parole programs including the parole program for Cubans, Haitians, Nicaraguans, and Venezuelans.
Based on a notice published in the Federal Register on March 25, 2025, the above-referenced temporary parolees whose parole has not already expired by April 24, 2025, will have status (and therefore work authorization) terminated as of that date. Similarly, those who have previously been granted Temporary Protected Status through the 2023 TPS designation for Venezuela are now in limbo following publication on February 5, 2025, of a Federal Register Notice ending the 2023 TPS designation for Venezuela. Although this action is being challenged in federal court, the employment authorization documents issued under that designation are set to expire on April 2, 2025.
With programs ending, enforcement priorities changing, and lawsuits determining the future of certain work authorization, it’s increasingly difficult for the most well-meaning employer to know whether their I-9s have been completed correctly.
Employers likely are familiar with the I-9 requirements, but based on the increased emphasis on enforcement, it’s worth reminding employers that by signing the I-9, employers are attesting under penalty of perjury the following:
That they have examined the documentation presented by the employee, and
The documentation appears to be genuine and to relate to the employee named,
To the best of their knowledge, the employee is authorized to work in the United States,
That the information they enter in Section 2 is complete, true, and correct to the best of their knowledge, and
That they are aware that they may face civil or criminal penalties provided by law and may be subject to criminal prosecution for knowingly and willfully making false statements or knowingly accepting false documentation when completing Form I-9.
Current instructions for the I-9 may be accessed here: Instructions for Form I-9, Employment Eligibility Verification.
As a reminder, it is unlawful for an employer to hire, recruit, or refer for a fee a foreign national knowing they are unauthorized to work in the U.S., and it is unlawful for a person or company to continue to employ a foreign national in the U.S. knowing they are(or have become) unauthorized to work in the U.S. Audits of I-9 Forms are one way for employers to see how well their teams are tracking expiration dates and maintaining records. Note that penalties for I-9 violations have been adjusted for inflation. Here is a representative selection of penalties:
Penalty
Legal Reference
New penalty as adjusted by the final rule
Civil Penalties for I-9 paperwork violations
8 CFR 274a.10(b)(2)
$288-$2,861
Civil penalties for knowingly hiring, recruiting, referral, or retention of unauthorized aliens—Penalty for first offense (per unauthorized alien)
8 CFR 274a.10(b)(1)(ii)(A)
$716–$5,724 (first order)
Penalty for second offense (per unauthorized alien)
8 CFR 274a.10(b)(1)(ii)(B)
$5,724–$14,308
Penalty for third or subsequent offense (per unauthorized alien)
8 CFR 274a.10(b)(1)(ii)(C)
$8,586-$28,619
Document fraud (first offense)
8 CFR 270.3(b)(1)(ii)(A)
$590-$4730
Immediately Minimize Risk Through Preventative Measures.
Employers may minimize risk and fines or penalties by regularly conducting I-9 audits. Please see specific recommendations below.
Conduct Regular Self-Audits. Establish a cadence for scheduled self-audits either by the company or outside counsel.
Doing so ensures that employers are aware of any risk lurking within their I-9s in case the government were to issue a Notice of Inspection
A self-audit increases an employer’s odds of identifying and mitigating mistakes before they become an issue.
Remember, it is unlawful to continue to employ a foreign worker in the United States knowing they are (or have become) an unauthorized alien with respect to employment.
Monitor Updates. Prior to each self-audit, familiarize yourself with any updates to the Handbook for Employers M-274. For example, on March 26, 2025, USCIS announced that Section 7.4.2 of the M-274 Handbook was updated to reflect a DHS final rule automatically extending the duration of status and any employment authorization granted under 8 CFR C.F.R. 274a.12(c)(3)(i)(B) or (C) for an F-1 student who is the beneficiary of an H-1B petition requesting a change of status.
Does the person who conducts your I-9 inspections, know of this change? How do the appropriate resources on your team find out about changes to ensure compliance?
Does your team have the tools needed to perform their job? Do they have access to outside counsel?
Attend Training. USCIS offers Employment Eligibility Webinars. Take advantage of same. See Employment Eligibility Webinars | USCIS. If you have outside Counsel, have them conduct a training for your team whenever you have a change in your team who handles I-9s.
Roster of Employees. Ensure you have a complete and updated roster of employees, including former employees who left less than 1 year ago.
Retention Schedule. Ensure you are not maintaining I-9s for any longer than needed- once an employee leaves, calculate when you may stop retaining the I-9. It must be maintained for three years after the date of hire, or one year after the date employment ends, whichever is later.
Remain Diligent. Ensure signatures aren’t missed and sections aren’t blank. Do not back date documents. Know who to go to if you have questions.
USCIS Announces Completion of FY 2026 H-1B Registration Process: Filing Period Begins April 1, 2025
The U.S. Citizenship and Immigration Services (USCIS) announced today that the H-1B registration process for Fiscal Year (FY) 2026 has been successfully completed. Following a computer-generated, random selection of H-1B petitions submitted during the FY 2026 initial registration period, USCIS determined it has received sufficient electronic registrations for unique beneficiaries and has notified all prospective petitioners. The H-1B program continues to play a critical role in allowing U.S. employers to attract highly skilled talent from around the world to meet their workforce needs and drive innovation.
For those whose registrations were selected in this year’s lottery, USCIS has confirmed that the filing period for H-1B cap-subject petitions will officially open on April 1, 2025. Selected petitioners may submit their H-1B petitions, provided they meet all eligibility requirements and include the necessary supporting documentation.
Key Reminders for H-1B Petition Filings:
Compliance with USCIS Requirements: To help avoid delays or denials, petitioners must ensure that all documents are complete, accurate, and submitted to the correct filing location or online in compliance with USCIS guidelines. Petitioners must submit evidence of the beneficiary’s valid passport or travel document used at the time of registration to identify the beneficiary.
Timely Filing: Petitions must be filed within the designated filing period, at least 90 days, as late submissions will not be accepted.
As the filing period begins, we encourage petitioners to remain proactive and organized to facilitate a smooth petition submission process. For registrants who were not selected in this year’s lottery, we understand the challenges this outcome may present. Employers and prospective employees may want to explore alternative visa pathways or other strategies to achieve their hiring and professional goals. As the FY 2026 H-1B process progresses, USCIS may hold additional lotteries if the agency determines that it has not received enough petitions to meet the annual H-1B cap.
Federal Agencies Cracking Down on DEI/DEIA
In the first two months of President Trump’s second term, his administration has engaged in a full-throated repudiation of “illegal” diversity, equity, and inclusion (“DEI”) and diversity, equity, inclusion, and accessibility (“DEIA”) programs.1
The Trump Administration issued a January 21, 2025 executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (“EO 14173” – click here to read our recent client alert on this executive order). Since then, the Attorney General issued a memo titled “Ending Illegal DEI and DEIA Discrimination and Preferences”, the Office of Personnel Management issued a memo titled “Further Guidance Regarding Ending DEIA Offices, Programs and Initiatives ”(the OPM memo”), and the Equal Employment Opportunity Commission and Department of Justice jointly issued a set of FAQs titled “What You Should Know About DEI-Related Discrimination at Work”.
Executive orders are directives to federal agencies and officials that must be followed but are not binding on those outside the government without legislative action. Inter-governmental memos and FAQs are also not binding on those outside the federal government. Nevertheless, the EOs and related documents give us insight into the direction the administration intends to take.
But what is an “illegal” DEI program? To date, this Administration has provided no guidance regarding what makes a DEI program illegal or even what constitutes a “DEI program.” Despite the lack of clarity, however, the law relating to DEI programs has not changed—if a DEI program was lawful under federal antidiscrimination laws on January 19, 2025, it remains lawful today.
Nevertheless, the lack of guidance, paired with the clear language this administration has used to vilify DEI programs in general, has caused fear, confusion, and uncertainty within organizations, leading some to eliminate DEI programs and/or scrub their websites of all references to DEI programs. Doing so, however, could subject an employer to employee backlash, including claims of discrimination, as well as public calls for boycott. Before deciding whether to eliminate, maintain, or enhance your diversity and inclusion programs, we recommend the following:
Assess your risk tolerance.
Understand the laws in your state. Although this administration has signaled it expects compliance with its directives regardless of state law, the states may not agree.
Document the lawful purpose behind diversity and inclusion programs.
Document employment decisions carefully, setting forth the legitimate business reasons behind the decisions and showing that decisions are based on merit without regard to any protected characteristics.
Review your diversity and inclusion policies, programs, and training materials, including all public-facing DEI-related communications and disclosures. Consider whether to conduct this review under the umbrella of attorney-client privilege.
Review your investigation protocols, to encompass complaints and concerns about DEI programs and “DEI-related discrimination.”
Develop internal and external communications strategies, to mitigate legal risks while staying true to your culture and values.
Closely monitor legal developments.
Some DEI programs may contain elements that could be challenged under the law that existed on January 19, 2025, before President Trump’s second term began. Consider immediately eliminating those elements, which may include the following,
Employee resource groups/affinity groups that are only open or provide benefits to employees based on specific protected characteristics.
Scholarship, fellowship, internship, mentoring, and other professional development opportunities that are limited to or targeted at members of specific protected characteristics.
Goals, targets, or quotas based on protected characteristics.
Compensation targets based on the achievement of DEI objectives or goals.
Our team will continue to track and analyze significant directives and policy changes as they are announced. For further information, contact the authors of this alert or your WBD attorney.
1 For purposes of this Alert, both DEI and DEIA programs will be used interchangeably.
What to Know About International Travel by Employees with Work Visas
We have previously written about the steps employers should take to ensure I-9 compliance and prepare for immigration site visits. In light of new immigration guidelines impacting visa holders, employers also should prepare for travel outside the U.S. (whether for personal or business reasons) by their employees with work visas.
Visa holders traveling outside of the U.S. for the first time on a new visa have to get their visa stamped at a U.S. Embassy or Consulate in order to return to the U.S. — recent immigration policy changes and changes to the visa processing procedure may cause delays in employees returning to the U.S. (and to work) from international travel.
First, in an executive order on January 20, 2025, President Trump ordered that all immigrants should be “vetted and screened to the maximum degree possible.” H-1B visa and other work visa holders traveling abroad, to get their visas stamped, will likely be subject to increased scrutiny under this directive. Employers should expect that more visas will be placed in “administrative processing,” in which the consular officer requires additional information from sources other than the visa holder to determine eligibility. Administrative processing can result in long delays, during which time visa holders cannot return to the U.S.
More recently, on February 18, 2025, the Department of State (DOS) announced changes to the Visa Interview Waiver, or “dropbox,” eligibility requirements. The dropbox process allows visa holders to get their visas stamped without attending an in-person visa interview, greatly reducing processing times for those eligible. Previously, the dropbox process was open to visa holders whose last visa expired within the prior 48 months. DOS has now reverted to pre-COVID guidelines, reducing the 48-month limitation to just 12 months and further limiting eligibility to visa applicants seeking approval in the same category as their prior visa. In other words, an H-1B holder can only use the dropbox process if they have a prior H-1B visa that expired within the last 12 months. An H-1B holder who previously held an F-1 (student) visa or whose prior visa expired more than 12 months ago is not eligible for the dropbox process. As a result, employers can expect that more employees will be required to attend visa interviews in person.
The visa stamping process is already fraught with long wait times, especially in countries where U.S. consulates process large numbers of visas, like India. With these changes, employees with work visas — and their employers — should be prepared for extended wait times for visa appointments, as more visa holders are required to attend in-person interviews. Employers also should be prepared for the risk that employees will “get stuck” abroad for weeks, or even months, if their visa is placed in administrative processing.
Here are some steps employers can take to prepare for the risks of international travel by employees with work visas:
Remind employees to notify the appropriate employer representative well in advance of international travel. Employers should ensure that employees who are not eligible for the dropbox process timely schedule a visa interview that coincides with their travel.
Confirm that the employee’s current job details match their latest visa filing to avoid any delays in processing. Material changes in the employee’s job, location, or pay may require an updated filing.
Consider how to respond if an employee “gets stuck” while awaiting administrative processing or delays in visa interviews. Employers may decide to require these employees to use paid time off or unpaid leave to account of the additional delays. However, employees who “get stuck” may ask to work remotely from their home country while awaiting a decision. Employers should consult with counsel before agreeing to allow employees to work remotely from a foreign country, as such extraterritorial work typically raises tax and other employment law compliance implications.
Stay on top of developments in immigration law, including travel bans, that may impact international travel by employees.
Navigating Employee Grief: Bereavement Law in California
In 2022, California passed Assembly Bill (AB) 1949 which amended the California Family Rights Act (CFRA) to provide for bereavement leave. The law took effect in January 2023, but here are some reminders for employers about bereavement leave requirements.
Under the law, employers with five or more employees must allow eligible employees to take up to five unpaid days of bereavement leave for certain family members. Consistent with the CFRA’s broad definition, a “family member” means a spouse, child, parent, sibling, grandparent, grandchild, domestic partner, or parent-in-law. Employers may voluntarily allow bereavement leave for a person not defined as a family member under the law. Although bereavement leave is unpaid, employers must allow employees to use any accrued paid sick days or personal days to receive pay during their bereavement leave.
Employees are required to follow the employer’s bereavement leave policy pertaining to notice. Employees are not required to take the five days consecutively but must complete all leave during the three months after the death of the family member. And, although the CFRA provides for bereavement leave, leave taken for bereavement does not affect the amount of time available for CFRA leave.
Employers may require documentation of the death of a family member. This may include a death certificate, obituary, or written verification of death, burial, or memorial service from a mortuary, funeral home, burial society, crematorium, religious institution, or government agency.
DOJ Withdraws 11 Pieces of Americans With Disabilities Act Title III Guidance: What Covered Businesses Need to Know
The Department of Justice (DOJ) withdrew 11 documents providing guidance to businesses on compliance with Title III of the Americans with Disabilities Act (Title III). The DOJ Guidance sets forth how the agency interprets certain issues addressed by Title III of the ADA. Although the guidance has been withdrawn, the law remains the same. Title III requires that covered businesses must provide people with disabilities with an equal opportunity to access the goods or services that they offer.
The DOJ says the documents were withdrawn in order to “streamline” ADA compliance resources for businesses consistent with President Trump’s January 20, 2025 Executive Order “Delivering Emergency Price Relief for American Families and Defeating the Cost-of-Living Crisis” . According to the DOJ’s press release, “Today’s withdrawal of 11 pieces of unnecessary and outdated guidance will aid businesses in complying with the ADA by eliminating unnecessary review and focusing only on current ADA guidance. Avoiding confusion and reducing the time spent understanding compliance may allow businesses to deliver price relief to consumers.”
The DOJ identified the following guidance for withdrawal:
COVID-19 and the Americans with Disabilities Act: Can a business stop me from bringing in my service animal because of the COVID-19 pandemic? (2021)
COVID-19 and the Americans with Disabilities Act: Does the Department of Justice issue exemptions from mask requirements? (2021)
COVID-19 and the Americans with Disabilities Act: Are there resources available that help explain my rights as an employee with a disability during the COVID-19 pandemic? (2021)
COVID-19 and the Americans with Disabilities Act: Can a hospital or medical facility exclude all “visitors” even where, due to a patient’s disability, the patient needs help from a family member, companion, or aide in order to equally access care? (2021)
COVID-19 and the Americans with Disabilities Act: Does the ADA apply to outdoor restaurants (sometimes called “streateries”) or other outdoor retail spaces that have popped up since COVID-19? (2021)
Expanding Your Market: Maintaining Accessible Features in Retail Establishments (2009)
Expanding Your Market: Gathering Input from Customers with Disabilities (2007)
Expanding Your Market: Accessible Customer Service Practices for Hotel and Lodging Guests with Disabilities (2006)
Reaching out to Customers with Disabilities (2005)
Americans with Disabilities Act: Assistance at Self-Serve Gas Stations (1999)
Five Steps to Make New Lodging Facilities Comply with the ADA (1999)
The DOJ is also “raising awareness about tax incentives for businesses related to their compliance with the ADA” by prominently featuring a link to a 2006 publication.
The withdrawn guidance was prepared before the most recent Title III regulations went into effect in 2011 or deals with COVID-19. We do not expect the DOJ’s withdrawal of the guidance to have significant impact on business operations. However, Jackson Lewis attorneys, including Disability Access Litigation and Compliance group are closely monitoring the rapid developments from the federal agencies that impact our clients.
What Would John Wilkes Booth Do? Mandatory COVID Vaxes for Actors
Although the threat of COVID-19 (remember that?) seems to have diminished considerably over the past five years, once upon a time in Hollywood many production companies (along with other employers) required employees to be vaccinated upon pain of losing their job.
In early 2022, Apple Studios LLC conditionally offered actor Brent Sexton the role of U.S. President Andrew Johnson in its production of Manhunt, a limited series about the hunt for John Wilkes Booth following the assassination of Abraham Lincoln. One of the conditions for Sexton’s casting was that he be fully vaccinated, in compliance with Apple’s mandatory on-set vaccination policy. Sexton refused to get vaccinated, seeking an exemption on medical grounds. After considering Sexton’s request, Apple ultimately decided that an unvaccinated actor could not safely be accommodated on set and withdrew Sexton’s offer. Sexton sued Apple for disability discrimination and related claims.
In response, Apple filed a motion to strike Sexton’s complaint under California’s anti-Strategic Lawsuit Against Public Participation (“anti-SLAPP”) law, which authorizes early dismissal of “lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances.” The trial court denied Apple’s motion, but the Court of Appeal reversed, holding that (1) Apple’s decision not to cast Sexton was in fact “protected expressive conduct” under the First Amendment; and (2) Sexton’s claims lacked merit because, by remaining unvaccinated, he failed to meet the “safety” qualification required for the job he sought.
To Jab, or Not to Jab: That Is the Question
The Court found that Apple’s decision not to cast Sexton furthered free speech in two ways. First, the choice of how to portray Andrew Johnson—a controversial and important historical figure—was a creative endeavor in and of itself, with the selection of different actors “contribut[ing] to the public issue of how contemporary viewers might conceive of Johnson.” Second, by making vaccination mandatory on the Manhunt set, “Apple took a stand” on the still-live public debate about vaccination policy.
While legal protections for casting decisions is a remote issue for most employers, the second “speech” element that the Court identified in Apple’s conduct—its decision to make vaccines mandatory on the Manhunt set—has potentially sweeping implications. Noting that there is still “a public debate over vaccination policy,” the Court found that by implementing and enforcing an on-set vaccine mandate, Apple “contributed to public discussion of vaccination policy.”
“Safety” as a Bona Fide Occupational Qualification?
In addition to finding Apple’s actions protected as expressive conduct, the Court also concluded that Sexton’s discrimination claims failed on the merits. A key element for a meritorious employment discrimination claim is that the plaintiff must show that they are qualified for the position. Here, the Court found that, because Sexton was unvaccinated, he was not qualified for the job he sought. How this decision will be harmonized with established case law on religious and medical exemptions remains to be seen. As always, we will continue to monitor this topic for any updates. (In the meantime, Manhunt (which is excellent!) is still streaming, featuring actor Glenn Morshower in the role of Andrew Johnson.)
No Rest for the Weary: The Trump DOL Indicates Yet Another Change to Its Independent Contractor Classification Rule Is on the Horizon
Exactly a year ago, we wrote about the final rule issued by the Biden-era U.S. Department of Labor (DOL) regarding the test for determining whether a worker is an employee covered by the Fair Labor Standards Act (FLSA), or an independent contractor exempt from FLSA coverage. The final rule became effective on March 11, 2024 (the “2024 rule”) and replaced the DOL’s independent contractor test that was adopted in 2021 during the first Trump administration (the “2021 rule”), which made it made it easier to classify workers as independent contractors. We previously wrote about the 2021 rule here.
Recent developments suggest that, under new leadership, the DOL may abandon the short-lived 2024 rule and implement changes to its guidance on this issue in the near future.
Recent Developments Suggest the DOL’s New Leadership May Abandon the 2024 Biden-Era Rule
Soon after the Biden-era’s publication of the 2024 rule, several lawsuits were filed against the agency arguing that it exceeded its authority in adopting the 2024 rule. The leading case, Frisard’s Transp., LLC v. United States DOL, No. 24-30223, is currently pending on appeal before the Fifth Circuit. The case originated when Frisard’s Transportation, LLC, along with other plaintiffs, filed a lawsuit, in the U.S. District Court for the Eastern District of Louisiana on February 8, 2024 (Case No. 2:24-cv-00347). The plaintiffs sought a preliminary injunction to block the rule, but on March 27, 2024, the district judge denied the motion, finding the plaintiffs could not show immediate irreparable harm because the rule’s impact on their business was speculative at that stage. Following this denial, the plaintiffs appealed to the Fifth Circuit on April 8, 2024, arguing that the district court erred in denying the preliminary injunction. Several amicus briefs supporting the plaintiffs were filed by organizations such as the U.S. Chamber of Commerce, the Manhattan Institute, and others, emphasizing the rule’s broad economic implications.
The Fifth Circuit was scheduled to hear oral arguments on the appeal in the Frisard’s case on February 5, 2025; however, the DOL requested to delay the scheduled argument to allow sufficient time for its newly confirmed leadership to familiarize themselves with the issues presented in the case and “determine how they wish to proceed.” The Fifth Circuit initially ordered the DOL to file a status report no later than March 25, 2025, stating its position regarding the litigation under its new leadership, but that deadline was recently extended to April 7, 2025.
Confirmation of Secretary of Labor Creates Some Difficulty in Predicting the DOL’s Next Steps
If we were asked to predict the fate of the 2024 rule on November 6, 2024, we would not have hesitated in forecasting a return to the more employer-friendly 2021 rule adopted during the first Trump administration. The subsequent nomination and senate confirmation of U.S. Secretary of Labor Lori Chavez-DeRemer, however, leaves us less confident in making that prediction. Chavez-DeRemer served as the U.S. representative for Oregon’s 5th congressional district between 2023 and 2025. Though a member of the Republican Party, Chavez-DeRemer has an unusually pro-labor congressional record as one of only three House Republicans to co-sponsor the Protecting the Right to Organize (PRO) Act, proposed legislation that would strengthen employee rights under the National Labor Relations Act and other labor laws. Significant to the question of independent contractor classification, the PRO Act would impose California’s ABC test for determining independent contractor status and make it even more difficult to classify workers as independent contractors for purposes of questions under the NLRA.
While Chavez-DeRemer has not made any specific commitments regarding the 2024 rule, she walked back her support for the PRO Act, acknowledging on several occasions that the PRO Act was “imperfect.” She also agreed that worker flexibility and independent contractors were key to growing the economy and committed to reviewing all of the DOL’s regulations to determine whether they support President Trump’s agenda.
In light of Chavez-DeRemer comments during her senate confirmation hearing, we anticipate that the DOL will ultimately rescind the 2024 rule and drop its defense of the rule in the Frisard’s case and the other pending legal challenges. Following that, the DOL may restore the more employer-friendly 2021 rule, or it might not adopt any replacement rule and simply let courts analyze questions regarding independent contractor classification under their own case precedents, without agency guidance.
What This Means for Employers
Despite the anticipated employer-friendly changes at the DOL, employers should continue to proceed with caution in classifying workers as independent contractors. Notably, the Supreme Court’s watershed decision in Loper Bright means that any new DOL guidance defining the test for distinguishing employees from independent contractors under the FLSA may not be entitled to judicial deference anyway. Employers would therefore be wise to continue evaluating the following key questions when deciding whether workers may be classified as independent contractors:
What is the nature and degree of the control that the worker has over their own work? For example, does the worker control how and when the job will be performed and the pricing for the services?
What is the worker’s opportunity for profit and loss? Is the worker required to make their own investments to perform the services?
Does the work require a special or unique skillset?
Is the work integral to the company’s core business?
Is the worker’s relationship with the company non-exclusive and are the services provided on a project-specific or sporadic basis, rather than indefinitely or continuously?
Does the company have employees performing the same services as the worker?
Employers should also keep in mind that other federal laws (such as the Family and Medical Leave Act and the Internal Revenue Code) may impose different standards for distinguishing employees from independent contractors and that courts may differ by jurisdiction in their interpretation of these standards. Additionally, many states have adopted their own standards for distinguishing employees from independent contractors under state employment laws.
Update: The NLRB Has Lost Its Quorum – DC Circuit Stays District Court’s Reinstatement of Board Member Gwynne Wilcox – and a New General Counsel Has Been Nominated
On March 28, 2025, a divided three-judge panel of the United States Court of Appeals for the District of Columbia Circuit ruled that President Donald Trump likely has the authority to remove National Labor Relations Board (NLRB) member Gwynne Wilcox, as well as Merit Systems Protections Board (MSPB) member Cathy Harris, without cause.
In granting the Government’s motion for an emergency stay of the reinstatement orders of the United States District Court for the District of Columbia, the appeals court has once again left the NLRB without a quorum.
The Future of Humphrey’s Executor Remains Unresolved
In a two-to-one decision, the panel held that the President likely had the legal authority to remove Wilcox and Harris from their positions, notwithstanding that the Executive did not show that the removals were for cause, as required under the statutes that created the agencies. In so ruling, the Court has added to the list of cases that appear to further narrow the application of the Supreme Court’s holding in Humphrey’s Executor v. United States, 295 U.S. 602 (1935). There, the Court unanimously held that the President lacked the power to remove executive officials of a quasi-legislative or quasi-judicial administrative body for reasons other than what is allowed by Congress.
In the instant case, the Trump administration argued that Humphrey’s Executor was not good law and should no longer be followed. However, the D.C. Circuit did not go so far, but rather concluded that Humphrey’s Executor did not apply because of the differences between the NLRB and the MSPB on the one hand, and the Federal Trade Commission, the agency at issue in Humphrey’s Executor, on the other.
In her dissent, Judge Patricia Millett disagreed with the majority about the applicability of Humphrey’s Executor to the NLRB and the MSPB, noting that the decision “marks the first time in history that a court of appeals, or the Supreme Court, has licensed the termination of members of multimember adjudicatory boards statutorily protected by the very type of removal restriction the Supreme Court has twice unanimously upheld.” She called the majority’s decision “a hurried and preliminary first-look ruling by this court to announce a revolution in the law that the Supreme Court has expressly avoided,” and one which would “trap in legal limbo millions of employees and employers whom the law says must go to these boards for the resolution of their employment disputes.”
What Happens Now While the NLRB Again Lacks a Quorum?
As we previously reported, while without a quorum, i.e., at least three Board members, the NLRB is not able to issue decisions or engage in rulemaking. Nevertheless, the Board has indicated it will continue to perform other functions, citing the NLRB’s 2011 “Order Contingently Delegating Authority to the General Counsel” contained at 76 FR 69768, which includes the ability to initiate and prosecute proceedings under Section 10(j) or Section 10(e) or (f), and contempt proceedings pertaining to the enforcement of or compliance with any order of the Board, even though this delegation has been challenged in the past.
Of course, the President retains the ability to submit nominations for the other two vacant seats on the five-member NLRB to the Senate. Confirmation of one new member would reestablish a quorum. When and whether that will happen remains to be seen. And, as to the question of the continued viability of Humphrey’s Executor, it is virtually certain that the Supreme Court will opine during its current term, either with regard to Ms. Wilcox or in other pending cases that raise the issue.
The President Has Nominated a New General Counsel for the NLRB
On March 25th, the White House announced the nomination of Crystal Carey, a management side labor lawyer, for the role of NLRB General Counsel (GC). The nomination is subject to confirmation by the Senate and it is not known when the nomination will be considered and acted upon. In the meantime, the role of the GC remains covered by William Cowen, who was named Acting General Counsel on March 3rd, following the President’s termination of Jennifer Abruzzo, a longtime NLRB attorney who served as GC under President Biden.
Epstein Becker Green Staff Attorney Elizabeth A. Ledkovsky assisted with this publication.
Can Common Interest Communities Ban Religious Displays On Doors And Doorframes?
The Nevada legislature is currently considering a bill, SB 201, that would restrict, with certain exceptions, an association or unit’s owner who rents or leases his or her unit from prohibiting a unit’s owner or occupant of a unit from engaging in the “display of religious items”. The bill defines “display of religious items” as “an item or combination of items: (1) Made of wood, metal, glass, plastic, cloth, fabric or paper; and (2) Displayed or affixed on any entry door or doorframe of a unit because of sincerely held religious beliefs”. At the Senate Committee on Judiciary the bill was amended to, among other things, expand its application to include apartments.
The reference to doorframes caused me to think of mezuzot. A mezuzah consists of a case containing a small piece of parchment inscribed by hand with the first two sections of the Shema. The fixing of mezuzah to a doorframe is governed by a number of specific rules, including a requirement that it be visible (or there be a symbol indicating the presence of the mezuzah).
As noted, an item must be displayed “because of sincerely held religious beliefs”. Mezuzot and doorposts should meet this requirement because are specifically mentioned in Deuteronomy 6:9 (“וּכְתַבְתָּ֛ם עַל־מְזֻז֥וֹת בֵּיתֶ֖ךָ וּבִשְׁעָרֶֽיךָ׃ {ס} inscribe them on the doorposts of your house and on your gates”). In obedience of this divine command, Jews affix mezuzot to every doorway in their homes (other than bathrooms and small closets).
What about religious symbols of other faiths? The bill does not specifically refer to any particular faith or symbols (including a mezuzah). Crosses or crucifixes are generally recognized as Christian symbols and nothing in the bill excludes either. However, they do raise a question of what is meant by “sincerely held religious beliefs”. Does this simply require that the owner or occupant sincerely hold a belief in Christianity or does it require that the owner or occupant specifically believe that the display is religiously mandated? If the latter requirement is imposed, then it may be difficult for an owner or occupant to meet it, for I know of no Christian canon similar to Deuteronomy 6:9 that mandates a display of a cross or crucifix on a door or doorframe (if any reader is aware of such a requirement, please let me know). Thus, a Christian may choose to affix a cross to his or her doorway because they are a sincere believer, but they may not believe that they are required by their religion to do so.
I therefore find the requirement of a “sincerely held religious belief” to be problematical because it invites owners associations, landlords, and ultimately the courts to delve into religious law and belief. In addition, the requirement could invite challenges to the sincerity of an owner’s belief.
The bill also excludes, among other things, a display that “promotes discrimination or discriminatory belief”. As a content-based restriction on speech, this exclusion is highly problematical from a First Amendment perspective.
While SB 201 is well-intentioned, it does serve to illustrate how difficult it is to draft legislation that affects religious practices without entangling the government in questions of religious belief.
UK Business Immigration – New Law on Right to Work Checks for Workers: Makes Sense in Principle but Tricky in Practice
The government has announced the latest instalment in its ‘crackdown’ on illegal working by extending right to work checks to businesses hiring gig economy and zero-hours workers. In principle, this is logical and reasonable – prevention of illegal working should rightly apply to anyone working in the UK regardless of their worker status label. However, any change in the law must be supported by carefully-drafted guidance (which hasn’t always been the case in this area). Many businesses who fall foul of the UK’s complex right to work rules are certainly not ‘rogue’ employers, but just in dire need of clear guidelines on what they need to do.
Under s.15 and s.21 of the Immigration, Asylum and Nationality Act 2006, employment of an adult subject to immigration control who does not have permission to work or is working in breach of their visa conditions exposes the employer to a civil penalty (currently set at a maximum of £60,000 per person) and/or a range of other sanctions including an unlimited fine, business closure, director disqualification and potential prison sentence of up to 5 years. S.25(b) IANA specifies that employment for these purposes is “employment under a contract of service or apprenticeship, whether express or implied and whether oral or written”. UK businesses are therefore currently only at risk of sanctions in relation to employees working illegally but the Home Office has been trying to close this loophole for some time.
In September 2024, the Home Office updated its Right to work checks: an employer’s guide to state: “Where the worker is not your direct employee (for example, if they’re self-employed), you are not required to establish a statutory excuse, but you must still carry out these checks (and retain evidence you have done so) to comply with your sponsor duties.”
As this appeared to conflict with the provisions of IANA, we contacted the Home Office to clarify what this wording meant for organisations who do not hold a sponsor licence. Wording later on in the same guidance states that employers are strongly encouraged to carry out checks even on those workers who are not employees and on contractors and labour providers but stops short of imposing any obligations.
In February just gone, the same part of the employer’s guide was amended to read: “Where the worker is not your direct employee (for example, if they’re self-employed), you are not required to establish a statutory excuse. However, you must still carry out these checks (and retain evidence you have done so) if you are a sponsor licence holder and are sponsoring the worker to ensure compliance with your sponsor duties.” In other words, no checks are required on workers, other than in circumstances where they are sponsored.
The government’s latest announcement will require it to change IANA and given the specific reference to gig economy and zero hours workers in the announcement, it will also need to give some careful thought to the following:
Will the changes only apply to gig economy and zero hours workers or to all other workers including agency workers and freelancers in any type of business? How do you define a ‘gig economy worker’?
Will employers be required to carry out checks on existing workers or just those hired on or after the date of implementation?
Will right to work checks apply to the genuinely self-employed and if not, how will employers, let alone the Home Office, differentiate them from workers? Dozens of decided cases around the gig economy, including at the highest levels within the UK legal system, have failed to come up with a definitive test for what separates a worker from the genuinely self-employed. There is also no definition at law of “gig economy”. So a business which uses outsourced labour faces a nearly impossible choice (maybe that’s the point — it’s hard to tell). It has to decide between (i) maintaining the line that its associates are fully self-employed and so their right to work compliance is not its responsibility on the one hand or (ii) doing the checks to avoid time at HM’s pleasure, so tacitly accepting that they are workers, which then pulls down upon itself all sorts of liabilities in relation to holiday pay, auto-enrolment contributions, minimum wage, etc., that it could perhaps otherwise have avoided. Damned either way, it seems.
Could we end up with a requirement to carry out checks on anyone who provides any sort of service for payment regardless of status – your plumber, builder, taxi driver etc? No doubt the Home Office would laugh at the idea as patently silly, as indeed it is, but that is the logical extension of these new requirements unless and until there is the clearest line drawn in law between who is covered and who is not – just saying “workers and gig economy people” won’t cut it for that purpose as what is covered by one is still being litigated and the other has no definition at all. It is also unclear whether there will be any overlap in law or principle with the tax position – for example, if the supply to you of a particular contractor is caught by IR35 (in other words, he is deemed to be doing work akin to that of an employee), would that mean that these new duties apply? Or if he is a sole trader working in his own name, do these new obligations depend on whether he can show that you are just one of a number of customers for his trade or profession or on how much work he does for you in a week, a month or a year? Will we see a resurgence of the issue of economic dependency? This all sounds a bit shrill, but unless there is proper clarity attached to these extended obligations, operating them will be a nightmare for employers. The line between worker and fully self-employed is extremely thin and can depend on relatively minute facts, the relevance of which could easily escape the average employer. The only completely safe course will be to make as many of those workers into Schedule E employees as possible, so putting the obligation to do the checks beyond argument but at the same time imposing significant costs and loss of flexibility on businesses. It is of course government policy to push as many people as it can into tax-paying employment (hence the proposal to drop worker status altogether in due course) so this may be seen as consistent with that direction of travel. The issue will be how much of a mess is created for employers in the meantime, and in the absence of that very clear guidance, the answer to that seems likely to be “far more than could ever have been thought necessary”.
Will the obligation still sit with labour providers to carry out checks on the employees it provides to its clients or will both parties need to carry out their own checks? If the latter, will both parties be liable for a civil penalty in the event of illegal working? We foresee some interesting contractual tussles over where that liability may fall as between the parties.
What action should employers take?
Although the planned changes appear to be aimed at employers which intentionally breach their immigration duties, all organisations with overseas workers are likely to be affected, since the Home Office has shown limited ability to distinguish effectively between the politically-essential “rogue employers” and those doing their best in a bewildering blizzard of law and guidance — compliance action and fines are often issued to well-intentioned and generally diligent sponsors which have unwittingly fallen foul of their increasingly byzantine immigration obligations. Of the hundreds of cases we have advised on (many of them for large, professional organisations), almost all arise out of a genuine oversight on the part of the employer, combined with an often understandable lack of awareness of the prevention of illegal working rules. Whilst ignorance is rightly not a valid defence to compliance, the UK immigration system remains complex and constantly changing. Employers should not assume for a moment that the stated focus on intentional breach will avail them in any way.
It’s not clear when the changes will be implemented but UK businesses which hire anyone who is not an employee should:
Consider the extent of their non-employed work force and the checks that are currently done on them
Review relevant right to work procedures and the resources needed to extend them to workers (and, potentially, the self-employed)
Given the Home Office’s ongoing ‘crackdown’, ensure that their right to work procedures (for the entire workforce, including employees) are clear, robust and effective
The UK’s right to work rules are not straightforward, nor the penalties for tripping over them trivial – training and legal support is a worthwhile investment.