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April 23, 2025 |
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Quick Look
- Executive Order 14281 instructs federal agencies to “deprioritize” enforcement of disparate impact discrimination under Title VII of the Civil Rights Act.
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Discussion:
A recently signed Executive Order 14281, titled “Restoring Equality of Opportunity and Meritocracy,” instructs federal agencies to “deprioritize” enforcement of disparate impact discrimination under Title VII of the Civil Rights Act. The Order includes disparate impact theory as part of the “pernicious movement” that focuses on “irrelevant immutable characteristics, regardless of individual strengths, effort, or achievement.” Enforcement of disparate impact discrimination is now being lumped into the same category of alleged unfair treatment of employees as activities that promote diversity, equity, and inclusion.
What is disparate impact theory?
The Executive Order defines disparate impact theory as when a “presumption of unlawful discrimination exists where there are any differences in outcomes in certain circumstances among different races, sexes, or similar groups, even if there is no facially discriminatory policy or practice or discriminatory intent involved, and even if everyone has an equal opportunity to succeed.” It says that disparate impact requires businesses to “engage in racial balancing.”
However, disparate impact theory is a specifically recognized form of discrimination under Title VII of the Civil Rights Act. First identified by the U.S. Supreme Court in 1971, and later adopted by Congress in 1991, disparate impact discrimination occurs when a facially neutral policy or practice disproportionately impacts people based on their protected class. For example, requiring a credit history check for all new hires may appear facially neutral but may have a disparate impact on lower-income individuals or certain racial groups. This reality led to some states enacting laws that limit the use of credit checks in hiring except under approved circumstances.
Disparate impact discrimination is different from disparate treatment discrimination under Title VII, which occurs when an employer treats one applicant or employee differently than a similarly situated applicant or employee because of that individual’s protected class. Disparate treatment can be more easily identified than disparate impact in that it is, by definition, intentional; whereas disparate impact focuses on the causal effect of the policy or practice.
Does the President have the power to eliminate statutory theories of liability?
As established by the U.S. Constitution, the President cannot change established law enacted by Congress, meaning that he cannot remove disparate impact discrimination from Title VII. This is highlighted by the fact that the Executive Order instructs federal agencies to “deprioritize” enforcement. Moreover, Title VII created the EEOC and charged it with enforcement of Title VII laws. Whether the President can direct federal agencies not to follow their statutory mandates will likely be another issue brought before the courts. Further, based on last year’s Supreme Court ruling in Loper Bright, which overturned the long-standing Chevron decision that gave deference to federal agency interpretations, any legal challenge will be forced to reckon with Title VII itself rather than the EEOC’s interpretations or directives.
What does this mean for employers?
This means that, for now, the EEOC will not be enforcing disparate impact discrimination claims against employers, and may even seek to dismiss its own previously filed lawsuits based on this type of discrimination. Because the Executive Order also seeks to evaluate where disparate impact discrimination enforcement exists, including at the state level, the White House appears to be evaluating how it can challenge these laws more broadly. However, because it remains established law at the federal and, in some cases, state levels, employers are still at risk of being held liable for disparate impact discrimination and should continue to follow applicable federal, state, and local laws.
Action Items
- Review the Executive Order and Fact Sheet for more information.
- Review claims of disparate impact discrimination with legal counsel.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
EEO-1 Reporting Window Expected to Open May 20, 2025
/in HR Alerts /by ManagEaseAPPLIES TO
All Private Employers with 100+ Employees or Federal Contractors with 50+ Employees
EFFECTIVE
May 20, 2025
QUESTIONS?
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Discussion:
The Equal Employment Opportunity Commission (EEOC) has finally taken steps to move forward with the 2024 EEO-1 Component 1 data collection by submitting documents for approval with the White House Office of Management and Budget (OMB). As part of the EEOC’s submissions, and buried in the OMB’s View Information Collection, the EEOC has proposed a new 2024 EEO Component 1 Instruction Booklet for approval that, if accepted, will alter some employer reporting obligations. A summary of the EEOC’s proposals is set forth below.
Shortened Reporting Period
The proposed 2024 Instruction Booklet provides for a shortened reporting period of five weeks, with the data collection platform opening on May 20, 2025, and closing on June 24, 2025. This means employers should start gathering their data now, to ensure they are prepared to file reports during the shortened period. Employers should continue to monitor developments as final opening and closing deadlines are expected to be published on the EEOC’s website.
Reporting Requirements for Federal Contractors
In January, President Trump signed Executive Order 14173, revoking Executive Order 11246 and OFCCP regulations enforcing Executive Order 11246. Nevertheless, the EEOC’s proposed Instruction Booklet for 2024 EEO-1 reporting provides that federal contractors with 50 or more employees are still required to file EEO-1 reports for the 2024 cycle. The proposed guidance does not address the implications of President Trump’s Executive Order 14173 on these reporting obligations, so employers should continue to monitor developments as the OMB reviews the proposed materials and finalizes the reporting obligations.
Changes to Reporting by Sex
As part of their filings, the EEOC is proposing “non-substantive” changes to the EEO-1 instructions to comply with Executive Order 14168, which mandates that agency forms list only “male” or “female” for sex, as opposed to reporting based on gender identity. This proposal seeks to remove the voluntary reporting option for “non-binary” employees from the EEO-1 instructions.
Employers will no longer have the option to submit non-binary employee data. For individuals who previously self-reported as “non-binary” during the 2024 reporting year, or if an employee refuses to self-identify with one of the two approved binary options, employers may need to perform a visual identification and provide their best response.
Other Non-Substantive Changes
The EEOC has proposed several other “non-substantive” changes to streamline the EEO-1 collection process for 2024. These include removing language about “Notice of Failure to File,” eliminating references to postal mail notifications, updating instructions on undue hardship requests to reflect recent regulatory changes, and removing an inoperable link in Appendix B. These changes affect the instructions but not the EEO-1 collection instrument itself.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
White House Memo Directs Repeal of Unlawful Regulations
/in HR Alerts /by ManagEaseAPPLIES TO
All Employers
EFFECTIVE
As Indicated
QUESTIONS?
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Discussion:
A Presidential Memorandum issued April 9, 2025 directs the heads of all executive departments and agencies to repeal “unlawful regulations.” With the stated purpose of promoting economic growth and American innovation as top priorities, the memo cites Executive Order 14219 (Ensuring Lawful Governance and Implementing the President’s “Department of Government Efficiency” Deregulatory Initiative) directing the heads of all executive departments and agencies to identify certain categories of unlawful and potentially unlawful regulations within 60 days and begin plans to repeal them.
The memo cites ten recent U.S. Supreme Court cases that restored “checks on unlawful agency actions” that imposed “onerous” restrictions on consumers and businesses. The department and agency heads are to review agency regulations and align them with these select rulings in order to repeal unlawful regulations. Agencies are further instructed to finalize rules without notice and comment where they are permitted to do so under the “good cause” exception in the Administrative Procedure Act. The memo additionally states that notice and comment are “unnecessary” when a repeal of a regulation is required to comply with a Supreme Court ruling.
Agency heads are specifically directed to:
Since the Executive Order and Presidential Memorandum was directed to all department and agency heads, employers should be prepared for potential changes in multiple areas that affect labor and employment. Monitoring agency websites for updates will be imperative to staying informed of changes.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
Is Disparate Impact Discrimination Gone?
/in HR Alerts /by ManagEaseAPPLIES TO
All Employers with 15+ Employees
EFFECTIVE
April 23, 2025
QUESTIONS?
Contact HR On-Call
(888) 378-2456
Discussion:
A recently signed Executive Order 14281, titled “Restoring Equality of Opportunity and Meritocracy,” instructs federal agencies to “deprioritize” enforcement of disparate impact discrimination under Title VII of the Civil Rights Act. The Order includes disparate impact theory as part of the “pernicious movement” that focuses on “irrelevant immutable characteristics, regardless of individual strengths, effort, or achievement.” Enforcement of disparate impact discrimination is now being lumped into the same category of alleged unfair treatment of employees as activities that promote diversity, equity, and inclusion.
What is disparate impact theory?
The Executive Order defines disparate impact theory as when a “presumption of unlawful discrimination exists where there are any differences in outcomes in certain circumstances among different races, sexes, or similar groups, even if there is no facially discriminatory policy or practice or discriminatory intent involved, and even if everyone has an equal opportunity to succeed.” It says that disparate impact requires businesses to “engage in racial balancing.”
However, disparate impact theory is a specifically recognized form of discrimination under Title VII of the Civil Rights Act. First identified by the U.S. Supreme Court in 1971, and later adopted by Congress in 1991, disparate impact discrimination occurs when a facially neutral policy or practice disproportionately impacts people based on their protected class. For example, requiring a credit history check for all new hires may appear facially neutral but may have a disparate impact on lower-income individuals or certain racial groups. This reality led to some states enacting laws that limit the use of credit checks in hiring except under approved circumstances.
Disparate impact discrimination is different from disparate treatment discrimination under Title VII, which occurs when an employer treats one applicant or employee differently than a similarly situated applicant or employee because of that individual’s protected class. Disparate treatment can be more easily identified than disparate impact in that it is, by definition, intentional; whereas disparate impact focuses on the causal effect of the policy or practice.
Does the President have the power to eliminate statutory theories of liability?
As established by the U.S. Constitution, the President cannot change established law enacted by Congress, meaning that he cannot remove disparate impact discrimination from Title VII. This is highlighted by the fact that the Executive Order instructs federal agencies to “deprioritize” enforcement. Moreover, Title VII created the EEOC and charged it with enforcement of Title VII laws. Whether the President can direct federal agencies not to follow their statutory mandates will likely be another issue brought before the courts. Further, based on last year’s Supreme Court ruling in Loper Bright, which overturned the long-standing Chevron decision that gave deference to federal agency interpretations, any legal challenge will be forced to reckon with Title VII itself rather than the EEOC’s interpretations or directives.
What does this mean for employers?
This means that, for now, the EEOC will not be enforcing disparate impact discrimination claims against employers, and may even seek to dismiss its own previously filed lawsuits based on this type of discrimination. Because the Executive Order also seeks to evaluate where disparate impact discrimination enforcement exists, including at the state level, the White House appears to be evaluating how it can challenge these laws more broadly. However, because it remains established law at the federal and, in some cases, state levels, employers are still at risk of being held liable for disparate impact discrimination and should continue to follow applicable federal, state, and local laws.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
Commercial Drivers Must Meet English Proficiency Standards
/in HR Alerts /by ManagEaseAPPLIES TO
All Employers with Employees Subject to the FMCSA
EFFECTIVE
April 28, 2025
QUESTIONS?
Contact HR On-Call
(888) 378-2456
Discussion:
Recently signed Executive Order 14286 directs the Federal Motor Carrier Safety Administration (FMCSA) to enforce existing English proficiency requirements for commercial truck drivers. Titled, “Enforcing Commonsense Rules of the Road For America’s Truck Drivers,” it cites the need for drivers to “read and understand traffic signs, communicate with traffic safety, border patrol, agricultural checkpoints, and cargo weight-limit station officers. Drivers need to provide feedback to their employers and customers and receive related directions in English.” This Order is a further extension of Executive Order 14224, “Designating English as the Official Language of the United States,” that was effective as of March 1, 2025.
Additionally, the Executive Order instructs the FMCSA to “(a) review non-domiciled commercial driver’s licenses (CDLs) issued by relevant State agencies to identify any unusual patterns or numbers or other irregularities with respect to non-domiciled CDL issuance; and (b) evaluate and take appropriate actions to improve the effectiveness of current protocols for verifying the authenticity and validity of both domestic and international commercial driving credentials.”
FMCSA has historically penalized Existing regulations require commercial motor vehicle drivers to “read and speak the English language sufficiently to converse with the general public, to understand highway traffic signs and signals in the English language, to respond to official inquiries, and to make entries on reports and records.” English proficiency violations by issuing citations to the driver and the driver’s employer. The Executive Order now directs the FMCSA to place drivers out-of-service who violate the regulations.
The Executive Order also seeks to improve the working conditions of America’s truck drivers and remove “needless regulatory burdens” that undermine their working conditions. Further guidance is expected on inspection procedures for compliance with regulatory requirements.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
Second Circuit: Employers May Be Required to Provide Accommodations to Employees, Even if They Can Perform the Job Without It
/in HR Alerts /by ManagEaseAPPLIES TO
Employers with Employees in CT, NY and VT
EFFECTIVE
March 25, 2025
QUESTIONS?
Contact HR On-Call
(888) 378-2456
Discussion:
On March 25, 2025, the Second Circuit Court of Appeals issued an opinion in Tudor v. Whitehall Central School District, finding that employees with disabilities may be entitled to reasonable accommodations under the Americans with Disabilities Act (ADA), even if they can perform the essential functions of their jobs without them.
In this case, a high school teacher was diagnosed with post-traumatic stress disorder (PTSD), and requested brief afternoon breaks to manage her condition. The school district denied her request, leading her to file a lawsuit alleging a failure to accommodate under the ADA. The lower court dismissed her claim, but the Second Circuit overturned this decision, emphasizing the ADA’s broader support for employee well-being and inclusion.
Under the ADA, a “qualified individual” is someone who can perform the essential functions of their job with or without reasonable accommodation. The court said this means that employers must consider reasonable accommodations to enhance an employee’s workplace experience, not just those necessary for job performance. The decision aligns with similar rulings from other circuits, underscoring the importance of employer compliance with the ADA’s broad protections.
In light of this ruling, employers should reassess their accommodation policies to ensure they are providing adequate support for employees with disabilities, even if those employees can technically fulfill their job duties without accommodation. This may include considering accommodations that enhance overall workplace experience and employee well-being, rather than focusing solely on those essential for job performance.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
Sixth Circuit: Daily Rate Does Not Align with Exempt Classification
/in HR Alerts /by ManagEaseAPPLIES TO
All Employers with Employees in KY, MI, OH, TN
EFFECTIVE
April 1, 2025
QUESTIONS?
Contact HR On-Call
(888) 378-2456
Discussion:
In Pickens v. Hamilton-Ryker IT Solutions, the Sixth Circuit Court of Appeals said that an employee cannot be paid a daily rate and still be classified as exempt under the Fair Labor Standards Act (FLSA). Here, an employee regularly worked more than 50 hours per week at $100 per hour but was guaranteed pay each week for the equivalent of 8 hours (based on 8 hours of pay at his $100 hourly rate), with every subsequent hour paid hourly. His employer classified him as salaried exempt, and therefore did not pay him overtime.
The FLSA allows salaried exempt employees to be paid in two ways. First, an employee must be paid “a predetermined amount” “on a weekly[] or less frequent basis” and be paid the full amount for any work performed in a workweek.” Second, employees whose earnings are “computed on an hourly, a daily, or a shift basis” nonetheless receive a “salary” if they are guaranteed a certain amount per week that is “roughly equivalent” to their “usual earnings.”
The court said that to be paid on a weekly basis, an employee must be paid for a regular week’s worth of work. The fact that the “payment is weekly must not be merely incidental to the payment; the week must serve as the fundamental unit around which the payment is structured.” The court here said the employee was guaranteed payment for a single day’s work, but was not paid a salary. Unlike a weekly rate, which compensates an employee for a week’s work, no matter the number of hours worked, the rate the employee received compensated him for either an hour’s work or eight hours’ work. Moreover, the employee’s hourly rate (paid on average for 52 hours a week) cannot be described as merely “additional compensation” to his eight-hour “salary.” All of his pay was based on a fixed hourly rate for hours worked within the normal workweek, which meant that he was improperly classified as overtime exempt.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
Arkansas: Earned Wage Access Services Act
/in HR Alerts /by ManagEaseAPPLIES TO
All Employers with Employees in AR
EFFECTIVE
As Indicated
QUESTIONS?
Contact HR On-Call
(888) 378-2456
Discussion:
HB 1517 enacts Arkansas’s Earned Wage Access Services Act (EWA) and goes into effect 90 days after the state legislature adjourns. The EWA allows employees to access their wages as they are earned through consumer-directed, earned wage access services. The services are defined as “the business of delivering to a consumer access to earned but unpaid income based on the consumer’s representation and the provider’s reasonable determination of the consumer’s earned but unpaid income.”
Earned but unpaid income is “salary, wages, compensation, or other income that a consumer or an employer has represented, and that a provider has reasonably determined, has been earned or has accrued to the benefit of the consumer in exchange for the consumer’s provision of services to an employer or on behalf of an employer.”
While EWA service providers are not required to be registered or licensed in the state, the EWA does require such providers to:
Additionally, providers cannot share a portion of any fees, tips, gratuities, or other donations received from a consumer with the employer, require a credit report or credit score to determine a consumer’s eligibility for services, accept payment by means of a credit card, charge consumers fees or other penalties for failure to pay outstanding proceeds, or compel a consumer to pay through prohibited means, sell the outstanding proceeds to a debt buyer or collector, mislead or deceive a consumer, or advertise any false statements about the services.
Arkansas now joins a limited number of states that regulate EWA services. However, legislation is pending in several states demonstrating a push to regulate these services more broadly.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
California: Final Regulations for Automated Decision-Systems
/in HR Alerts /by ManagEaseAPPLIES TO
Employers with Employees in CA
EFFECTIVE
As Indicated
QUESTIONS?
Contact HR On-Call
(888) 378-2456
Discussion:
On March 21, 2025, the California Civil Rights Department (CRD) voted to approve final regulations titled “Employment Regulations Regarding Automated-Decision Systems,” which clarify that it is unlawful to use AI and automated decision-making tools to make employment-related decisions that discriminate against applicants or employees in violation of California laws. Key aspects of the final regulations are summarized below.
Definitions. The following key terms are defined under the final regulations:
Unlawful Selection Criteria. The final regulations confirm that it is “unlawful for an employer or other covered entity to use an automated-decision system or selection criteria (including a qualification standard, employment test, or proxy) that discriminates against an applicant or employee or a class of applicants or employees on a basis protected” by FEHA.
Pre-Employment Practices. The final regulations clarify that online application technologies and automated-decision systems that screen, rank, or prioritize applicants based on certain criteria may result in unlawful discrimination against individuals with protected characteristics, such as religious creed, disability, or medical condition, unless accommodations are provided. These systems, which may assess skills, reaction times, or analyze physical characteristics, must ensure reasonable accommodations to avoid discrimination based on race, national origin, gender, or other protected traits.
Criminal History Inquiries. California law requires employers to make an individualized assessment of an applicant’s criminal record to determine its relevance to the job before denying employment. The final regulations confirm that employers must continue to comply with these requirements even when using an automated system to consider criminal histories.
Medical Inquiries. The final regulations reaffirm that the rules against asking unlawful medical or psychological questions apply even when using an automated-decision system. This includes specifically, any puzzles or games administered by an automated-decision system that are “likely to elicit information about a disability.”
Third-Party Liability. The final regulations state that prohibitions on aiding and abetting unlawful employment practices apply to automated decision-making systems, potentially implicating third parties involved in their design or implementation. Evidence of anti-bias testing and efforts to avoid discrimination is relevant to claims of unlawful discrimination. However, the regulations do not establish third-party liability for the design, development, advertising, promotion, or sale of these systems.
The final regulations have been submitted to the California Office of Administrative Law for review and approval. Once the final regulations are approved by the Office of Administrative Law and published by the Secretary of State, they will likely become effective on July 1, 2025. Employers should continue to monitor their use of AI to assess compliance with applicable anti-discrimination laws and requirements.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
California: Prospective Meal Period Waivers are Enforceable
/in HR Alerts /by ManagEaseAPPLIES TO
All Employers with Employees in CA
EFFECTIVE
April 21, 2025
QUESTIONS?
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(888) 378-2456
Discussion:
In La Kimba Bradsbery v. Vicar Operating, Inc., the California Court of Appeal said that revocable, prospective meal period waivers are enforceable in the absence of any evidence that the waivers are unconscionable or unduly coercive.
Here, employees claimed they were owed meal premiums for not being permitted to take their meal period by the fifth hour of work, as required in California. However, employees had signed meal waivers that said: “I hereby voluntarily waive my right to a meal break when my shift is 6 hours or less. I understand that I am entitled to take an unpaid 30-minute meal break within my first five hours of work; however, I am voluntarily waiving that meal break. I understand that I can revoke this waiver at any time by giving written revocation to my manager.”
According to Wage Order Nos. 4 and 5 at issue, the meal period may be “waived by mutual consent” under prescribed circumstances, consistent with Labor Code § 512. However, there are no restrictions on the timing and form of the permitted waiver. Generally, waiver is defined as an “intentional relinquishment of a known right after knowledge of the facts.” Where signing the waiver is voluntary and may be revoked at any time, the waivers are enforceable. Nothing in the statute and regulations, or the legislative intent, indicates an intent to prohibit prospective written waivers.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase
California: Representative PAGA Claim Barred by Individual Claim Statute of Limitations
/in HR Alerts /by ManagEaseAPPLIES TO
All Employers with Employees in CA
EFFECTIVE
April 22, 2025
QUESTIONS?
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(888) 378-2456
Discussion:
In Williams v. Alacrity Solutions Group, LLC, the California Court of Appeal said that a plaintiff whose individual Private Attorneys General Act (PAGA) claim was barred by the statute of limitations may not revive their claim through a representative-only PAGA claim. Here, the employee filed a PAGA claim beyond the one-year statute of limitations period. When challenged as being time-barred, the plaintiff claimed that even though the individual PAGA claim may be time-barred, the representative claim could still proceed.
PAGA establishes three “prerequisites” that a private individual must satisfy before serving as a PAGA plaintiff: (1) a private individual must be an “aggrieved employee;” (2) advance written notice of the claim must be given to the employer and the California Labor & Workforce Development Agency; and (3) the plaintiff must satisfy the statute of limitations. The court determined that the statute of limitations is tied to the PAGA plaintiff’s individual claims. Absent an individual claim, there is no way for a court to evaluate whether any claim is timely because PAGA does not obligate the PAGA plaintiff to “define” who the “‘aggrieved employees’ [are] in the prelitigation notice.” Moreover, the court said that to be a PAGA plaintiff (under the statutes in effect prior to July 1, 2024), a private individual must, among other things, seek to recover civil penalties on his own behalf for that violation, which means that his individual claim must be timely.
Action Items
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase