4 Midyear Employer Actions To Reinforce Compliance

Lisa Haldar

Allegra Lawrence-Hardy

As 2025 began, employers were tasked with steering through a rapidly shifting legal, regulatory and cultural environment.

Over the past six months, we’ve witnessed sweeping federal actions aimed at dismantling what the government describes as unlawful diversity, equity and inclusion initiatives — alongside conspicuous federal inaction on key compliance fronts such as the employer information report known as EEO-1 and the Fair Labor Standards Act exemption salary threshold.

At the same time, some state and local governments have accelerated their efforts to fill regulatory gaps, asserting greater influence over employment policy.

Now, at the year’s midpoint, it’s a critical moment to evaluate progress, recalibrate priorities and refocus on areas of emerging risk and opportunity.

This midyear update spotlights four employer actions — each one essential to staying compliant, competitive and aligned with a long-term workforce strategy.

Continue strategic navigation of the shifting DEI landscape.

As anticipated, the legal and political landscape surrounding unlawful DEI initiatives has become increasingly complex over the past six months.

The Trump administration has taken aggressive steps to dismantle DEI-related policies through a series of executive actions and regulatory rollbacks, creating significant uncertainty across both the public and private sectors. Companies and courts remain deeply divided.

Some major corporations — such as McDonald’s Corp. and Ford Motor Co. — have scaled back their DEI programs, while others, including Apple Inc. and Costco Wholesale Corp., have publicly reaffirmed their commitment to fostering inclusive and diverse workplaces.

On the legal front, the U.S. Court of Appeals for the Fourth Circuit, in National Association of Diversity Officers in Higher Education v. Trump, stayed a lower court’s permanent injunction against enforcement of Executive Order No. 14173 and Executive Order No. 14151 in March.[1]

Executive Order No. 14173 directs the termination of “illegal discrimination in the federal government” and “[e]ncourag[es] the private sector to end illegal DEI discrimination and preferences,”[2] while Executive Order No. 14151 mandates the dismantling of DEI programs within federal agencies.[3]

In a parallel development, the U.S. District Court for the District of Columbia, last month in National Urban League v. Trump, upheld both Executive Orders No. 14151 and 14173 and also declined to enjoin Executive Order No. 14168 directing federal agencies to enforce sex-based protections and accommodations based on biological sex.[4]

The same day, in Perkins Coie LLP v. U.S. Department of Justice, the District of Columbia permanently blocked enforcement of Executive Order No. 14230 — which directs the U.S. Equal Employment Opportunity Commission to “review the practices of representative large, influential, or industry leading law firms” for compliance with Title VII[5] — declaring the executive order “unlawful because it violates the First, Fifth, and Sixth Amendments to the U.S. Constitution.”[6]

Adding to the fragmented judicial landscape, Executive Order No. 14151 has otherwise been enjoined, at least in part, by the U.S. District Court for the District of Rhode Island in the March 6 decision in New York v. Trump, and the U.S. District Court for the Northern District of Illinois in the March 27 decision in Chicago Women in Trades v. Trump.[7]

Against this backdrop of conflicting rulings and divergent corporate positions, one broader trend is reflected among employers: maintaining DEI initiatives that are both mission-aligned and legally sound.

Given the shifting landscape, organizations should continue to proactively assess their DEI frameworks to ensure they remain compliant with evolving legal standards while staying aligned with company values and long-term talent strategies.

Be aware of what has and hasn’t changed about EEO-1 reports.

Last summer, under the prior administration, the EEOC announced its plan to issue a proposed rule in January that would require employers to collect pay data as part of their annual EEO-1 submissions.

January came and went without the EEOC issuing that rule. Whether the EEOC will ever seek to revive this compensation reporting requirement for employers — it did so briefly in 2017 and 2018 — remains to be seen. That said, the EEOC did announce, in April, the 2024 EEO-1 data collection window, which officially opened on May 20.

While the reporting period is shorter than usual, employers who have not yet submitted their data have until 11 p.m. EDT on June 24.

Note that for this year’s reporting cycle, the EEOC has removed the option to report nonbinary gender identities, limiting employers to binary gender options — i.e., male or female — for reporting employee counts by sex, job category, and race or ethnicity.

Ensure your organization’s compliance teams are aware of the reporting requirements and are on track to submit accurate data before the deadline.

Remain vigilant in classifying exempt employees.

Last November, in Texas v. U.S. Department of Labor, the U.S. District Court for the Eastern District of Texas invalidated the DOL’s FLSA earnings threshold rule — a rule that had increased the salary threshold to $58,656 annually by July 1, 2024, for the FLSA white collar exemptions, which include the executive, administrative and professional exemptions — and returned the threshold to $35,568 annually.[8]

While the DOL appealed to the U.S. Court of Appeals for the Fifth Circuit, most predicted that the ruling would be the end of the road for the DOL’s rule — considering the then-incoming administration.

Unsurprisingly, in April, the DOL requested — and was granted — a stay of appellate proceedings, explaining that the DOL was reconsidering its rule given “the recent change in administration” and “new Department of Labor leadership.”[9]

In effect, the DOL’s FLSA earnings threshold rule appears shelved, if not entirely abandoned. Nevertheless, employers should remain alert for updates and remember that simply because an employee makes $35,568, or more, does not mean they are automatically exempt from the overtime and minimum wage rules.

The salary test is just one part of the exemption analysis; the job duties test requires employees to primarily perform executive, administrative or professional duties as defined by the DOL. Now is an opportune moment to revisit exemption classifications and ensure they align with current law.

Continue to monitor changes to state and local employment laws.

As anticipated, state and local governments are increasingly taking the lead on employment regulation in response to a more restrained federal posture. In the first half of 2025, we’ve seen a notable acceleration in state and municipal activity, underscoring the importance of maintaining agile compliance strategies across jurisdictions.

For example, with the Federal Trade Commission‘s proposed noncompete rule effectively stalled, several states have taken independent action: Wyoming passed a law banning most noncompete agreements executed on or after July 1.[10]

Montana expanded its noncompete prohibition to include healthcare roles such as registered nurses, advanced practice nurses and physician assistants.[11] Indiana further restricted physician noncompetes with hospitals and affiliated entities, rendering most agreements void if entered into on or after July 1. [12]

On the anti-discrimination front, the City of Minneapolis enacted an ordinance, effective Aug. 1 for employers in the city, adding height, weight and justice-affected status, i.e., criminal history, to its list of protected classes.[13]

At the other extreme, Iowa became the first state to remove gender identity as a protected class from the state’s antidiscrimination statute.[14] These changes reinforce a broader trend: employment law is becoming increasingly decentralized.

Employers operating nationally must proactively monitor and adapt to jurisdiction-specific requirements to ensure compliance and mitigate litigation and reputational risk.

Conclusion

This midyear juncture offers more than just a moment to check the boxes — it presents a strategic opportunity to reinforce your organization’s commitment to legal integrity, workplace equity and long-term operational resilience.

By staying ahead of compliance developments and aligning employment practices with both risk management and business goals, employers can continue to lead with confidence and clarity through whatever changes lie ahead.

Correction: A previous version of this article misstated the holding in Perkins Coie LLP v. U.S. Department of Justice. The error has been corrected.

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Lisa Haldar is a partner and Allegra Lawrence-Hardy is a co-managing partner at Krevolin & Horst LLC.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of their employer, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] Order, Nat’l Ass’n of Diversity Officers in Higher Educ. v. Trump, No. 25-1189 (4th Cir. Mar. 14, 2025), ECF No. 29.

[2] Exec. Order 14173,90 Fed Reg. 8633 (Jan. 21, 2025).

[3] Exec. Order 14151, 90 Fed. Reg. 8339 (Jan. 29, 2025).

[4] See Exec. Order 14168, 90 Fed. Reg. 8615 (Jan. 20, 2025); Nat’l Urb. League v. Trump, No. CV 25-471 (TJK), 2025 WL 1275613 (D.D.C. May 2, 2025).

[5] Exec. Order No. 14230, 90 Fed. Reg. 11781 (Mar. 6, 2025).

[6] Perkins Coie LLP v. U.S. Dep’t of Just., No. 25-716 (BAH) (D.D.C. May 2, 2025).

[7] See New York v. Trump, No. 25-cv-39-JJM-PAS, 2025 WL 715621 (D.R.I. Mar. 6, 2025), appeal filed, Heghmann v. Trump, No. 25-1413 (1st Cir. Mar. 6, 2025); Chi. Women in Trades v. Trump, No. 25 C 2005, 2025 WL 933871 (N.D. Ill. Mar. 27, 2025).

[8] Texas v. United States Dep’t of Lab. , 756 F. Supp. 3d 361, 368 (E.D. Tex. 2024)

[9] Unopposed Motion to Hold Appeals in Abeyance, Texas v. U.S. Dep’t of Lab., No. 24-4077 (5th Cir. Apr. 24, 2025), ECF No. 37.

[10] https://wyoleg.gov/Legislation/2025/SF0107.

[11] https://legiscan.com/MT/bill/HB128/2025.

[12] https://iga.in.gov/legislative/2025/bills/senate/475/details.

[13] https://lims.minneapolismn.gov/File/2024-00563.

[14] https://www.legis.iowa.gov/legislation/BillBook?ga=91&ba=SF%20418.