In the second part of the two-part Workplace Strategies Watercooler 2025 podcast series on changes employers can expect from the new administration, Jim Plunkett (shareholder, Washington, D.C.) continues his discussion on post-election policy changes with three additional panelists. Stacy Bunck (shareholder, Kansas City) covers the recent changes at the U.S. Equal Employment Opportunity Commission (EEOC), including the Commission's new makeup, its impact on the agency's priorities and actions, and how employers can comply with recent EEOC guidance on diversity, equity, and inclusion (DEI) policies and the Pregnant Workers Fairness Act (PWFA). Next, Tina Ho (shareholder, Washington, D.C.) discusses the new administration's immigration policy actions, which include increased vetting procedures and secondary inspections, delays in processing times for visa and green card applications, revocations in visa status and visa stamps, and employee reporting obligations. Stephanie Smithey, a shareholder in the firm's Indianapolis office and co-chair of the Employee Benefits and Executive Compensation Practice Group, wraps up the discussion by focusing on the new administration's goal to deregulate and streamline rules. She covers topics such as mental health parity compliance, HIPAA privacy regulations, environmental, social, and governance (ESG) investing rules, cryptocurrency, and more.
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Jim Plunkett: All right. This is part two of our post-election policy change discussion from Workplace Strategies 2025 in Las Vegas. My name is Jim Plunkett, and I'm in Ogletree Deakins Washington D.C. office. I'm going to start with Stacy Bunck, a shareholder from our Kansas City office. And Stacy is going to talk to us about the Equal Employment Opportunity Commission. So, Stacy, let's talk first about the makeup of the commission, who's sitting in those commissioner chairs? What's happening with the current membership there, and how is this impacting actions that EEOC is taking?
Stacy Bunck: Thanks, Jim. So, listeners may
remember that there are five seats at the EEOC. And per the
five-seat rule, no more than three members can come from one of the
same political parties, and that's really designed to ensure a
balance of perspectives within the commission. And in the first few
weeks of the Trump administration, as expected, the President
appointed Andrea Lucas as the acting chair of the EEOC. What was
unexpected and unprecedented was he terminated two of the three
sitting EEOC commissioners, Charlotte Burroughs and Jocelyn
Samuels, prior to the expiration of their terms. And that left only
Chair Lucas and one remaining commissioner at the EEOC. And there
has been some litigation that's come of that. Samuels has filed
suit, and Burroughs has issued a statement through counsel, which
indicates she may be filing suit, as well. So, the practical impact
of this is that there's a lack of quorum. And in early
February, the EEOC issued an FAQ on the impact of that lack of
quorum so that employers can understand what they can and can't
do at the EEOC until that quorum is restored.
First off, the lack of quorum does not impact things such as
intake, processing, investigation, resolution of charges, and
issuance of rights to sue. On the flip side, the lack of quorum
does prohibit the EEOC from engaging in rulemaking, issuing new
policies, rescinding guidance, starting systemic litigation, and
starting litigation contrary to precedent. So, those types of
activities we don't expect to see again until there's a
quorum. And I have heard that there are some people being
considered for those seats, and so I anticipate there'll be
some changes, and to stay on the new cycle to see whether
there'll be some nominations made for those seats in the near
future.
Jim Plunkett: So, Stacy, Acting Chair Lucas definitely has a new set of priorities, almost sort of in a bad face from the previous chair, Charlotte Burroughs. Tell us about what those priorities are, how they impact employers, and in particular, employers' DEI training, and if you have any recommendations for employers on how they can comply with recent EEOC guidance.
Stacy Bunck: Absolutely. So, when she was
appointed chair, Chair Lucas announced several priorities,
including what she says is rooting out unlawful DEI-motivated race
and sex discrimination, protecting American workers from
anti-American national origin discrimination, defending the
biological and binary reality of sex and related rights including
women's rights to single sex spaces at work, protecting workers
from religious bias and harassment including anti-Semitism, and
remedying other areas of recent under-enforcement. And so,
she's announced those priorities. Again, once we have a quorum,
there'll probably be more action on those. But in the interim,
for our clients who have DEI and DEI training, there are a few
things that they should consider in the interim to comply with the
organization at this time under the administration.
So first, if you have DEI within your organization, consider
conducting a privileged assessment of that training to ensure
compliance with the current guidance and also to tailor your
training to address the specific issues you have identified within
your own workforce. During that training, it would be helpful to
remind your hiring managers to focus on not narrowing the
recruiting process to achieve DEI goals, but instead being more
expansive and more inclusive. For those clients and employers who
have employee resource groups, consider training your ERG leaders
to ensure they're welcoming of everyone, not just allies, and
inviting everyone to the table to participate in trainings and
leadership opportunities.
Jim Plunkett: So, let's pivot to the Pregnant Workers Fairness Act, Stacy. It's been around for a couple of years now, and I feel like we have a pretty good sense of what it requires of employers over these last couple of years, but now that we've got Acting Chair Lucas in charge, we know that she has some particular views about the PWFA. What are the potential changes that we might see relating to the PWFA now that we have new leadership at the commission?
Stacy Bunck: So, Chair Lucas has been very
vocal in her opposition to inclusion in the PWFA regulations of the
right to an accommodation to seek an abortion. She voted against
the final rules under the PWFA, claiming they broaden the statute
in ways that couldn't be reconciled with the text. And
following the Supreme Court's decision in Dobbs v. Jackson
Women's Health Organization, which people recall was an
overturning of Roe v. Wade, she initiated several
commissioner charges against companies offering abortion travel
benefits ostensibly on the basis that such benefits might
constitute discrimination against pregnant workers who choose to
carry pregnancies to term.
And there is pending litigation challenging parts of the Pregnant
Workers' Fairness Act related to reasonable accommodations for
employees seeking an abortion. And in February, the Eighth Circuit
Court of Appeals ruled that 17 states had standing to challenge
those parts of the Pregnant Workers' Fairness Act. So, once a
quorum is reestablished, we anticipate that the EEOC might
promulgate revised regulations under the PWFA to remove the
requirement that employers make reasonable accommodation for
employees having elective abortions. So, if that is something that
your entity provides, again, it would be a good idea to keep an eye
on what the EEOC is doing in that regard to make sure you remain
compliant with the new administration.
Jim Plunkett: Great insights. Thank you so much, Stacy, really appreciate you joining us.
Stacy Bunck: My pleasure. Thanks for having me.
Jim Plunkett: All right. Next, I'm going to turn to Tina Ho from our Washington, D.C. office, who is going to talk to us about immigration policy. Obviously, Tina, immigration is a major policy priority for the new administration. And since January 20th, we've seen a significant surge in activity within this policy area, particularly with an emphasis on border security, humanitarian initiatives, and deportations. How have these immigration policy measures impacted employers?
Tina Ho: Thanks, Jim. It's been crazy.
Since January 20th, there have been 254 immigration policy actions.
We're still getting most of our Visa applications approved
without issues, but I'm going to walk through a few impacts to
employers. Extreme vetting procedures have resulted in additional
scrutiny upon entry. We're seeing an increase in secondary
inspection and border searches of electronic devices by CBP for
visa holders, lawful permanent residents, and U.S. citizens. While
most do not have issues, a few individuals have been detained,
denied entry, or requested to give up their green cards when trying
to enter the U.S. based on prior criminal activity, incorrect
immigration documents, or participation in certain protests.
This is also a result of enhanced social media vetting by the
Department of State. In addition to extreme vetting procedures,
federal employee layoffs, budget cuts, and hiring freeze have
resulted in an increase in processing times on Visa applications,
which have an impact on employees' ability to travel, obtain a
visa stamp, or renew their driver's license. We're also
seeing slower processing times for green card applications, and
unavailability of green card numbers has cost interruptions in work
authorization. We've also seen increased wait times for visa
appointments at certain consulates, which is delaying the ability
to bring employees into the U.S. or impacting urgent business
travel. Finally, early termination and changes to humanitarian
programs have caused a lot of employer confusion. Employers are
uncertain of how to identify these individuals whose work
authorizations were impacted. How do you update I-9s, and even how
do you manage the sudden loss of work authorization?
Jim Plunkett: So, in particular, Tina, I think the administration, it seems like in the last month or so, has really gotten their legs underneath them, and there's just been this flurry of activity in the immigration arena. Talk about trends that you're seeing.
Tina Ho: Sure. So, starting April 11th, all
foreign nationals 14 and older must register and be fingerprinted.
Most of the employees have already met this requirement, but their
non-U.S. citizen children who entered before turning 14 may not be
registered. Additionally, all non-U.S. citizens 18 and older must
carry proof of registration at all times. Failure to register or
carry proof is a misdemeanor, potentially resulting in fines,
imprisonment, or both. And these penalties extend to parents of
unregistered children. All foreign nationals must also report a
change of address within 10 days. That's not a new requirement,
but failure to report a change of address is also considered a
misdemeanor and may be considered a deportable offense. Some of you
may have already seen an increase in emails on this, as they just
opened up the portal for individuals to register. Second, consulate
embassies are sending visa revocation notices to certain foreign
nationals, often targeting those with prior criminal activity or
discrepancies in immigration filings.
What's alarming is that criminal activity seems to include an
arrest, even if there's not a conviction. Consulates may not
always notify individuals of revocations, or notices may be sent to
outdated email addresses. A visa revocation itself does not
invalidate an individual's status. However, if a person is
outside the U.S. and their visa is revoked, they can't return
until they obtain a new visa stamp at a U.S. consulate. This month,
some F-1 international students have had their CBIS records
abruptly terminated. Terminations appear to be focused on
individuals who may have any record of criminal activity or have
been involved in protests on or off campus. There have been
multiple lawsuits filed by individuals and groups of students,
resulting in quick temporary restraining orders directing the
government to reinstate student status. Actually, there's a
hearing for a preliminary injunction scheduled today.
In the past two weeks, employers are receiving notices from USCIS,
which state that they have discovered potentially adverse
information about the employee. To continue processing the
application, USCIS requires the employee's updated address to
collect biometrics. This is a new trend, and we are closely
monitoring what arises from these biometric appointments. And
finally, the Supreme Court will hear arguments on the birthright
citizenship issue on May 15th. Jim, turning it over to you, I know
there are a few bills that have been introduced, including
elimination of F-1 OPT, which is student work authorization. Is
there any pending legislation that employers should be particularly
concerned about potentially passing?
Jim Plunkett: It's a great question, Tina.
We've been talking so much about the agencies, and so
obviously, a lot of people are wondering, well, what's Congress
doing in this immigration policy arena? I think with the current
state of our politics, it's pretty safe to say that we're
not going to see comprehensive immigration legislation passing
Congress anytime soon. But our listeners should be aware of two
things. First is bills like that F-1 OPT bill that you mentioned,
we're going to see a lot of those. But those are very partisan
bills that are designed as messaging bills, bills to drive
particular narratives, to advance particular talking points, maybe
to put certain legislators on the floor to take difficult votes
from a political standpoint. Those are not going to pass the
Senate, and they won't make it to the President's desk. The
second area to watch is immigration spending, and that does have a
really good opportunity to become law because it's going to get
wrapped up into a larger spending bill that Republicans are in the
process of moving.
That also includes policy changes to taxes and energy production
and military spending. And so, that immigration spending, if they
include that in that bill and it's able to pass, that'll do
stuff like fund more border security technology measures on the
southern border, allow them to hire more enforcement officials, and
the like. But it will not make policy changes to employment-based
immigration. With that, Tina, it seems like maybe a lot of bad news
for employers, but do you have any, maybe, few nuggets of good
news, a few takeaways that you can leave for our listeners in this
area?
Tina Ho: It's a lot of pressure. But there are three things that employers should be hyper-focused on. As I mentioned, delays in processing times, denials and revocations due to adverse information, or delays and detainment of employees when entering the U.S. All three things can result in a sudden loss of work authorization. Employers should be looking at their current policies now, such as unpaid leave if an employee is in the U.S., or can the employee work abroad. Also, think about how much support you provide to individual employees where their loss of work authorization is due to personal circumstances, such as criminal convictions. We continue to see a lot of cases approved without any issues and without any requests for evidence.
Jim Plunkett: Fantastic insights. Thank you so much, Tina. Really appreciate you joining us today. And last but not least, I am delighted to be joined by Stephanie Smithey from our Indianapolis office, and Stephanie is going to discuss with us employee benefits issues. So, Stephanie, we've been talking with our other panelists about the new administration and changes in D.C. Talk about the people who are making these changes in the employee benefits arena.
Stephanie Smithey: Sure, Jim. Thanks for the
introduction and thanks for having me today. As other panelists
have mentioned, personnel is policy, and so we are closely watching
the changes in the various agencies who regulate employee benefit
plans. So, our starting point, of course, is at the Department of
Labor where Keith Sonderling has been confirmed as the Deputy
Secretary of Labor, and he has really laid out his vision for the
EBSA, which is the Employee Benefit Security Administration.
That's the Department of Labor that regulates employee benefit
plans. And Mr. Sonderling's vision is that he will be leading
with compliance assistance, making sure employers have all the
information and knowledge and resources they need. And he has a
goal of simplifying regulatory efforts in this area, which I know
we would all love to see. Overall, he thinks employers will be
really happy to have Daniel Aronovitz, the new head of EBSA, in
place.
So, he was the leader at Encore Fiduciary Liability Insurance. So,
he has spent the last several years seeing all of the class action
litigation against employers relating to benefit plans, primarily
401K fee litigation and those fiduciary breach claims, he's
been one of the holders of the purse springs on that. So, Mr.
Aronovitz has been an outspoken critic of the way the courts have
been handling ERISA litigation. He's actually proposed
specialized ERISA courts so that some of these inconsistent rulings
and widespread litigation could be reined in. So, overall it's
viewed that the new head in this area will be employer-friendly and
will be a welcome change. But in the benefits plan world, we
don't only look at the Department of Labor because our benefit
plans are regulated by several other agencies, including the PBGC
which is the federal that re-insures pension plans, the IRS, which
obviously with not just retirement plans which are tax-deferred but
your health and welfare plans have either tax-free or tax-preferred
benefits.
We have a lot of regulation and oversight at the IRS. Health and
Human Services regulates health plans and is a key actor under the
Affordable Care Act. And then the SEC is involved in executive
compensation and equity compensation for public companies. So, in
the benefits plan and executive comp space, we're watching all
of those agencies where, frankly, there are still lots and lots of
openings, and I'm not sure that the Senate can confirm people
fast enough to fill all those openings in the four years we have.
One of the consequences of having the split term is that the folks
who were in place in Trump 1.0 are no longer in place. So, although
the new administration has been hitting the ground running on
filling those vacancies, the Senate confirmation process slows
things down. So, I expect that we will have a lot of delay until
people get in place in those agencies.
This will all impact employers in the sense of uncertainty about
what the rules are. One of the things that we've heard is the
new administration has given a directive to deregulate. For every
new rule, 10 old rules are supposed to be eliminated. And we've
heard the leaders question whether that's even possible to find
10 rules to eliminate, particularly in some of these smaller
agencies. So, what we may see is just not a whole lot of new rules,
maybe some effort to revise existing rules. This can really cut
both ways for employers, and we've seen that in the wake of the
Chevron v. Loper-Bright consequences, where for the past
30 or more years, the courts have been deferring to agency
regulation. And now, under the Loper-Bright standard,
courts don't have to defer anymore; they can decide whether
they think a rule is reasonable or not.
Employers might think that's a welcome change because if
regulations in this space are not viewed as reasonable, there might
be an opportunity to challenge those rules. On the other hand, if
you've been complying with the rules and you get challenged by
employees, your defense that you've acted in good faith
compliance may no longer be a good defense if that rule isn't
upheld by the court, since they don't have to defer to it
anymore. So, just widespread confusion about what's really
going to happen, what rules can we rely upon, and what rules should
we be following? And with all the openings and staff cuts
happening, I don't see that confusion really clearing up
quickly.
Jim Plunkett: So, Stephanie, you talked generally about the administration's desire to streamline rules, maybe revise existing rules. And I think that's great, and I think employers would look forward to that. Can you flesh that out a little bit more and talk a little bit more specifically about what regulatory changes we might expect once we get all the political people in place?
Stephanie Smithey: Yeah, absolutely. And the
thing that I want to start with is mental health parity. This has
been plaguing our employer clients for years now because of the
uncertainty and what it takes to demonstrate that your health plan
complies with the mental health parity rules. From what we see, our
clients are working very hard to make sure their health plans are
designed to provide mental health and substance use disorder
benefits on par with medical and surgical benefits. But when it
comes to demonstrating that those plans are actually operating in a
parity environment, it is difficult to know what it takes to prove
that, because the rules keep changing. Every year, the Department
of Labor has been doing a report to Congress on their enforcement
and audit activities in this space, and we are continually hearing
that the Department of Labor is not satisfied that employers are
demonstrating compliance.
So, where are we? We have new final rules that were passed last
year, and they're even more burdensome and more expensive and
more difficult to comply with. We have very few providers that can
do the data analytics needed to demonstrate compliance. Those rules
were supposed to take effect January of this year, and some of them
January of next year, and they really are demanding and financially
burdensome. So, in the meantime, the funding for mental health
parity compliance has expired. So, we don't know whether the
new Department of Labor under Trump 2.0 will actually enforce these
new rules. There was a lawsuit filed by the ERISA Industry
Committee on January 17th, right before inauguration, challenging
these new rules as agency overreaching. So, we frankly don't
know whether the new agency under the new administration will even
be interested in defending those new rules. So, a lot remains to be
seen there, and I know employers would welcome clarity and some
relief from that.
Another thing we're waiting and watching to see is what will
happen with the new HIPAA privacy regulations that were amended in
December of last year to add special protections for reproductive
healthcare records. Everyone probably knows HIPAA privacy are rules
that have been around for a long time that require medical
providers and health plans to keep medical information private and
to apply certain restrictions on how that information can be used
and disclosed. After last year's amendments to the HIPAA
privacy rules, reproductive healthcare records have extra layers of
protection. Many of which are designed to basically provide extra
protection against law enforcement efforts to get to medical
records relating to reproductive healthcare. So, we don't know
whether the Trump administration will support those rules or
abandon them. We have heard that they're not in favor of those
rules, but we're waiting to see. So, employers who are looking
at updating their privacy policies and procedures for their health
plans are going forward with that compliance in the meantime.
Another example of kind of a ping pong effect are the ESG investing
rules, and these are rules issued by the Department of Labor that
apply to investments in 401(k) plans in particular. These rules
have gone back and forth several times, and the issue is whether
planned fiduciaries who select the investments for the 401k plans
can take into account environmental, social and governance factors
when selecting a prudent investment. Under the most recent Biden
administration approach, it was permissible to look at the ESG
factors if the investments were otherwise equivalent. But under
Trump 1.0, that was not a permissible consideration; employers,
plan fiduciaries could only look at pecuniary factors. So, monetary
factors, not ESG principles. We expect that the Department of Labor
under Trump 2.0 will go back to the prior standard so that ESG
investing will no longer be a permissible factor to take into
account.
And I already have seen many of our clients taking a look at their
investment policy statements and their fund lineup and eliminating
some of those funds that may have been selected for the ESG
factors. And the last thing I'll mention quickly is
cryptocurrency. Under the Biden administration, the Department of
Labor had issued kind of informal guidance indicating that
cryptocurrency is not a prudent investment option for 401(k) plans.
So, most employers have stayed away from that. Not clear that the
Trump administration takes the same approach, so we may see a
change in policy there. So, we'll just have to wait and see on
that one, Jim.
Jim Plunkett: Thank you so much, Stephanie. That's really great information. Really appreciate you joining us.
Stephanie Smithey: Great. Thanks for having me.
Jim Plunkett: And that concludes part two of our post-election discussion on the changing employment landscape that we delivered from Workplace Strategies 2025 in Las Vegas. Thank you.
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