President Trump Eliminates Affirmative Action and Anti-Discrimination Requirements on Federal Contractors (US)

Among the barrage of executive orders signed by President Trump upon assuming office was an order revoking a longstanding Executive Order that placed affirmative action requirements on federal government contractors. On January 21, 2025, President Trump signed an Executive Order entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” revoking Executive Order 11246 based on the President’s position that it perpetuated “illegal discrimination in the Federal Government.”

Executive Order 11246 – signed by President Lyndon B. Johnson in 1965 – prohibited federal contractors from discriminating in employment decisions on a wide range of protected characteristics, including race, color, religion, sex, sexual orientation, gender identity, and national origin. EO11246 specifically applied to employers, including construction contractors and subcontractors, with contracts valued in excess of $10,000 with the federal government business in one year. Additionally, EO11246 required government contractors to take affirmative action to ensure that equal opportunity was provided in all aspects of employment and prohibited retaliation against job applicants and employees for asking about, discussing, or sharing pay information.

President Trump’s January 21 order directs the federal contracting process be “streamlined to enhance speed and efficiency, reduce costs, and require Federal contractors and subcontractors to comply with our civil-rights laws.” Specifically, the Order directs the Office of Federal Contracting Compliance Programs (OFCCP) within the U.S. Department of Labor, which was tasked with enforcing EO11246, to immediately cease the following actions: promoting “diversity;” holding federal contractors and subcontractors responsible for taking “affirmative action;” and allowing or encouraging federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin. Additionally, contracting agencies now must include in all federal contracts a term requiring that contractors certify that they do not “operate any programs promoting [diversity, equity, and inclusion] DEI that violate any applicable Federal anti-discrimination laws.”

Employers impacted by this new Order have 90 days from January 21, 2025, to comply with the new regulatory scheme. Although the Order removes significant obligations from federal contractors, they may still be required to adhere to similar requirements under other federal laws. For example, contractors are still required to comply with obligations related to individuals with disabilities and protected veterans under Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act, and all employers, including federal contractors and subcontractors, must continue to adhere to additional reporting requirements, if applicable under law, such as filing EEO-1 and VETS-4212 reports.

If you have any questions about these issues or the impact of the new Administration, please contact any member of Squire Patton Boggs’ Labor and Employment practice group.

US Supreme Court Clarifies Employer’s Burden of Proof for Showing Exempt Status Under the FLSA (US)

In an increasingly-rare unanimous decision, on January 15 the United States Supreme Court held in E.M.D. Sales, Inc., et al. v. Carrera that employers must prove that an employee is exempt from the minimum wage and overtime pay provisions of the Fair Labor Standard Act by only a preponderance of the evidence, and not by “clear and convincing” evidence.

The FLSA generally requires employers to pay a minimum wage and overtime compensation (at a rate equal to one-and-a-half times the regular rate of pay) to employees, but it also exempts many categories of employees from these requirements. These categories include employees who are paid on a salary basis that exceeds the FLSA’s minimum salary requirements and who perform executive, professional, administrative, outside sales, and certain computer-related duties. When an employee alleges that their employer failed to pay them minimum wage or failed to pay them overtime compensation for hours worked in excess of 40 hours in a workweek in violation of the FLSA, if the employer’s defense is that the employee was exempt from those provisions of the FLSA, the law places the burden on the employer to show that an exemption applies. Prior to the Court’s ruling in E.M.D. Sales, there was a conflict in the federal appellate courts as to what level of proof the employer had to show to prove the exemption: “preponderance of the evidence” – meaning more likely than not – or the more stringent “clear and convincing evidence” standard.

In resolving the circuit split, the Court found the preponderance of the evidence standard applies because it is the “default standard of proof” in civil litigation and none of three bases for requiring a heightened standard of proof applied. The Court explained that the FLSA does not designate a different standard of proof; FLSA claims are not disputes as to which the United States Constitution requires a heightened standard (such as when constitutional claims involving the First Amendment or the Due Process Clause are at issue); and that FLSA cases are not an “uncommon” case in which the government seeks to impose unusual remedies more dramatic than money damages or other conventional relief, such as taking away a person’s citizenship.

In reaching its decision, the Court relied heavily on the fact that the preponderance of evidence standard also applies in Title VII employment discrimination cases. And the Court rejected what it referred to as the employees’ “policy-laden arguments” that employers should have to establish exempt status by clear and convincing evidence due to the public’s interest in guaranteeing fair wages, the fact that FLSA rights are not waivable, and the fact that much of the evidence is under the employer’s control.

Justice Gorsuch and Justice Thomas issued a concurring opinion to note that on occasion, the default standard is a “heightened standard of proof,” depending on the legal backdrop against which Congress passed the law. They concluded, however, that the Court’s decision in E.M.D. Sales was appropriate and consistent with that understanding.

It is important to note that the Court’s decision does not change the applicable exemptions under the FLSA. Instead, it only clarifies the evidentiary burden imposed on an employer to prove a FLSA exemption applies. Employers who classify employees as FLSA-exempt should take appropriate steps to ensure they would be able to demonstrate – by a preponderance of evidence – that they properly classified each employee who is not paid minimum wage or overtime compensation by ensuring that they have appropriate and sufficient records of their payment on a salary basis and of the nature of the duties the employee performs.

Bureaucracy Relief Act – making it (slightly) easier to do business in Germany

Agreement despite red tape

On 1 January, the Fourth Bureaucracy Relief Act (Viertes Bürokratieentlastungsgesetz – “BEG IV”) came into effect. This legislation introduces significant changes to requirements around the form of contracts in Germany with the objective of simplifying certain administrative processes, among them the completion of employment contracts.

What is the status quo?

Until the end of last year, the “written form” was a standard requirement for employment contracts. In order to comply with the written form requirement as set out in Sec. 126 of the German Civil Code (Bürgerliches Gesetzbuch), the document must be signed with a “wet-ink” signature by the issuer or, in the case of a contract, by both parties on the same document. Although an employment contract can theoretically be concluded orally, the main contractual elements are required to be in written form by the Act on the Notification of Terms and Conditions of Employment (Nachweisgesetz) which provides for fines of up to EUR 2,000.00 per breach, so that is one piece of theory not worth exploring further.

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So what’s going on in Belgium?

Well, a lot in fact! A number of new provisions are taking effect at the start of the new year and we have tried to summarise them for you in one little blog post. Our New Year’s gift to you!

1. Extended information obligations in the event of a transfer of an undertaking

As from 1 February 2025, changes to national Collective Labour Agreement nr. 32 bis (“CLA 32bis” – Belgium’s equivalent to TUPE) will enter into force, increasing the involvement of the new employer (transferee) in the information and consultation process.

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New Year UK Immigration Overhaul: What You Need to Know

On New Year’s Eve, many were focused on celebrating the arrival of whatever 2025 may bring, but behind the scenes the Home Office introduced some significant changes to immigration policy. These updates have been quietly implemented as part of the government’s ongoing ‘crackdown’ on alleged abuse of the UK immigration system, but some could have far-reaching implications. In the absence of a thorough understanding of the relevant rules and guidance, even well-intentioned businesses could find themselves at the receiving end of a licence application refusal (following which there is a 6-month cooling off period before a new application can be submitted) or, worse, revocation of the licence for existing sponsors.

In this post we summarise the key changes.

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He sees you when you’re sleeping, he knows when you’re … pregnant? EEOC Issues Guidance on Using Wearable Technologies in Compliance with Discrimination Laws (US)

eeoc

In today’s rapidly evolving technological landscape, smartwatches and other wearable technology devices have progressed past being a great holiday gift for your family member with the perennial New Year’s resolution to hit the gym and are increasingly prevalent in the workplace. These devices, ranging from smartwatches to powered gloves, can enhance employee productivity and improve workplace safety. Still, the use of wearable technologies raises important legal considerations under federal equal employment opportunity (EEO) laws. To address some of these considerations, the U.S. Equal Employment Opportunity Commission (EEOC) has gifted employers with a fact sheet explaining how federal equal employment opportunity laws may apply to employers’ use of wearable technologies.

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Who to WARN? Does the WARN Act Apply to Fully Remote Employees? (US)

Most employers that have gone through a large-scale layoff or closed a location will tell you that WARN is their most dreaded four-letter word. Now, with the continuing and even increasing prevalence of post-COVID remote work arrangements, the question of who to WARN of mass layoffs of closures has become even more daunting.

The federal Worker Adjustment and Retraining Notification (WARN) Act requires employers with at least 100 full-time employees to provide 60 days’ advance notice in the event of a closing or mass layoff affecting at least 50 full-time employees at a “single site of employment.” Normally, an employees’ employment site simply is the location where the employee works. But the answer is less obvious for employers with remote employee populations. Unlike, for example, New York’s state law mini-WARN Act, the federal WARN Act does not explicitly address remote employees. (As we wrote about here, amendments to the NY WARN Act regulations, which went into effect on June 21, 2023, provide that “individuals who work remotely but are based at the employment site” are counted as employees of that employment site.)

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Developments to UK immigration law in 2024

The Home Office has been very busy in 2024, making significant changes to the Immigration Rules almost every month this year.

We have published a timeline of the most notable changes that sponsoring employers should be aware of.

As the year draws to a close, we expect 2025 to present further immigration law developments and as always, our team will continue to monitor them.

If you need support or have any questions relating to any UK business immigration matters, please contact your usual Squire Patton Boggs business immigration team member or Annabel Mace, Partner and Head of UK Immigration.

“Let Us Help You Help Us Help You” – EEOC Guides Healthcare Providers Supporting Pregnant Patients Seeking Reasonable Accommodation (US)

The Pregnant Workers Fairness Act (PWFA), which became effective in June 2023, requires covered employers to provide job-related accommodations to employees for work limitations they experience due to pregnancy, childbirth or related medical conditions. (See our prior coverage here.) Since the PWFA’s enactment, the U.S. Equal Employment Opportunity Commission (EEOC) issued regulations explaining employer obligations under the law, including, in particular, the duty to participate in an interactive dialogue with covered employees in order to identify and implement reasonable accommodations for pregnancy- and childbirth-related limitations.

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Managing Sickness Absence Webinar – Follow-up Questions Answered, Part 3 (UK)

Doctor Stethoscope

Here are another couple of questions that were raised in our recent webinar on Managing Sickness Absence, plus our outline answers.

If an employee always uses their full sickness allowance but never goes over this, can we still have meetings and issue warnings, even if there is no evidence of an underlying medical condition?

Yes, absolutely. In fact, this is exactly the situation where you should be actively addressing and managing their attendance.

Ideally, your sickness procedure should include “triggers” that prompt a review (and usually a warning) after a certain number of absences. This should be the case even if (and in fact, especially if) the employee does not have any underlying medical condition, e.g. the reasons for the absences are different and totally unrelated. Remember, the purpose of the warnings is not to “discipline” the employee, but to ensure they are aware of the standards of attendance that are expected and to support them in meeting them.

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