In the weeks following the presidential inauguration, the new administration has released a large volume of Executive Orders and policies that apply to and affect a vast range of industries, businesses, and individuals. Naturally, the volume and pace of these new and changing policies has created a lot of uncertainty about the future of American laws, particularly those that affect businesses and entrepreneurs. We are following these changes closely, and we want to make sure our clients remain informed and prepared to adapt to new rules and policies. Below is an overview of some of the most significant and potentially impactful executive orders and policies that may be relevant to our clients.
The new administration has made several changes to U.S. policy that will have global impacts. Some of these changes include the decision to withdraw the U.S. from the World Health Organization (WHO) and a shift away from supporting global climate initiatives.
The administration has also issued orders and policies that affect health care in the U.S. Some of the most notable orders and policies include:
Several of these polices have already been challenged in court, and individual states have expressed their intentions to resist or reject these changes. Notably, the Attorney General of New York instructed hospitals that they are not required to limit gender-affirming care.
We will continue to monitor these changes for their potential impacts on some of our nonprofit clients, as well as their impacts on employers who provide employer-sponsored health plans.
DEI Initiatives
The new administration has issued and rescinded many Executive Orders in the areas of labor and employment, particularly with respect to DEI programs and initiatives. Generally, the Trump administration has worked to reverse Biden-era policies supporting and encouraging DEI implementation in federal workplaces by rescinding Biden Executive Orders and issuing new orders aimed at eliminating DEI programs. The new administration’s Executive Orders technically only target “illegal” DEI initiatives, but the administration has provided little definition or any clear guidance about what it considers to be an “illegal” DEI initiative. Some examples of so-called “illegal” practices may include implementation of hiring quotas, or any practice or policy that may be perceived as giving favorable or preferential treatment to members of discrete groups.
So far, the Executive Orders have been mainly focused on restricting DEI for government employers, but it is likely that private employers will be required to affirmatively demonstrate that they have not implemented “illegal” DEI programs. Further, the Ohio Attorney General has indicated that he intends to take action against private companies that choose to retain and continue to implement DEI values and initiatives. While a related Executive Order requires government agencies to identify only “egregious offenders” to target for enforcement of new policies, it is again unclear what that term means.
Given the uncertainty and unpredictability surrounding the new administration’s policies against DEI initiatives, organizations and companies may benefit from reconsidering their approach to these programs. In some cases, it may be prudent to modify the stated goals and practices of existing DEI programs to apply more generally to the workplace in order to avoid drawing scrutiny. For example, companies may consider swapping conventional DEI terminology for general terms like “belonging,” “professional development,” or “company culture.” Companies may also consider removing mentions and endorsements of DEI policies from their public-facing web pages and promotional materials. Of course, we recognize that in many situations, such changes are not feasible. Unfortunately, it remains to be seen how much litigation we may see alleging so-called “reverse discrimination.”
Immigration
The new administration has issued several orders concerning immigration and the status of individuals in the U.S., including a ramp-up in U.S. Immigration and Customs Enforcement (ICE) activity. ICE raids of businesses’ facilities and job sites are increasing across the country, and it is more important than ever to be prepared for such an event. Business owners should be prepared and have a plan in place for responding to ICE encounters and inquiries and should make employee I-9 audits a priority in order to minimize risks to their business and staff.
Employer-Sponsored Health Coverage
The new administration has indicated it may impose a cap on tax exclusion for employer-sponsored health coverage. Currently, an employer’s spending on health insurance premiums is exempt from taxation for both the employer and their employees. The new administration has proposed putting a limit on the amount that may be exempted, with the stated goal of generating more federal and state tax revenue. Stated differently, this proposal would make at least some of the value of employer-provided health plan benefits taxable.
The Trump administration is particularly focused on rolling back the rulemaking authority of government agencies in virtually all sectors. In addition to imposing a temporary freeze on new rulemaking, the administration plans to require agencies to identify at least ten existing rules to rescind for each new rule issued. These orders and policies, combined with recent Supreme Court decisions concerning judicial review of administrative rules, will make it much more difficult for agencies to issue and enforce new rules. This, in turn, may have the effect of making regulatory compliance simpler for businesses and organizations because there will be fewer new rules to keep track of.
Many of the new administration’s Executive Orders and policies have already been challenged in court, and new lawsuits are being filed every day by impacted individuals, communities, and organizations. Due to the rapid pace of the administration’s Executive Orders and the equally speedy legal challenges brought in response, there is great uncertainty as to whether and to what extent these new rules and policies will be implemented and enforced. As always, we will continue to monitor the changing legal landscape for its potential impact on businesses and nonprofits. In the meantime, if you have any questions about how changing laws and regulations may impact your business or nonprofit, schedule a consultation.
