According to a survey released by Littler Mendelson on March 5, the Trump administration's policy shifts in 2025 on diversity, equity, and inclusion (DEI) and immigration have had a significantly greater impact on employers than other areas, including artificial intelligence. The survey, which polled more than 300 employer representatives from late January to early February, found that the proportion of employers citing DEI or immigration policy and regulatory impacts was more than double that of any other measured category.

Littler's findings reflect a series of intensive actions by federal agencies, particularly the U.S. Equal Employment Opportunity Commission (EEOC), targeting DEI programs since President Trump's second inauguration. Among the EEOC's first major actions after restoring its quorum and solidifying a Republican majority, the agency rescinded Biden-era workplace harassment guidance. The document's stance on Title VII of the Civil Rights Act of 1964 conflicted with Chair Andrea Lucas's views on protections for transgender employees and employees seeking abortions.

Littler shareholder Jim Paretti said during a March 4 media event that while rescinding the guidance did not surprise employers, it did reduce clarity on how the EEOC views Title VII. "I think that's unfortunate because much of what was in that guidance was not particularly controversial or novel," Paretti said. "It provided a good baseline for employers to understand how the agency viewed certain issues."

He continued that employers should expect Lucas to address her stated priorities quickly and transparently. For example, the chair has expressed interest in combating religious discrimination, an area Paretti believes has become "more fertile" ground for litigation as employees seek religious accommodations or raise other religious issues.

On immigration, 65% of surveyed employers reported being affected by the Trump administration. Littler shareholder Jorge Lopez noted this reflects a broader talent shortage driven by the White House's enforcement efforts. The list of policy changes includes updated asylum application requirements, termination of Temporary Protected Status for nationals of several countries, and a U.S. Department of Labor proposal to raise prevailing wage standards for certain foreign worker programs.

Lopez added that these policy shifts occur against the backdrop of the Labor Department's "Project Firewall," which has intensified scrutiny of H-1B visa and permanent labor certification applications. He said employers, especially in industries such as construction, hospitality, agriculture, and landscaping, struggle to replace the skills of immigrant workers whose legal status has been revoked or whose legal immigration attempts have been affected by policy decisions. "There's no ready pool of people for employers to take on these jobs," Lopez said. "In hospitality, I've dealt with many restaurant groups that have essentially shut down because they couldn't continue operating."

Littler found that the combined impact of regulatory and economic uncertainty prompted more than a third of surveyed employers to lay off workers over the past year, while another 30% paused or reduced hiring. This uncertainty also plays out at the state and local levels, with nine out of ten Littler respondents saying state and local legislative changes and workplace regulations over the past 12 months have affected them.

Paretti pointed to one example of conflict between federal and state policies involving protections for transgender employees. State laws may include explicit employee protections based on gender identity, while the Trump administration completely dismisses the concept of gender identity. Employers caught between these views find themselves in a "tricky" position, Paretti said. He cited the U.S. Supreme Court's ruling in Bostock v. Clayton County, Ga. as a guiding point, as the Court ruled there that gender identity is a protected class under Title VII. Paretti said employers must keep this in mind when developing practical approaches to handling downstream issues such as bathroom access. "Everything is on the table, and you have to approach it with an open mind, considering what is workable and what is predictable," he added.