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

Littler's survey findings reflect a series of intensive actions targeting DEI programs by federal agencies, especially the U.S. Equal Employment Opportunity Commission (EEOC), since Donald Trump's second inauguration. Shortly after the EEOC regained a quorum and solidified a Republican majority, one of its first major moves was to rescind Biden-era guidance on workplace harassment. That document had articulated positions under Title VII of the Civil Rights Act of 1964 regarding protections for transgender employees and employees seeking abortions, positions with which current Chair Andrea Lucas disagrees.

Jim Paretti, a Littler shareholder, said during a March 4 media event that while employers were not surprised by the withdrawal of the guidance, the move has indeed left a lack of clarity regarding the EEOC's interpretation of Title VII. "I think it's unfortunate because much of what was in that guidance was not controversial or novel," Paretti said. "It provided employers with a good baseline for understanding how the agency viewed certain matters."

He went on to note that employers should expect Chair Lucas to act quickly and transparently on her stated priorities. For example, the Chair has expressed interest in combating religious discrimination, an area Paretti believes has become "more ripe for litigation" for employees seeking religious accommodations or raising other religious issues.

On immigration, 65% of surveyed employers reported being affected by Trump administration policies. Jorge Lopez, another Littler shareholder, noted that this reflects a broader talent shortage triggered by White House enforcement actions. 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 are occurring against the backdrop of the Labor Department's "Project Firewall" intensifying scrutiny of H-1B visa and permanent labor certification applications. He said employers, particularly in industries such as construction, hospitality, agriculture, and landscaping, are struggling to replace the skills of immigrant workers whose legal status has been revoked or whose legal immigration applications have been affected by the policies. "Employers don't have a ready pool of people to take on these jobs," Lopez said. "In the hospitality industry, I've dealt with many restaurant groups that have essentially stopped operating because they can no longer sustain themselves."

Littler found that the combined effect of regulatory and economic uncertainty led more than a third of respondents to reduce their workforce over the past year, while another 30% paused or reduced hiring. This uncertainty is also reflected at the state and local levels, with 90% of respondents saying they were impacted by state and local legislative changes and workplace regulations over the past 12 months.

Paretti cited an example of conflict between federal and state policies regarding protections for transgender employees. State laws may explicitly include employee protections based on gender identity, while the Trump administration entirely rejects the concept of gender identity. Paretti said employers caught between these viewpoints find themselves in a "tricky" position. He cited the U.S. Supreme Court's ruling in Bostock v. Clayton County, Georgia, as guidance, which held that gender identity falls under protected categories under Title VII. Paretti noted that employers must keep this in mind when developing practical approaches to handling downstream issues, such as restroom use. "Everything is on the table, and you have to approach it with an open mind, dealing with things within the realm of what's feasible and predictable," he added.