Opinion: A look at new state and federal laws, regulations

Lynne Haggerman

Several corporate policies and procedures must be modified in light of new state and federal laws and regulations, as well as modifications to prior programs and legal theories.

Proposition A
The Missouri Supreme Court upheld the paid sick leave law, which subsequently went into full effect on May 1. However, the Missouri Legislature repealed the entire sick leave portion effective Aug. 28, and removed the requirement tying minimum wage to the consumer price index. The bill now heads to the governor’s desk, with expectations it will be signed into law.

DEI programs
President Donald Trump signed executive order 14151, directing federal government agencies to cease all illegal diversity, equity and inclusion policies, programs, preferences and activities in the federal government and its contractors and grantees. President Trump also issued EO 14173, which requires federal agencies to encourage the private sector to end illegal discrimination and preferences, including in DEI initiatives. In response, the Department of Justice and the Equal Employment Opportunity Commission issued guidance about DEI efforts that may be unlawful and discriminatory. An employer may not take employment action, such as hiring and promotions, due to the employee’s race, color, sex, national origin or other protected class characteristic. In addition, a company may not retaliate against an individual for objecting to or opposing DEI training or employment discrimination.

Trump also signed EO 14168, establishing that the federal government will only recognize two sexes: male and female. Accordingly, the EEOC removed the phrase binary in the employer EEO-1 form for 2025.

Disparate impact theory of discrimination
In 1971, the U.S. Supreme Court invented a theory called the disparate impact theory of discrimination. The theory stated that an enterprise may have a perfectly legal policy with no intentional discrimination, but if the policy disparately impacts a protected group, then the government will assume the organization is violating discrimination law. President Trump signed an EO entitled Restoring Equality of Opportunity and Meritocracy, directing federal agencies to deprioritize enforcement of disparate impact policies. The EO also orders federal agencies to review current pending investigations, civil suits and injunctions in light of this EO.

Independent contractors
The Department of Labor will no longer apply the Biden administration’s 2024 rule and will reinstate the regulations issued by President Trump during his first term. Accordingly, the following will now be utilized to decide whether a person is an independent contractor or employee: To what extent are the services rendered considered to be an integral part of the business? What is the permanency of the relationship? What is the amount of the worker’s investment in the facilities and equipment? What is the nature and degree of control by the business? What are the laborer’s opportunities for profit and loss? How much initiative, judgment or foresight is required for the individual’s services?

Unpaid internships
Internships are popular during the summer months. To determine if an internship needs to be paid or not, the DOL wants a company to ask if the intern is a benefit or a burden. The issue is who is the primary beneficiary of the relationship. To be unpaid, the following must be true: First, the training must be similar to training given in an educational environment. Second, the internship must be tied to the formal education program of the intern. Third, the academic commitments of the intern must be accommodated. Fourth, the duration must be limited. Fifth, a paid employee may not be displaced. Sixth, there must be an understanding that the internship does not guarantee a job after the internship ceases.

In light of the new and modified laws and regulations, employers should take the following actions:

1. Ensure compliance with Missouri Proposition A.
2. Audit DEI policies and programs to determine if they are illegal, and cease those illegal activities.
3. If a corporation determines there have been illegal employment actions taken, seek the advice of legal counsel in order to prepare for potential lawsuits.
4. Analyze independent contractor and unpaid internship policies and adjust accordingly.

Lynne Haggerman holds a master of science in industrial organizational psychology and is president/owner of Lynne Haggerman & Associates LLC, specializing in management training, retained search, outplacement and human resource consulting. She can be reached at lynne@lynnehaggerman.com.