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SuraLinkRebecca Tipton, SHRM-SCP, BMSS HR Advisory Services
Putting the “Resource” in Human Resource Consulting
Regardless of your particular political preference, I don’t think anyone could argue that these first few months of Donald Trump’s presidential administration have been busy. As of the day that I am drafting this particular article, 73 executive orders have been published (EO 14147 through EO 14219), and all current orders can be reviewed at https://www.federalregister.gov/presidential-documents/executive-orders/donald-trump/2025. Of course, not all will directly affect employer responsibilities in their personnel processes and policies, but one particular order, Executive Order 14173 “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” has created a bit of a stir as it dictates an end to Executive Orders 12898, 13583, 13672, and (most notably) 11246 as well as calling for a termination of all illegal diversity, equity, and inclusion (DEI) activities and programs. Of course, to better understand how Executive Order 14173 affects your business, we need to start with understanding what constitutes illegal diversity, equity, and inclusion as well as understanding how the removal of these executive orders actually affect private sector organizations.
Illegal Components of Diversity, Equity, and Inclusion Programs
DEI programs are aimed at creating work environments that are free from bias and unequal opportunities, and they have existed in some form or another for a very long time, just perhaps under another name, such as Equal Employment Opportunity, Fair Hiring Practices, or Affirmative Action. If honoring their purpose, there is nothing inherently illegal about policies that support equal opportunity. However, where they have the potential to cross the line into legal violations is when such policies start to ignore a person’s actual merit instead of ensuring that people with equal standing (qualifications) are given the same opportunity without bias to the individual’s protected characteristic; such as age, religion, sex, race, ethnicity, veteran status and any other characteristic protected by local, state, or federal law. While the intent of the program may not be to ignore merit, when such plans identify specific quotas, they may unintentionally cross this line by ignoring the core idea of equal opportunity, which is that individuals who are equally qualified should be considered equally. However, what we should take away from this is that it is absolutely still legal to promote diversity, equity, and inclusion in the workplace. However, we do need to do so responsibly and without quotas, such as by ensuring inclusive job descriptions that only include relevant requirements for qualification, including proactive outreach and positive recruitment, and providing a bias-free working environment.
A High-Level Overview of the Rescinded Executive Orders
First, it should be noted that two of the rescinded executive orders affected by Executive Order 14173 were only applicable to the public sector (government employees and agencies). Specifically, Executive Order 12898 was established in 1994 to focus on governmental agencies’ responsibilities in addressing environmental justice in minority and low-income populations. And, Executive Order 13583 was established in 2011 to initiate a government-wide effort to promote diversity and inclusion specifically within the federal workforce. The remaining two orders were instead focused on government contractors and subcontractors in the private sector as Executive Order 11246 was originally established in 1965 to prohibit employment discrimination by government contractors on the basis of race, ethnicity, color, national origin, or religion (and was amended in 1967 to include the prohibition of sex-based discrimination) while Executive Order 13672 was established in 2014 to further amend Executive Order 11246 to explicitly prohibit discrimination based on an employee’s gender identity or sexual orientation. Therefore, in the private sector, it is the removal of Executive Orders 11246 and 13672 that have the most potential for affecting your organization, but the question is to what extent?
What Applicability Does Executive Order 14173 Have for Government Contractors in the Private Sector?
To start, Executive Orders 11246 and 13672 only applied to federal contractors and subcontractors, meaning that if your business does not hold a contract (or subcontract) with the federal government, then these requirements never actually applied to your company. However, if you do hold one or more contracts with the government, then this does directly affect the requirements that you were previously held to for establishing an Affirmative Action Plan (AAP) covering race and gender. For more typical contracts, government contractors were required to establish an AAP provided they met the contract value threshold and the employee threshold. With the establishment of Executive Order 14173, government contractors are no longer required to establish an AAP that covers the provisions of Executive Order 11246. However, they are still required to establish an AAP to cover provisions held under the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA), which covers discrimination protections for veterans, as well as an AAP to cover provisions held under Section 503 of the Rehabilitation Act, which covers protections for individuals with disabilities.
Secondly, the removal of Executive Order 11246 additionally eliminates other requirements, such as:
- Government Contractors, who were previously required to submit EEO-1 reports once they hit 50 employees, can now wait until they reach 100 employees, making the threshold equal to the other private sector businesses.
- Government Contractors are also no longer required to request the completion of race and gender self-identification forms. However, the employer can still do so voluntarily, which may be advisable to prepare for any upsets that Executive Order 14173 may face in the future as it is already facing legal challenges.
What Effect Does Executive Order 14173 Have on Legally Protected Classes?
Since the rescinded executive orders were established to prohibit discrimination based on race, ethnicity, national origin, religion, sex, gender identity, and sexual orientation; one might assume that those practices are no longer prohibited. However, this is an incorrect assumption as the affected orders were not the only legal protections in place for the affected classes. These same characteristics were already protected by Title VII of the Civil Rights Act of 1964 before the protections identified in Executive Order 11246 were even finalized. Additionally, the protections against discrimination based on gender identity and sexual orientation were previously established by the U.S. Supreme Court’s decisions on such cases as Bostock v. Clayton County that were based on interpretations of how Title VII protected these characteristics. Therefore, these discrimination prohibitions still exist, and employers do still need to honor them through their established harassment and equal employment opportunity policies and programs.
In summary, yes, there have been a lot of recent changes. However, be careful what you read as I have encountered some incorrect assumptions about what effect these changes really have on employers, and it could lead you to missing some key requirements that you may regret later. If you need any help in navigating these changes, or any of your other personnel challenges, BMSS HR Advisory Services is always happy to support you. You can reach us by visiting our website for contact information or by calling (833) CPA-BMSS.