The Impact of Recent Federal Policies on the American Workplace

What business owners need to know about legal trends shaping HR, compliance and workforce risk, featuring Steven Hirschfeld, Co-Managing Partner at Hirschfeld Kraemer LLP.

The second Trump administration is already reshaping the American workplace, from shifting federal enforcement priorities to evolving interpretations of discrimination, accommodation, and wage laws. For business owners, this means now is a crucial time to revisit how your policies are built, ensure hiring, firing, and financial decisions are documented, and limit your risk exposure across HR and operations.

In a recent webinar hosted by BBSI, leading labor and employment attorney Steven Hirschfeld of Hirschfeld Kraemer LLP broke down the key legal and compliance trends that employers should be watching right now.

Below, we’ve summarized the critical takeaways to help you stay informed, compliant, and proactive in this ever-changing legal landscape.

A Shifting Focus at the EEOC

The Equal Employment Opportunity Commission (EEOC) is taking a more proactive approach to enforcement in certain areas, which means more employers are facing investigations.

Rising in frequency are claims that employers may have unintentionally favored certain groups, like women or people of color, in ways that could disadvantage others in historically lesser-marginalized groups, like male and/or white employees. Complaints from employees who object to diversity, equity, and inclusion (DEI) initiatives or religious workplace celebrations are also increasing.

“We’re seeing more cases where employees say their religious beliefs are being challenged by workplace culture,” Hirschfeld says.

Whether these claims hold up or not, the risk of an EEOC investigation is very real. Business owners should be ready for heightened sensitivity and potential disputes, especially when self-expression seems to clash with company values or DEI efforts.

The bottom line for business owners

Now is the time to take a fresh look at your religious accommodation policies, DEI initiatives, and company-sponsored affinity groups to ensure no employee or group of employees are granted an advantage (even just a perceived one) over others. Make sure you’re prepared to handle accommodation requests and employee grievances thoughtfully, legally, and with open communication to protect both your business and your team.

Expanding Responsibilities Around Disability Accommodation

Disability law continues to broaden, and most cases today have little to do with ramps or wheelchairs. Employees requesting disability accommodation are usually seeking it for more complex, and sometimes unseen, reasons.

“It’s overwhelmingly mental or emotional conditions — anxiety, depression, PTSD, neurodiversity, cancer, heart conditions — and they often arise after someone’s already been on your payroll for years,” Hirschfeld said.

For employers who have shifted back to in-person work post-pandemic, accommodation for these conditions may include requests for remote work. Before COVID-19, if an employee requested remote work accommodation, disability courts typically deferred to the employer, placing the responsibility on the employee to convince the court.

But today, business owners are being increasingly pressed by courts to prove why remote work as a reasonable accommodation is an “undue hardship” to their business. According to the ADA, “undue hardship” is defined as an action requiring significant difficulty or expense in relation to the size, resources, nature, and structure of the business.

Even if employers can meet that burden of proof, business owners still must identify an alternative accommodation that satisfies the needs of the employee and the business, while also meeting all legal requirements in the process.

The bottom line for business owners

If you receive a request for disability accommodation, it is essential to actively engage in an interactive process. This means open communication with the requesting employee and, when appropriate, their healthcare provider, to find accommodations that are reasonable and effective. Flexibility and creativity can make all the difference.

For example, as Hirschfeld recollected, one retail employer retained a top-performing employee who was bedridden by allowing them to work remotely, a solution that may have seemed impossible for the industry but proved successful in practice.

Remember, retaining an employee costs less than recruiting a new one.

Mental Health & Neurodiversity in the Workplace

Mental health is now a major factor in workplace performance and accommodation requests, with more employees seeking (and often expecting) support from their employer to accommodate disorders or neurodiversity.

“We’re seeing signs like sudden performance decline, organizational issues, irritability, forgetfulness, or even panic attacks — often tied to medication or mental health treatment,” said Hirschfeld.

Conditions that may trigger accommodation needs include anxiety disorders, depression, OCD, PTSD, bipolar disorder, autism, and substance abuse recovery, among others.

The bottom line for business owners

Rather than jumping to conclusions about an employee’s condition, thoroughly document their performance or behavior issues and wait for the employee to disclose any conditions themselves. Placing employees on performance improvement plans (PIP) often present opportunities for employers and employees to “meet in the middle” before a disability accommodation request ever occurs.

If accommodation is necessary, some more common options include:

• Temporary leave of absence
• Flexible schedules
• A quieter workspace
• Remote work
• Software or tools to support focus or memory

Preparing for Layoffs or Restructuring? Proceed with Caution

Tariffs, supply chain issues, and economic uncertainty are pushing more employers to plan for layoffs, even if they haven’t acted on them yet. If you are preparing for a necessary decrease in your workforce, Hirschfeld offers the following guidance.

Job eliminations present the lowest risk. An example of job elimination might include outsourcing IT services or eliminating a department that once supported a service you no longer offer. When done for a clear business reason, these types of workforce decreases are rarely challenged.

Layoffs or reductions in force (RIFs) are riskier. If you’re keeping 40 employees and letting 10 go, you need a clear, documentable selection process explaining why those 10 were chosen.

Severance isn’t usually required. Aside from a handful of US states (New Jersey, for example), issuing a severance upon layoff is not legally required. If you do offer one, give them adequate time to review the agreement before accepting based on the laws in your state, although Hirschfeld recommends a minimum of 45 days for all employees. He also recommends obtaining a signed release of claims – an agreement waiving the employees' right to sue you for any claims related to their employment.

The bottom line for business owners

Always consider job eliminations before layoffs or a RIF. However, if a layoff or RIF is best for your business, be sure to use objective criteria in your selection process to keep you unbiased. These criteria might include performance, tenure, skills and certifications, behavior, and employee track record (if documented). For example, laying off the 10 most recently hired employees and retaining the 40 most tenured team members.

Keep in mind that even if your decisions are legally sound, if all 10 people laid off happen to be women or over age 40, you’ll want to verify — and document — that the selection wasn’t discriminatory.

Wage & Hour: Misclassifications & Overtime

Wage and hour requirements continue to confuse employers in today’s landscape, especially those with remote teams or hourly staff. Common employer mistakes include:

• Misclassifying exempt employees (even high earners) without ensuring their job duties meet legal criteria
• Failing to pay for off-the-clock work, such as employees checking email on weekends
• Not compensating for miscellaneous job-related time spent on things like bag checks, donning/doffing uniforms, or technology setups at the start of a workday.

The bottom line for business owners

Hirschfeld recommends employers review job descriptions with a seasoned HR Consultant who can help them establish clear policies for when nonexempt employees are allowed to work, how hours are to be logged, and what counts as compensable time.

Consider including language in your email footer like, “If you’re reading this after hours, there is no need to respond until your regular working time unless noted otherwise.”

Local Regulations & Rising City-Level Oversight

With federal legislation lagging, states and cities are taking the lead, and it’s creating a compliance maze for businesses. From Tucson’s rule requiring employers to compensate workers monitoring devices after hours, to New York City’s AI recruiting laws, the local patchwork is growing fast.

The bottom line for business owners

Appoint a designated leave law expert or partner with an HR Consultant. They will help you stay abreast of laws and regulations specific to where you do business, and help identify which rules to follow when local, county, state, and federal guidance contradict one another. This becomes particularly important if you employ a multi-state workforce.

Stay current on your jurisdictions’ labor regulations. As previously mentioned, local laws can differ significantly not just from federal standards, but even from neighboring counties or cities. Whether it’s leave laws, scheduling requirements, or wage rules, understanding your obligations at every level is critical to reducing risk and avoiding costly penalties.

Review your leave tracking and certification process annually. Confirm that documentation requirements are being met, forms are updated, and managers know how to recognize and respond to leave requests appropriately. As laws change and your workforce evolves (especially across multiple states) having a clean, consistent process in place helps protect both your people and your business.

Immigration Enforcement & Workforce Fear

Immigration remains a hot-button issue, with ICE activity seemingly focused on industries like agriculture and retail. For business owners in these or other targeted industries, it can be confusing to know what your rights are as an employer, how to (and whether you are required to) respond to inquiries, and how to prepare employees at risk of investigation.

The bottom line for business owners

Hirschfeld recommends business owners take the time to:

• Research your rights related to administrative subpoenas, such as if immediate compliance or assisting in the locating of an employee are legally required.
• Train your managers on when they should and should not allow access to worksites and business locations, and ensure they feel equipped to respond appropriately in the event of an ICE visit.
• Ensure I-9 compliance, double-checking there is a form on file for all employees.
• Provide support for fearful employees with valid work status; partnering with an HR Consultant to develop resources and reminding employees of available ancillary benefits (such as an Employee Assistance Program (EAP)) are both great places to start.

A Word on AI in Hiring

Using AI tools for recruitment? Proceed carefully. Plaintiff’s lawyers are watching how algorithms may disproportionately exclude certain groups.

Ask your AI vendor to demonstrate non-bias validation and keep documentation. If something goes wrong, the software company won’t be sued... you will.

Final Thought: Compliance Isn’t Optional, It’s Strategic

Hirschfeld summed it up best...

“It’s not that everything here is new. It’s that enforcement is shifting, employee expectations are evolving, and the legal risks for getting it wrong are growing.”

For business owners, that means:

• Reviewing your practices regularly
• Training your managers well
• Consulting legal or HR experts before major decisions
• And never underestimating the power of documentation

Need Help Navigating These Changes?

The legal landscape is shifting fast, and BBSI is here to help you stay ahead of it.

Our HR and risk professionals partner with business owners to navigate complex employment laws, help them improve compliance, and build workplace strategies that reduce liability and support long-term growth.

Whether you’re managing multi-state operations, facing a layoff, or reassessing your policies, BBSI offers tailored guidance and hands-on support to protect your business and your people.

Connect with your local BBSI team today to learn more.

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