Trump Signs Executive Order on Diversity: What’s Next?

By Angela Adams, CEBS, SPHR, Director, EEO & Compliance Solutions
Published January 28, 2025

A week ago today, President Trump signed an executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” While its largest impact is going to be on federal contractors and subcontractors (“contractors”), there are ways it will affect all employers.

All Employers
Given the questions HR Source has received on the HR Hotline, we thought we’d start with what the order doesn’t do – meaning, equal opportunity protections have not changed. All federal equal employment opportunity laws are still being enforced, including Title VII of the Civil Rights Act, the Equal Pay Act, the Americans with Disabilities Act, and more. Employers should keep their equal opportunity policies in place and carry on as always with a commitment to non-discrimination. Some employers have asked about the transgender and sexual orientation protections in their policies, given other orders President Trump issued. Remember that in Illinois and other states, protection for these two categories is also part of state law, so those should remain in place. If these protections are not in your state’s law, keep them in for now, but stay alert for updates in this area.

All employers, however, should be cautious about their diversity programs. Section 4 of the order is titled “Encouraging the Private Sector to End Illegal DEI Discrimination and Preferences.” (While the order is silent on state-level public sector employers, it’s important for them to pay attention to this as well.) The order uses the language “Illegal DEI Discrimination” throughout, while not defining the term. Hopefully, guidance will be forthcoming. But in connection with implementing this order, President Trump has ordered government agencies to provide the Assistant to the President for Domestic Policy with names of at least nine organizations they believe are “the most egregious and discriminatory DEI practitioners,” presumably so the federal government can investigate. There are no criteria in how agencies should choose these organizations.

Most employers are not operating an “illegal DEI program.” Reaching out to various demographic groups and encouraging their participation in the hiring process, but ultimately hiring the best-qualified candidate, is not illegal. But, please stay tuned for more guidance from us and contact us if you have questions about a specific program.

Federal Contractors and Subcontractors (“Contractors”)
In Section 3, “Terminating Illegal Discrimination in the Federal Government,” the new order rescinds Executive Order 11246, which had been in place since 1966. It required contractors to take “affirmative action” to recruit women and minorities and to follow the principles of non-discrimination in Title VII of the Civil Rights Act. As a result of the withdrawal, the women and minority analyses in affirmative action programs that sometimes resulted in “placement goals” is no longer required (but as noted above, Title VII is still in place). This is a seismic shift for contractors, who have been doing this analysis for close to 60 years. 

The order also requires the Office of Federal Contract Compliance Programs (OFCCP), the division of the U.S. Department of Labor that audits contractors, to stop “promoting diversity” or “allowing or encouraging” contractors to engage in “workforce balancing.” It seems to hint that not only will the OFCCP no longer enforce the women and minority analyses, but going forward, those analyses might not even be allowed. We are attempting to clarify this.

Contractors can continue to follow the current policies and analysis of Executive Order 11246 for 90 days after the order was signed, which will be April 21, 2025. While we are in the process of looking at all the steps contractors will need to take to wind down the vast framework that grew around Executive Order 11246, here is what has not changed for contractors. Contractors still need to: 

• Develop annual affirmative action programs for protected veterans and individuals with disabilities that include all the prior components. 
• List job openings with the state unemployment office and have a plan to recruit protected veterans and individuals with a disability.
• Keep asking at the applicant and new hire stage about veteran and disability status. We’re still clarifying whether you should ask about race and sex, but remember until April 21, you can continue as you are now, so we recommend keeping the practice in place for now as there are other reasons to ask for race and sex, such as for the EEO-1 Report and to comply with the Uniform Guidelines on Employee Selection Procedures.
• Ask employees at least every five years about their disability status.

Going forward, contractors will need to agree to “compliance in all respects with all applicable Federal anti-discrimination laws” and agree to a statement that the contractor does not have an Illegal DEI Program. These will be factors in whether the government pays a contractor for work.

We will have much more on this topic in the weeks to come. HR Source will continue to be a resource for you on all employment issues pertaining to being a government contractor and will continue to assist you in this area.

HR Source members with questions can contact us through the HR Hotline Online or at 800-448-4584.