Inside the rapidly changing world of compliance

Employers today face a rapidly evolving compliance landscape that presents unprecedented challenges.

Notably, the federal government has withdrawn guidance previously relied upon by employers to navigate their employment law obligations. Meanwhile, states have started to fill these gaps by enacting laws that provide greater protections to workers. 

The states are tackling emerging issues facing employers, such as: data privacy; systemic discrimination risk from the use of AI tool use; paid or unpaid sick leave; parental leaves and other leaves; or protecting vulnerable workers. 

Some multi-state employers may choose to address this dichotomy by enacting workplace policies that meet the most generous statutory endowment, which can substantially increase costs of compliance. Other employers may choose to have an individualized approach to workplace norms and benefits that vary from state to state. However, the latter approach may result in certain employees of the company feeling disadvantaged from peers located in other states, leading to morale issues as well as compliance burdens.

While many states have long provided more expansive employment protections, the difference today is that some of the federal withdrawals may result in conflict with more expansive state laws, causing additional compliance headaches.  Multi-state employers now confront a complex patchwork of requirements that demand careful attention and strategic planning. Some of the decisions for navigating this terrain may also inadvertently make the employer a target for federal investigation or enforcement.

Federal guidance withdrawals: A retreating framework

Recent federal actions illustrate a significant shift away from expansive agency guidance. The U.S. Equal Employment Opportunity Commission and U.S. Department of Labor have withdrawn or updated multiple documents that employers relied upon for compliance direction.

Harassment guidance

The EEOC recently rescinded its 2024 Enforcement Guidance on Harassment in the Workplace without any public input. The commission previously approved this guidance only after receiving tens of thousands of public comments. Employers that structured policies around this comprehensive guidance must now reconsider their approach to preventing and addressing workplace harassment.

AI and employment decision-making

The EEOC also removed guidance published in May 2023 that addressed how federal anti-discrimination law applies to employers’ use of artificial intelligence in hiring, firing and promotion decisions. Employers implementing AI-driven hiring tools now lack clear federal guidance on compliance with Title VII and other employment discrimination statutes. Meanwhile, class-action lawsuits, such as Mobley v. Workday, Inc., seek to make employers liable for alleged bias in third-party vendor AI software. 

States such as California, Illinois and Colorado that enacted AI regulations may find themselves at odds with an executive order, “Ensuring a National Policy Framework for Artificial Intelligence,” directing the Commerce Department to identify “onerous” laws conflicting with the executive branch’s minimal intervention policy.

 LGBTQ protections

Multiple pages of resources related to protections following the Supreme Court’s decision in Bostock v. Clayton County were quietly removed from the EEOC website. This action creates uncertainty for employers navigating discrimination claims based on sexual orientation and gender identity, which are still protected under Title VII and several states’ laws.

AI hiring framework

DOL noted that its “AI & Inclusive Hiring Framework” published in September 2024 may be outdated or not reflective of current policies. The framework provided employers with guidance on combating algorithmic bias. Likewise, the DOL’s October 2024 “Artificial Intelligence Best Practices” guidance is similarly flagged as potentially outdated, and the document is no longer accessible in certain locations.

Pregnant Workers Fairness Act

The EEOC issued a final rule to implement the Pregnant Workers Fairness Act on April 15, 2024, with the regulation effective on June 18, 2024. While the regulations have not been officially rescinded or withdrawn, they are currently under challenge. Such actions create uncertainty and ambiguity for employers who seek to comply with the law. It also adds confusion to litigants and courts that may be grappling with lawsuits alleging violations of the act. 

In May 2025, a federal judge in Louisiana vacated portions of the regulations holding that the EEOC exceeded its authority. Similarly, a court in North Dakota enjoined enforcement of the PWFA’s regulations regarding abortion, infertility and IVF accommodations with respect to certain employers.

EEOC Chair Andrea Lucas also has made clear she intends to scrap the rules.

State law expansions: Filling the void

As federal guidance contracts, states act to ensure employees receive protections that federal authorities no longer prioritize. This activity creates significant compliance burdens for employers operating in multiple jurisdictions. It may also cause challenges to federal contractors who must comply with federal rules that may conflict with state laws that they are also obligated to follow.

Many states enacted new employment protections during 2024 and early 2025, focusing on paid leave expansion, whistleblower protections, pay transparency, criminal history inquiries and workplace safety. For example, New Jersey has expanded its Family Leave Act to cover employers with 15 or more employees, wherever located. Its federal counterpart, the Family and Medical Leave Act, applies to employers with 50 or more employees in a 75-mile radius of employee locations. As one can see, the change to New Jersey leave impacts many more small employers, or even employers who may have only one employee working in that state. 

Some of the new laws focus on creating greater employee protections. For example, California has extended discrimination protection based on “intersectionality” — meaning discrimination on the basis of two or more protected characteristics. California is the first state to codify this protection. Illinois has added “family caregiver” as a protected characteristic under its Human Rights Act. Now caregivers are protected from discrimination on this status in hiring, firing and terms and conditions of employment. 

This means that multi-state employers confront a compliance landscape that grows more fractured daily, and may conflict with practices that federal agencies once endorsed. Employers must navigate the potential for conflict while still complying with state laws that diverge from federal enforcement policies.

Divergent standards create operational challenges

An employer might develop one harassment prevention policy for California that incorporates protections the EEOC rescinded, another for states following prior federal guidance and yet another for jurisdictions that never adopted the withdrawn standards. This fragmentation demands separate training programs, distinct reporting procedures and jurisdiction-specific investigation protocols.

Consider an employer using AI in hiring. Federal AI guidance is disappearing while California, Illinois and other states impose specific requirements. Employers must navigate state-by-state variations without federal direction, creating compliance costs that disproportionately affect organizations without sophisticated legal departments.

Leave administration becomes increasingly complex

Family and medical leave demonstrates the patchwork’s practical impact most acutely. Some states have their own family or medical leaves that may apply, depending upon the size of the employer. Most leave laws require employers to provide unpaid leave and job restoration guarantees, and refrain from retaliation. Some state laws may run concurrently with the FMLA; others may be in addition to FMLA leave, greatly expanding the time an employee may be away from the workplace. Also, several states have their own paid benefit program for employees who take leaves under state laws that an employer must coordinate with paid time off, sick leave, state paid sick leave laws, and other factors.

An employer with operations in New Jersey, California, Delaware and Connecticut, for example, must track different employer size thresholds, employee eligibility requirements, leave entitlements, wage replacement provisions and job protection guarantees.

Each jurisdiction coordinates leave benefits differently from the FMLA, requiring employers to determine which leaves run concurrently and which provide separate entitlements.

Policy harmonization becomes elusive

Employers traditionally sought to implement uniform nationwide policies that meet the highest standard, ensuring compliance everywhere. This approach grows increasingly untenable.

States enact laws that conflict not just in degree but in kind. Some states prohibit discrimination based on intersectionality or LGBTQ+ status while federal enforcement retreats from single-characteristic disparate impact claims and transgender or gender identity protections.

Administrative burdens escalate

Every state that expands protections requires employers to revise handbooks, update training materials, modify HR systems and educate managers. When federal guidance disappears simultaneously, and the states fail to provide guidance on the new laws, employers must determine which standards to maintain and which to abandon, how to interpret the new requirements without the benefit of interpretation documents or a body of case law.

HR departments strain to track which employees fall under which laws, which forms apply in which states and which posting requirements govern which locations. Small and mid-sized employers that lack dedicated compliance staff face particularly acute challenges. And that challenge can become more problematic with employees who work remotely in states different from employer locations.

Prudent employers may wish to establish best practices for addressing the patchwork problem.

Recommendations for employers

Conduct jurisdiction-specific audits. Review policies, handbooks and practices in each state where you operate. Identify gaps created by federal guidance withdrawals and new state law requirements.

Implement robust tracking systems. Invest in HR technology that tracks different requirements across jurisdictions, particularly for leave administration, discrimination protections and hiring practices.

Develop state-specific training. Create training programs tailored to each state’s requirements rather than relying on one-size-fits-all materials that may no longer reflect the legal landscape.

Monitor state legislative activity. Establish processes to track pending state legislation and anticipate changes before they take effect.

Maintain federal standards where appropriate. Consider whether withdrawn federal guidance still represents “best practices” even absent enforcement priorities. Some protections may exceed legal requirements, which are a floor, but serve legitimate business interests.

Document decision-making. When choosing between competing standards or determining policy approaches in light of guidance withdrawals, document the reasoning behind your decisions.

Seek specialized counsel. Partner with employment counsel and experienced HR professionals who understand both the withdrawn federal framework and emerging state requirements to navigate this complex landscape strategically.

The simultaneous withdrawal of federal guidance and expansion of state protections creates unprecedented compliance challenges for multi-state employers. Organizations may be well served by moving away from reliance on uniform nationwide policies and embrace jurisdiction-specific approaches that reflect the divergent regulatory landscape. Or, alternatively, they may create nationwide policies that comply with the strictest state law compliance requirements. But either choice comes with burdens and benefits.

Proactive employers who invest in comprehensive audits, robust tracking systems, and specialized training will navigate this patchwork more successfully than those who react to problems as they arise. The complexity will not diminish in the near term; employers are urged to act proactively and continue to monitor developments.

Employers are contending with a version of the U.S. Equal Employment Opportunity Commission they’ve never seen before, attorneys at Duane Morris said during a virtual presentation.

“Change is the new normal, and this is not your father’s, mother’s or grandparents’ EEOC,” said Gerald Maatman, partner at the firm. “It’s a very new agency that we’re seeing in front of us.”

EEOC’s 2025 enforcement data show it pursued more religious and pregnancy discrimination cases than in prior years, while disability discrimination remained a frequent type of filing, Maatman said. The agency’s data also showed a “heavy dose” of retaliation cases, he noted.

Taken together with the commission’s legal activity so far in 2026, the data suggest EEOC will continue to prioritize disability, religion and race discrimination claims through the second half fiscal year 2026, said Jennifer Riley, partner at Duane Morris.

Riley and Maatman specifically highlighted the agency’s attempt to enforce an administrative subpoena against Nike as a signal of its priorities. EEOC sought information on Nike’s diversity, equity and inclusion programs, requesting employee records and descriptions of the company’s efforts to increase representation of racial and ethnic minorities.

“In my 40 years of defending employers dealing with EEOC investigations and lawsuits, this was a very unique situation and kind of the tip of the spear of the Trump-led EEOC championing attacks on DEI programs,” Maatman said of the Nike case.

The case law on EEOC subpoena enforcement appears favorable to the commission, he added, so courts are likely to order employers to comply. 

Additional shifts can be seen in how current EEOC leadership has pivoted away from the agency’s 2022-2026 Strategic Plan, which Maatman said essentially serves as a blueprint for the agency over a four-year period. That document was supplemented by the 2024-2028 Strategic Enforcement Plan, which outlined six subject matter enforcement priorities.

For example, the strategic plan called on EEOC to file bigger, targeted lawsuits seeking widespread equitable relief and prosecute systemic “pattern and practice” discrimination cases affecting large groups of workers. The SEP, meanwhile, identified protection of “vulnerable workers” — such as immigrant workers, workers with certain disabilities and LGBTQ+ workers — as one of the agency’s six priorities.

Under Chair Andrea Lucas, EEOC has instead prioritized enforcement of “reverse bias” claims against majority-group workers, including White male workers, Maatman said. Those efforts also extend to American workers who the agency alleges have suffered national origin discrimination, said Daniel Spencer, partner at Duane Morris.

There’s also been an emphasis on pre-litigation mediation, conciliation and settlements, from which it obtained $528 million from employers in 2025. Per the agency, this the highest such amount obtained in a fiscal year in EEOC history. Even so, the commission collected $660 million in total monetary relief, slightly down from 2024’s nearly $700 million recovery total. According to Maatman, the split between pre- and post-litigation recovery also shows how the agency’s tactics are shifting.

“The EEOC is front-end loading its settlements more prior to filing the lawsuits, certainly threatening to file lawsuits, and getting a lesser amount of money in terms of the settlements for its merits lawsuits,” he said.

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Bringing on your first team member is a major win. Of course, it also means tackling a whole new to-do list, especially when it comes to handling HR compliance and keeping up with employment laws.

Handling HR correctly helps protect your company and build trust with your team. It also lays the groundwork for sustainable growth. Let's explore HR compliance for startups, including the main areas to focus on. We'll also share practical steps for building HR processes that support your business from day one.

Why HR Compliance Matters for New Businesses

HR compliance gives you a clear framework for meeting regulatory requirements. This framework guides your business to follow employment laws, calculate accurate tax deductions, maintain proper records and manage employee classifications. With organized processes in place, it’s easier for you to make confident decisions and scale your operations.

HR compliance also fosters a strong company culture. When your employees feel respected and confident in how you apply policies, their engagement and loyalty generally increase. The framework also provides clarity on work hours and leave policies. Clear guidelines help prevent confusion and ensure that your daily operations run smoothly.

Important HR Compliance Categories to Know

You don't have to master HR compliance for startups overnight. However, understanding the different compliance categories can help you manage them adequately. Here are the three main areas of HR for startups:

Labor Laws

These employment laws cover essentials like wage requirements, overtime pay, anti-discrimination protections and parental or maternity leave rights. Federal rules apply to all businesses, but many states have additional requirements.

Employee Benefits

HR for small business compliance may involve building a benefits package for employees. Perks can include health insurance, paid leave, flexible working schedules, performance bonuses, mental health support and retirement plans. Some benefits may be mandatory depending on your company's size and location. Even when optional, a supportive benefits package can attract top talent and improve your employee retention.

Workplace Safety

As the employer, you're responsible for providing a safe working environment. That includes adhering to OSHA standards, plus any state-specific safety laws that apply to your industry.

How to Build HR Compliance From Day One

As a startup founder, you may be managing HR tasks alongside many other priorities. To avoid compliance headaches, you'll need to keep your paperwork in order. Establishing a system should be top of your list, but rest assured that even a basic process can get the job done. Here is how to set it up:

1. Create Clear Policies: Develop handbooks for employees that outline expectations and benefits, along with procedures for raising concerns. Written guidelines can help reduce misunderstandings.
2. Store Employee Information Securely: Keep contracts, tax forms, employee data and benefits selections organized in one secure system. Digital tools can simplify data management and reduce errors.
3. Set Payroll and Benefits Processes: Decide on your payroll schedule and verify your tax reporting deadlines. Linking benefits enrollment directly to payroll can make deductions easier and more accurate.
4. Schedule Regular Reviews: Establish a yearly check-in to review your policies and update them as your team evolves or regulations change. These reviews can keep your HR practices current and your workplace running smoothly.

By building your compliance system step by step, you can grow your HR process in a manageable way, rather than scrambling when issues arise.

Common Compliance Mistakes in HR for Startups 

Even if you try to do everything correctly, you may encounter challenges with HR compliance. Here are a few that can arise:

• Skipping Documentation: Verbal agreements or informal notes can create confusion later. 

  Tips: Keep contracts, job descriptions, salary changes and benefit elections in writing. Store them in a secure, organized system so they’re easily accessible.

• Overlooking Local Rules: Federal laws are just one part of the picture. You also need to follow state and city regulations.  

  Tips: Stay informed about local labor and tax requirements. Adjust your policies as needed.

• Delaying Policy Updates: Old handbooks and agreements often become outdated as your startup evolves. 

  Tip: Schedule annual reviews of your HR policies and update them.

• Misclassifying Workers: Treating contractors as employees or vice versa can lead to challenges later. 

  Tip: Regularly review IRS and state guidelines to make sure everyone’s classification aligns with current rules.

Tools and Resources for HR Compliance

You might be running a small team, but you don't have to tackle compliance solo. Here are some tools and resources that can help lighten the load:

• Government Resources: Agencies like the Department of Labor and OSHA provide free compliance checklists and training materials.
• Professional Support: Consider working with HR consultants or platforms with expert support that specialize in helping startups stay compliant.
• HR Software: Platforms that automate HR processes can simplify compliance. For example, Justworks Payroll combines payroll, onboarding, benefits administration and compliance in one place. 

You Need Guidance, Not Just Tools

Software can help automate payroll, store employee records and flag compliance deadlines. But when complex questions arise, like updating policies, handling a sensitive employee issue or preparing for growth, tools alone aren’t always enough.

Startups don’t just need systems. They need guidance.

Getting HR right early on means having access to experienced professionals who can help you interpret changing regulations, review policies and think through people decisions strategically—not just administratively.

Get “Big Company” HR Advice on a Startup Budget

You don’t have to hire a full-time in-house HR leader to get experienced support. With access to an on-demand consulting team, you can get “big company” HR advice on a startup budget with Justworks. That means personalized guidance when you need it — without the headcount cost.

HR for Small Business Compliance: How Justworks Can Help

HR compliance is really just about getting your house in order. It means staying on top of employment laws, classifying workers correctly and keeping your records straight. If you nail these processes early, you can scale with confidence knowing your bases are covered.

Justworks simplifies HR for startups by combining streamlined payroll, access to competitive benefits, compliance support and 24/7 expert support. Use these powerful tools to build a strong HR foundation, so you can spend more time growing your business. Get started with Justworks today.

The U.S. Department of Labor announced it will move to rescind the Biden administration's 2024 independent contractor rule on March 27, according to a document set to be published in the Federal Register.

DOL’s Wage and Hour Division looks to return to the “economic reality test” for determining whether a worker is an independent contractor under the Fair Labor Standards Act.

The economic reality test weighs whether the work is an individual’s main source of income through two core factors: the degree of a worker’s control over their work, and the opportunity for profit or loss based on initiative, investment or both.

This approach largely revives a final rule that was adopted in 2021 during President Donald Trump’s first term.

DOL also would use that analysis in implementing the Family and Medical Leave Act and the Migrant and Seasonal Agricultural Worker Protection Act, it said.

The rule would replace the Biden-era “totality-of-the-circumstances” framework used to determine whether a worker was an independent contractor or an employee. At the time, SHRM said the 2024 rule “fosters ambiguity, deterring businesses from extending essential training to independent workers, a detrimental scenario for both parties involved.”

Why replace the 2024 final rule

In a press briefing Thursday morning, a WHD administrator said it was important to replace the 2024 final rule — not just rescind it — because the DOL was concerned that the multiple economic reality factors described by the 2024 rule “were viewed as setting a higher and … broader bar” than the U.S. Supreme Court and other courts used to determine independent contractor status.

Ultimately, the spokesperson said, the goal is to “provide greater clarity” for businesses and workers when determining independent contractor status during the hiring process.

“Doing that properly under the proposal would lead to a reduced number of misclassifications in both directions,” he added.

What the proposed rule means for workers and employers

Is this proposed regulation less worker-friendly? It may be hard to say.

“Commentators like to call the newer rule ‘employer-friendly’ and the prior 2024 rule ‘employee-friendly,’ but in my experience, that is reductive and ignores the nuance these situations present,” Nisha Verma, a labor and employment attorney for Dorsey & Whitney, told HR Dive via email. 

Workers might actually favor the 2026 independent contractor classification because they’re working with several firms and don’t want to be “beholden to one corporation,” Verma said. Individuals are making these choices often because of layoffs and the state of the economy, she added, so DOL’s proposal “comes at the right time.”

“I would like to see worker choice play more of a role in the analysis going forward, particularly since workers are more aware of their own tax circumstances, ability to earn other income, and need for flexibility than the business,” Verma said.

A 60-day public comment period begins Friday and ends on April 28. DOL would then need to adopt a final rule.

Can a Black worker discriminate against a Black colleague on the basis of race? Are racy photos in the company uniform posted on social media always a slam-dunk reason for termination?

At an employment law briefing held March 10 by the National Employment Law Institute, Elizabeth Minoofar and Madalyn Doucet, employment law attorneys at Paul Hastings, highlighted several judgments from the past few years employers ought to keep in mind when handling workplace complaints. 

Same-race harassment can constitute actionable discrimination

In Smith v. P.A.M. Transport, two Black truck drivers brought claims of race discrimination, hostile work environment and retaliation after allegedly being subjected to worse working conditions than White co-workers and being called racist terms by supervisors. 

A district court dismissed their claims, determining the terms were “not plainly racist” and that one of the supervisors himself was Black. But an appeals court reversed, finding that one particular term “has an extensive history as a racial slur against African Americans,” and that the supervisor, while Black, could still engage in racial bias against Black workers.

“What stuck out to me” about the decision, Minoofar said, was the court’s explanation that the racist nature of the terms used “was not obviated simply because one of the two supervisors at issue in this case was also African American.”

“There’s definitely a mix of case law on this,” she said, noting past cases in which the alleged harasser having the same protected characteristics as the complainant weighed against the plaintiff. “But I think I would say more recently, we’ve seen the tide turn on this argument, and more and more, we’re seeing cases along the lines of Smith out of the 6th Circuit.”

DEI training can create a hostile work environment if sufficiently unbalanced

While the federal government has set its sights on DEI over the past year, recent litigation has shown courts do not generally consider the training on its own to be hostile. In Young v. Colorado Department of Corrections, for example, a White plaintiff complained a training was discriminatory because it targeted White people as responsible for race discrimination. When he was told his complaint would not be investigated, he resigned and sued, alleging a hostile work environment. The district court dismissed his case, and the 10th Circuit affirmed, noting that one training that did not result in harassment from colleagues did not constitute a hostile work environment.

On the other hand, in Chislett v. New York City Dept. of Education, the 2nd Circuit revived a case in which a White former educator tied a hostile work environment to DEI training that resulted in alleged co-worker harassment that extended into ordinary workplace interactions. The training involved segregating people by race, allowed colleagues to describe the worker as “White and fragile,” “paternalistic,” “defensive” and other terms, and appeared to foster other hostility. The 2nd Circuit found the different circumstances together formed a “mosaic” of evidence that could convince a reasonable jury to find in the plaintiff’s favor. 

While it’s important to conduct anti-harassment training, employers should ensure “it applies equally to all employees” and avoids “this type of language,” Minoofar said.

Be wary of questioning the sincerity of religious beliefs

In Barnett v. Inova Health Care Services, a healthcare worker alleged religious discrimination after her employer turned down her request not to receive the COVID-19 vaccine. While she had initially been given an accommodation related to lactation and nursing, the company changed its process and denied an exemption she requested after praying and studying the Bible. While a district court held for the employer, the 4th Circuit reversed, stating that at the motion-to-dismiss stage, a plaintiff only needs to allege her religious beliefs are sincerely held. 

“​​When I’m advising clients on these types of issues, it’s almost always to say that if you are going to question the sincerity or the religiosity of your employees’ asserted belief, you are treading on very thin ice,” Doucet said. “It’s just a dangerous game to play.”

Comparators can make or break a case

The importance of comparators is a theme that emerges throughout discrimination case law, Minoofar said. 

In Wawrzenski v. United Airlines, for example, a flight attendant who said she’d endured years of sex discrimination and harassment was fired by the airline after it investigated an anonymous complaint that she’d posted suggestive photos of herself in uniform on her Instagram page and linked to her OnlyFans account, violating company policy. While a district court held in United’s favor, a California appeals court reversed, finding that three male colleagues with similar social media activity were sufficient comparators for a reasonable jury to conclude the firing was pretextual. 

“This is a good reminder that while employees certainly can be disciplined for public social media use, if you have a policy in place, you still absolutely have to consider comparators and make sure that if you’re going to apply the policy, that it’s evenly applied to everyone,” Minoofar said.

The National Labor Relations Board announced a final rule Feb. 26 to withdraw its Biden-era joint employer rule in favor of a standard it adopted in 2020 during the first Trump administration.

A federal judge previously vacated the now-withdrawn rule — which was published in 2023 — because it was both “contrary to law” and “arbitrary and capricious,” following a challenge filed by business groups. NLRB said the 2023 rule has never taken effect and that the 2020 rule was and remains the operative rule for determining joint employer status under the National Labor Relations Act.

NLRB also said it determined that good cause existed for issuing Thursday’s rule without prior notice and opportunity for public comment. The withdrawal of the 2023 rule is effective immediately.

“Our action is ministerial and therefore will have no separate economic effect,” the board wrote.

Joint employer status has had a long, back-and-forth history between recent presidential administrations. The two major parties have offered divergent perspectives on what the NLRA requires in order to find that two or more employers are joint employers of the same employee.

The 2023 rule, for instance, stated that such entities are joint employers if they share or codetermine essential terms and conditions of employment. This occurs, per the rule, when the entities possess or exercise either direct or indirect control over one or more such terms.

NLRB first applied that standard in its 2015 Browning-Ferris Industries decision, which was itself subject to an attempted reversal during the first Trump administration.

The board’s 2020 rule was meant to overturn the rationale behind Browning-Ferris. It limited joint employer status under the NLRA only to those entities that possess and exercise substantial direct and immediate control over an employee’s essential terms of employment. The 2020 rule also exclusively limited the list of essential terms to factors such as wages, benefits, hours of work, hiring, discharge, discipline, supervision and direction.

Thursday’s rule retains the 2020 rule’s language, defining “substantial” direct and immediate control to mean that which has a regular or continuous effect on an essential employment term or condition, rather than on a “sporadic, isolated or de minimis basis.”

Unlike the 2023 rule, the 2020 rule specifies that indirect control is probative of joint employer status, but only to the extent that it supplements and reinforces evidence of possession or exercise of direct and immediate control.

“Joint-employer status must be determined on the totality of the relevant facts in each particular employment setting,” NLRB said. “The party asserting that an entity is a joint employer has the burden of proof.”

Sen. Patty Murray, D-Wash., criticized the decision in an email to HR Dive, writing that the 2020 rule gives “the biggest corporations cover to deny workers their ability to band together for better wages and working conditions and leaving millions of workers in the lurch, vulnerable to egregious violations of their rights.”

In a twist just days earlier, NLRB said it would reaffirm its 2015 Browning-Ferris decision that the titular employer, Browning-Ferris Industries, was a joint employer under the standard outlined by the Obama-era board. This was done at the direction of a federal court, however, and the agency said Browning-Ferris had “no application to cases arising after the effective date of the Board’s 2020 joint employer rule.”

A White police officer who lost out on a promotion to an Arab Muslim colleague deserves to take his discrimination claims to court, the 3rd U.S. Circuit Court of Appeals determined March 6.

The officer in Massey v. Borough of Bergenfield, et al. vied for a promotion to chief of police with his counterpart in August 2019, following an interview process that came down to the two candidates. The plaintiff had eight more years of experience at the department and, as “officer in charge” at the time of the interviews, was “responsible for three-quarters to 90 percent of the department on a day-to-day basis.” His counterpart had received several promotions since joining in 2003, but also was the subject of several complaints and one suspension, according to court documents.

After he was not selected for the role, the plaintiff filed a lawsuit against the borough and five members of the hiring committee under the New Jersey Law Against Discrimination and the Civil Rights Act of 1866, alleging racial and religious discrimination. 

Finding the plaintiff had not met the requirements of the New Jersey law’s “background circumstances rule” — a rule that requires a nonminority plaintiff to “show that he has been victimized by an unusual employer who discriminates against the majority” — a district court granted summary judgment for the defendants in the case.

Recent SCOTUS ruling takes center stage

On appeal, the 3rd U.S. Circuit Court of Appeals pointed to the U.S. Supreme Court’s 2025 decision in Ames v. Ohio Department of Youth Services — a development that occurred after the district court’s opinion. The high court’s unanimous decision found that the 6th Circuit’s former “background circumstances” rule for proving discrimination cut against Title VII of the Civil Rights Act of 1964.  

“Although the Supreme Court of New Jersey has not yet had occasion to address Ames, we predict that the court would rely on Ames to conclude that the State’s Background Circumstances Rule no longer has a permissible role to play in litigation under New Jersey’s Law Against Discrimination,” the 3rd Circuit said.

The plaintiff in the case had credible evidence to convince a jury of discrimination, the 3rd Circuit found. Among that evidence, one member of the panel said she preferred the winning candidate because “he’s a minority,” the borough administrator told the plaintiff the decision was “all about race,” and one panel member had previously told the plaintiff he did not “look like the people in the town,” according to the 3rd Circuit’s opinion. 

“The Third Circuit’s decision confirms that anti-race discrimination statutes, including the New Jersey Law Against Discrimination, apply to everyone equally, regardless of race,” Dylan Hastings, an attorney for the plaintiff in the case, told HR Dive. “As can be gleaned from the decision, there is significant evidence that the promotional decision was indeed influenced by race, and we look forward to proving that at trial.”

Attorneys for the borough did not respond to a request for comment by press time. 

Massey is one of the earliest applications of Ames v. Ohio Dept. of Youth Services, aligning with attorneys’ predictions that “reverse discrimination” will be an active area for litigation this year. While some said they expect much of the action to come from the U.S. Equal Employment Opportunity Commission, Massey may be an early indication of shifting ground beyond the agency.