Diversity, Equity, and Inclusion in the Workplace (2026)

What Changed for Diversity, Equity, and Inclusion Programs in 2025 and 2026

The biggest changes came from the White House, the EEOC and the courts. Here's the timeline, followed by what each change means.

Executive Order 14173 and Federal Contractors

On January 21, 2025, President Trump signed Executive Order 14173, "Ending Illegal Discrimination and Restoring Merit-Based Opportunity." It revoked Executive Order 11246, the 1965 order behind federal contractor affirmative action plans. Contractors could keep following the old rules for 90 days.

The order also requires federal contracts and grants to include two terms:

• The contractor or grant recipient agrees that following all federal anti-discrimination laws is "material" to the government's payment decisions under the False Claims Act.
• The contractor or grant recipient certifies that it doesn't operate any programs promoting DEI that violate federal anti-discrimination laws.

The materiality term matters because a false certification could lead to a False Claims Act case. The order also told each federal agency to identify up to nine possible civil compliance investigations of large organizations, such as publicly traded companies, large nonprofits, foundations with assets of $500 million or more, bar and medical associations, and universities with endowments over $1 billion.

The Labor Department published a final rule on August 21, 2026, that removes the Executive Order 11246 regulations effective October 26, 2026. Federal contractors still have affirmative action duties for people with disabilities under Section 503 of the Rehabilitation Act, though a separate 2026 rule dropped the 7% utilization goal and the disability self-identification invitation.

If you don't hold federal contracts or grants, the certification requirement doesn't apply to you directly. Title VII still does if you have 15 or more employees.

Court Challenges to the DEI Executive Orders

In National Association of Diversity Officers in Higher Education v. Trump, a federal judge in Maryland blocked parts of the orders on February 21, 2025. The Fourth Circuit paused that injunction on March 14, 2025, and vacated it on February 6, 2026. The appeals court said the certification requirement only asks businesses to certify that they follow existing anti-discrimination law. The case went back to the trial court, and the orders remain in effect.

In a separate case, Chicago Women in Trades v. Trump, a federal judge in Illinois blocked the Labor Department from enforcing the certification requirement in 2025. The government appealed, and the Seventh Circuit heard arguments in January 2026.

EEOC and Justice Department Guidance on DEI-Related Discrimination

On March 19, 2025, the EEOC and the Justice Department released two technical assistance documents: "What To Do If You Experience Discrimination Related to DEI at Work" and "What You Should Know About DEI-Related Discrimination at Work." They're non-binding, but they show how the agencies plan to enforce the law. Here are the main points in the EEOC's own terms:

• Title VII's protections apply equally to all workers, and the EEOC says there's no such thing as "reverse" discrimination, only discrimination.
• Using race, sex or another protected trait in hiring, firing, pay, promotion, training, mentoring, internships or interview selection can be illegal, even as part of a DEI program.
• Limiting employee resource groups or other affinity groups to certain protected groups can be illegal segregation.
• Separating workers by a protected trait for training can be illegal, even when each group gets the same content.
• "Diverse slate" hiring rules can create risk because they may require asking about an applicant's race before hiring.
• DEI training can contribute to a hostile work environment if it's discriminatory in design, content or execution.
• An employee who opposes a DEI practice with a fact-based reason to think it's illegal can be protected from retaliation.
• Customer preference and a general interest in diversity aren't defenses to a job decision based on race.

The same guidance says Title VII allows diversity efforts designed to open up opportunities to everyone.

On February 26, 2026, the EEOC chair sent a reminder letter to hundreds of large employers. It says programs with other names, such as "Inclusion & Diversity" or "Belonging," are judged by the same rules.

Ames v. Ohio Department of Youth Services (2025)

Marlean Ames, a heterosexual woman, claimed her state employer passed her over for a promotion and then demoted her because of her sexual orientation. The lower courts required her to show extra "background circumstances" because she belonged to a majority group.

On June 5, 2025, the Supreme Court unanimously rejected that rule. The Court said Title VII "draws no distinctions between majority-group plaintiffs and minority-group plaintiffs." Every employee now uses the same standard to prove a discrimination claim.

For your business, that means a claim from any employee gets the same review. Clear, job-related reasons for your decisions are your best protection in every case.

Students for Fair Admissions v. Harvard (2023)

On June 29, 2023, the Supreme Court ruled 6 to 3 that the admissions programs at Harvard and the University of North Carolina violated the Equal Protection Clause. The case was about college admissions and didn't decide any employment question. It's still cited often in the debate over workplace DEI programs.

EEOC Policy Changes in 2026

On January 22, 2026, the EEOC voted 2 to 1 to rescind its 2024 Enforcement Guidance on Harassment in the Workplace. The EEOC chair said federal laws against discrimination, harassment and retaliation, and the Supreme Court cases interpreting them, "remain firmly in place."

In June 2026, the EEOC also rescinded its long-standing guidelines on affirmative action under Title VII and the related section of its compliance manual. Those guidelines had described when an employer could take voluntary, race- or sex-conscious steps to improve opportunities for women and minorities.

The Debate Over DEI Programs in the Workplace

DEI is one of the most debated workplace topics right now, and people hold strong views on both sides.

• Supporters say well-designed programs help businesses reach more job candidates, keep good employees and make sure people from different backgrounds get a fair shot.
• Critics say some programs treat people differently because of race or sex, divide coworkers, or break civil rights law, and that hiring and promotion should rest on merit alone.

For a small business, the legal baseline is the same either way. Job decisions can't be based on race, color, religion, sex, national origin, age, disability or genetic information. The practical steps below follow that baseline.

Practical Steps for Fair and Lawful Employment Practices

These steps follow federal law and the EEOC's current guidance. They work whether or not your business uses the term DEI.

Base Hiring and Promotion Decisions on Job-Related Criteria

The safest practice is to base every hiring, firing, promotion and discipline decision on work factors such as skills, experience, performance and attendance. Personal matters that have nothing to do with the job should stay out of it.

• Write down the duties, skills and experience each job needs before you start interviewing.
• Ask every candidate for the same role the same core questions.
• Keep short notes on why you chose one candidate, tied to the job requirements.
• Don't ask about race, religion, age, disability, pregnancy or other protected traits during hiring.

Post Jobs Openly and Recruit Widely

Posting openings where many people will see them, such as job boards, your website, local schools and trade groups, gives you a bigger pool of candidates. That's good for hiring the right person, and the EEOC's guidance says diversity efforts that open opportunities to everyone are allowed.

The risk comes from limiting who can apply, or screening people out, based on a protected trait. If your state requires pay ranges in job postings, include them (see the state section below).

Pay People Fairly for the Same Work

The Equal Pay Act requires equal pay for men and women who do substantially equal work in the same workplace. What matters is the actual work, whatever the job title. All forms of pay count, including benefits.

Title VII, the ADA and the ADEA also ban pay discrimination based on race, color, religion, sex, national origin, age or disability. If you find an unfair gap, you can't fix it by lowering anyone's pay.

Keep Workplace Communication Professional

Treat every employee as the professional you hired. You don't have to agree with an employee's political, social or religious views, and you don't need to discuss them at work.

Keep work conversations focused on work and hold everyone to the same standards. Religion is a protected trait under Title VII, so be careful with any comment or decision based on someone's beliefs.

Managers set the tone. Inc. Magazine has reported that managers are the top reason people quit their jobs, so it's worth training yours on these basics.

Use the Same Written Policies for Everyone

Written policies help you treat people the same way every time. Most small businesses benefit from clear policies on:

• Equal employment opportunity and anti-harassment, with a simple way to report a problem
• Requests for accommodations
• Pay, raises and promotions
• Attendance, discipline and time off

Apply each policy the same way to every employee. Post the EEOC's "Know Your Rights" poster where employees and applicants can see it, and the EEOC encourages posting it on your website too.

Handle Accommodation Requests Promptly

If you have 15 or more employees, three federal laws can require you to make changes at work:

• The ADA requires reasonable accommodations for qualified applicants and employees with disabilities.
• The PWFA requires reasonable accommodations for known limitations related to pregnancy, childbirth or related medical conditions, unless they'd cause an undue hardship.
• Title VII requires accommodating an employee's religious beliefs or practices unless the burden would be substantial in the context of your business.

Common accommodations include schedule changes, more breaks, a stool or other equipment, dress code changes, shift swaps and time off for medical appointments. Talk with the employee about what they need. Under the PWFA, you can't require leave if another accommodation would let the employee keep working.

Prevent and Respond to Harassment

Harassment based on a protected trait is illegal when it becomes a condition of keeping the job, or when it's severe or pervasive enough that a reasonable person would find the workplace intimidating, hostile or abusive. You can be liable for harassment by supervisors, coworkers and even customers or contractors you control.

The EEOC's harassment page recommends four steps:

• Tell employees clearly that harassment won't be tolerated.
• Set up an effective way to make complaints.
• Train managers and employees on harassment.
• Act right away when someone complains.

Taking these steps also matters legally. When a supervisor's harassment doesn't lead to a firing, demotion or similar action, you can avoid liability by showing you reasonably tried to prevent and promptly correct it, and that the employee unreasonably didn't use your complaint process.

Keep Good Employment Records

The EEOC's recordkeeping rules set minimum retention periods:

Private employers with 100 or more employees must also file an EEO-1 report each year. Federal contractors with 50 or more employees have also had to file, but that requirement came from the contractor regulations the Labor Department is removing, so check the EEOC's instructions before the next filing.

Accurate time and pay records support every one of these steps. Our guide to employee time tracking compliance covers the basics.

Ask Your Team for Feedback

No two people are the same, and your employees often know what's working better than anyone. A short conversation or an anonymous survey can turn up problems you didn't know about, or show that something you worried about isn't a big issue.

Keep surveys focused on the workplace. If you ever collect demographic information, make it voluntary, keep it separate from personnel files, and never use it in a job decision.

State Laws That Add Requirements for Employers

Many states go further than federal law. Two common areas are pay transparency and harassment prevention training.

Pay Range Disclosure Laws

These states require employers to include a pay range in job postings. The size limits below are for the posting rule.

Maryland and Washington, D.C., also require pay ranges in job postings, and several cities, including some in Ohio, have their own rules. Rules on what to include (salary only, or benefits too) differ by state.

Harassment Prevention Training and Other State Rules

Several states require employers to train employees on harassment prevention, and some of those rules apply to small businesses. They differ on who must be trained, for how long and how often, so check your state's civil rights or labor agency.

State anti-discrimination laws can also cover businesses with fewer than 15 employees and protect more traits than federal law. Some states, for example, protect workers younger than 40 from age discrimination.

Bottom Line

Federal law sets the floor, and your state may add more. If you have employees in more than one state, follow the rules for each state where they work.

Final Thoughts on Diversity, Equity, and Inclusion Compliance

The language and politics around diversity, equity, and inclusion will keep changing. The core rule for employers has been in place since the Civil Rights Act of 1964: treat every applicant and employee fairly, and base job decisions on the work.

Recruit widely, use clear and job-related criteria, pay fairly, respond to accommodation requests, stop harassment early and keep good records. Those habits follow the law and help you build a team that wants to stay.

TimeClick Embraces Diversity

We're a small team with members from different states, ethnicities and backgrounds. We know our readers and customers come from a wide range of industries, each with its own needs, so we build our software to be as customizable as possible.

TimeClick makes employee time tracking fit the way your organization works, whether you manage teams across departments, offer PTO or have salaried employees who track their hours.

Have questions? Call us at (435) 753-4102, email sales@timeclick.com or chat with us at timeclick.com.

This guide is general information and isn't legal advice. For your situation, check with an employment attorney or your state's civil rights agency.