Quick Hits

• The WHD is withdrawing a December 2024 proposal to eliminate subminimum wage certificates for workers with disabilities.
• The agency, at the direction of the Trump administration, cited a lack of statutory authority to unilaterally terminate the program.

On July 7, 2025, the WHD published a notice in the Federal Register announcing the withdrawal of a proposed rule published on December 4, 2025, that would have phased out the practice of issuing certificates under Section 14(c) of the FLSA to allow employers to pay subminimum wages to certain workers with disabilities.

Section 14(c) of the FLSA requires the DOL to issue certificates permitting employers to pay workers with disabilities at rates below the minimum wage to the extent “necessary to prevent the curtailment of opportunities for employment.” The program applies to workers whose “earning or productive capacity is impaired by a physical or mental disability,” including developmental disabilities, blindness, mental illness, cerebral palsy, alcoholism, and drug addiction.

The December 2024 proposed rule would have phased out the issuance of new Section 14(c) certificates over a three-year period. At the time, the WHD argued that the program was no longer necessary as employment opportunities for workers with disabilities have vastly expanded in recent decades due to legal, social, and technological developments.

However, after consideration of over 17,000 comments, including more than 11,000 unique comments, the WHD is now seeking to withdraw that proposed rule. Specifically, the WHD said it was influenced by “concerns expressed by Members of Congress and others that it lacks statutory authority to unilaterally and permanently terminate the issuance of section 14(c) certificates.”

The WHD determined that Section 14(c) imposes a “mandatory duty” on the DOL to issue subminimum wage certificates. The WHD noted that states that have ended their similar subminimum wage programs “have done so through state legislation consistent with their respective constitutional frameworks,” and the fact that some states have ended their programs “does not necessarily mean such provisions are no longer needed to prevent curtailment of employment opportunities.”

While the WHD acknowledged the significant decline in Section 14(c) certificates—which dropped from 424,000 in 2001 to 40,579 in 2024—the WHD said the numbers show tens of thousands of workers still rely on the Section 14(c) program. “That inference is bolstered by comments asserting that many individuals with significant disabilities would face unemployment, underemployment, or loss of ancillary services if 14(c) options were eliminated,” the WHD stated.

Next Steps

The withdrawal of the proposed rule to end subminimum wages comes with a change in leadership at the DOL since President Donald Trump took office in January 2025.

The proposed rule was anticipated to increase labor costs for some employers with workers eligible for subminimum wage rates. Employers may still want to review their pay policies to stay compliant with state and federal minimum wage and overtime rules.

Ogletree Deakins will continue to monitor developments and will provide updates on the Multistate Compliance and Wage and Hour blogs as additional information becomes available.

This article and more information on how the Trump administration’s actions impact employers can be found on Ogletree Deakins’ New Administration Resource Hub.

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Quick Hits

• A handful of new Florida laws went into effect on July 1, 2025.
• New legislation changes the number of hours minors may work and their break entitlements and provides increased flexibility for certain minors who are at least 16 years old.
• The Florida minimum wage rate is increasing to $14 per hour for nontipped employees and $10.98 per hour for tipped employees.
• New legislation makes significant changes to workers’ compensation laws in order to give injured employees improved access to care.
• New regulations in the hospitality industry streamline the removal of nonpaying guests and mandate clear disclosure of operational charges in restaurants.

Minors’ Working Hours

The legislature enacted legislation which removes some of the previous limitations on minors’ hours and schedules. Now, employers may schedule minors aged at least 16 years old during the school year without limitation, along with minors aged 14 and 15 who have graduated from high school or are home/virtual-schooled. This means that such minors may now be scheduled to work overnight shifts both during the school term and summer break. The legislature also removed previous break requirements for minor employees. As a result, minors who are at least 16 years old may be scheduled for breaks consistent with the Fair Labor Standards Act and ordinary wage laws.

Minimum Wage

On September 30, 2025, Florida’s minimum wage rate will rise to $14 per hour for nontipped employees and $10.98 per hour for tipped employees. Employers should monitor the U.S. Department of Labor’s recent updates to the minimum salary requirements for several overtime-exempt positions. While currently stayed pending litigation at the federal level, the DOL’s rule published on April 26, 2024 would require that,  to be exempt from overtime pay requirements, employees falling within the executive, administrative, and professional exemption must be paid a minimum of $58,656 per year, or $1,128 per week. The minimum annual compensation required for employees within the highly compensated employee exemption would also increase, up to $151,164 per year.

Workers’ Compensation

This year has also seen significant developments to the workers’ compensation structure. On January 1, 2025, the reimbursement rates for medical providers who treat patients receiving compensation benefits was markedly increased. The rationale in so doing was to incentivize healthcare providers to accept these cases, which, in turn, should expand the quality and access to care available to injured Floridians. In turn, recovery time and outcomes may improve. In addition, Florida law now requires that all employers with workers’ compensation coverage provide their employees who are injured on the job with all medically necessary treatment, care, and assistance throughout their recovery. This includes such ancillary costs as transportation, diagnostic tests and scans, and prescriptions, and can even extend to complications or related conditions.

Hospitality

Employers in the hospitality and lodging businesses should be aware of Chapter 2025-113. Among other things, this statute amends and streamlines the process that businesses may use to remove nonpaying guests from their establishments. According to the law, notice of intent to remove a guest for nonpayment must first be made in text, print, email, or similar communication or posting. The law also gives law enforcement the authority to arrest any nonpaying guest who remains despite such warning. Additionally, the statute now requires that restaurants explicitly notify and disclose any operational charges, automatic gratuities, or similar charges that they will require diners to pay. Finally, the law prohibits third-party websites and vendors from buying and selling restaurant reservations, unless working directly with a particular restaurant.

Restrictive Covenants

In addition, we’ve seen significant employer-friendly development with the legislature’s passage of the Contracts Honoring Opportunity, Investment, Confidentiality, and Economic Growth (CHOICE) Act. The law went into effect without the governor’s signature on July 3, 2025. The CHOICE Act creates two new forms of restrictive covenant agreements for businesses and employees, offering a four-year non-compete agreement with a notice requirement and minimum salary requirement in addition to a four-year garden leave non-compete agreement. The CHOICE Act is in addition to Florida’s existing restrictive covenant laws.

Ogletree Deakins’ Tampa and Miami offices will continue to monitor developments and will provide updates on the Florida, Hospitality, Unfair Competition and Trade Secrets, and Wage and Hour blogs as additional information becomes available.

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Quick Hits

• Starting January 1, 2026, employers in Minnesota must allow employees working six or more consecutive hours with a thirty-minute unpaid meal break and a fifteen-minute paid rest break.
• The Minnesota Earned Sick and Safe Time law has been amended to allow employers to set reasonable notice requirements for unforeseeable leave and to require documentation for leave taken for two consecutive workdays.

Senate File 17 / House File 15 (SF17 / HF15)

SF17 / HF15, or the Workforce, Labor, and Economic Development bill, introduces some notable employment law changes, some of which we previously discussed.

Meal and Rest Breaks

Minnesota meal and rest break statutes are currently vague, stating that employers must allow employees working eight or more hours with “sufficient time” to eat a meal and with “adequate time” to use a restroom every four hours. Starting January 1, 2026, employers must:

• allow each employee working six or more consecutive hours an unpaid meal break of at least thirty minutes; and
• allow each employee a paid rest break of at least fifteen minutes or enough time to utilize the nearest convenient restroom, whichever is longer, within each four consecutive hours.

The statute reduces from eight to six hours the working time to be eligible for a break and specifies that unpaid lunch breaks should be at least thirty minutes and paid rest breaks should be at least fifteen minutes, importing into the statute provisions of the Department of Labor and Industry (DOLI) regulations.

If an employer fails to provide said meal and rest breaks, the employer would be liable to the employee for the meal or rest break time that should have been provided at the employee’s regular rate of pay, plus an additional equal amount as liquidated damages. It remains unclear whether employers would be excused from the obligation to pay liquidated damages to employees who voluntarily choose not to take a meal or rest break, nor does the statute indicate how such a choice by the employee should be documented.

Employers may want to make sure their current meal and rest break policies are in compliance with these changes by the new year.

Expansion of Powers and Duties of the DOLI Commissioner

The special session also slightly modified the powers of the Minnesota DOLI commissioner, who can now not only bring a civil action against an employer in district court, but can, in addition “to any other remedy provided by law, … also apply … for an order enjoining and restraining violations of any statute or rule” from occurring.

Employer Unemployment Penalties

The special session also increased penalties for employers that misrepresent or make false statements to the state’s unemployment insurance program, which is administered by the Minnesota Department of Employment and Economic Development, to 100 percent instead of the current 50 percent of the amount of overpaid benefits to the applicant, the amount of benefits that the applicant would have been entitled to, or the amount of the special assessment. The penalties will become effective on or after October 1, 2025.

Changes to the ESST

The Minnesota Earned Sick and Safe Time law was also slightly modified. These amendments are effective on July 1, 2025, and January 1, 2026, as indicated below.

Notice

Currently, if the need for ESST leave is unforeseeable, employees are required to notify their employers “as soon as practicable.” This amendment is effective July 1, 2025. Employees will be required to give notice of the need for ESST as “reasonably required by the employer,” meaning employers will again be able to set their own reasonable notice requirements in emergency situations.

Documentation

Employers will be able to require reasonable documentation from employees of the need for ESST, when the employee uses leave for two consecutive scheduled workdays (a change from three consecutive scheduled workdays). This amendment is effective July 1, 2025.

Replacement Worker

Although employers still cannot require employees to find replacement workers during their use of ESST, the new addition to the law clarifies that employees will not be prohibited from “voluntarily seeking or trading shifts with a replacement worker to cover” the ESST hours as of July 1, 2025.

Frontloading

Most interestingly, SF17 / HF15 includes a paragraph stating that:

An employer is permitted to advance earned sick and safe time to an employee based on the number of hours the employee is anticipated to work for the remaining portion of an accrual year. If the advanced amount is less than the amount the employee would have accrued based on the actual hours worked, the employer must provide additional earned sick and safe time to make up the difference.

This amendment is effective January 1, 2026. On its face, the amendment suggests that employers may advance ESST hours based on an employee’s anticipated work hours in the remaining portion of the year, for example, when an employee is hired in the middle of the year. It is unclear if this paragraph could mean that frontloading of less than forty-eight hours of ESST would be allowed in situations where employees are not expected to accrue that amount in a year. It is also unclear what this would mean for the payout requirement when employees are frontloaded less than eighty hours. The amendment also does not address the potential recovery of over-advancements of ESST.

Ogletree Deakins’ Minneapolis office will continue to monitor developments and will post updates on the Leaves of Absence and Minnesota blogs as additional information becomes available.

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Quick Hits

• A new law in Texas imposes additional geographic and temporal limitations on noncompete agreements with healthcare practitioners in the state.
• The law extends the noncompete restrictions to dentists, nurses, and physician assistants.
• The law will take effect on September 1, 2025.

On June 20, 2025, Texas Governor Greg Abbott signed into law Senate Bill No. 1318, a measure that limits noncompete agreements with healthcare practitioners to one year and a five-mile radius from the location at which the healthcare practitioner primarily practiced.

While previousnoncompete restrictions applied only to physicians, the new law applies to dentists, nurses, and physician assistants. The terms and conditions of the noncompete agreement must be stated clearly and conspicuously in writing.

Buyout provisions, which permit physicians to pay to be released from noncompete agreements, are capped at the physician’s annual salary at the time of employment termination. This replaces the previous “reasonable price” standard and eliminates the option for arbitration to determine the buyout amount.

Under the law, if a physician’s employment is terminated without good cause (i.e., without a reasonable basis related to the physician’s conduct, job performance, or contract record), the noncompete becomes void.

Lawmakers in Colorado and Oregon recently approved similar legislation on noncompete agreements.

Next Steps

Employers in the healthcare industry in Texas may wish to review and update their noncompete agreements before the new law takes effect on September 1, 2025. Noncompete agreements with doctors, nurses, physician assistants, and dentists will be considered invalid if they go beyond one year or beyond a five-mile radius from the location at which the healthcare practitioner primarily practiced before the contract or employment terminated.

Employers may wish to clearly list the primary practice location in contracts to prevent disputes over the five-mile radius restriction and carefully document the reasons for terminating the employment of covered healthcare practitioners, indicating when a termination was for good cause.

Ogletree Deakins will continue to monitor developments and will provide updates on the Unfair Competition and Trade Secrets, Heathcare, and Texas blogs as new information becomes available.

Sandra R. White is senior counsel in Ogletree Deakins’ San Antonio office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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Quick Hits

• Oregon employers are required to provide employees with itemized wage statements on regular paydays that include details such as pay rates, hours worked, and deductions.
• Effective January 1, 2026, employers in Oregon must also provide written explanations of earnings and deductions to all employees at the time of hire.
• Civil penalties of up to $500 may be assessed for noncompliance with the written explanation requirement.

With respect to deductions, employers are prohibited from withholding or deducting wages unless:

• Required by law
• Voluntarily authorized in writing by the employee for the employee’s benefit
• Authorized by a collective bargaining agreement or specific statutes
• Made upon termination of employment for repayment of a loan under strict conditions

Employers may be assessed penalties of up to $1,000 for violations of certain wage statutes, including unlawful deductions.

Effective January 1, 2026, Senate Bill 906 will require employers in Oregon to provide employees at the time of hire a written explanation of earnings and deductions on itemized statements with general information on:

(A) “The employer’s established regular pay period.

(B) A comprehensive list of:

1. All types of pay rates that employees may be eligible for, including hourly pay, salary pay, shift differentials, piece-rate pay and commission-based pay.
2. All benefit deductions and contributions.
3. Every type of deduction that may apply.

(C) The purpose of deductions that may be made during a regular pay period.

(D) Allowances, if any, claimed as part of minimum wage.

(E) Employer-provided benefits that may appear on the itemized statements as contributions or deductions.

(F) All payroll codes used for pay rates and deductions, along with a detailed description or definition of each code.”

The law applies to all employers in Oregon except the federal government and its agencies. Employers may satisfy the requirement of providing this written explanation by making the information available to employees in a location easily accessible to them, such as on a website, a physical document in a central location, a shared electronic file, or delivery by electronic mail. The information in the written explanation must be “sufficiently detailed to explain pay rates and deduction codes, but need not be written in complete sentences.” Employers must update and review the required information by January 1 of each year. The Oregon Bureau of Labor and Industries (BOLI) will develop and make available a model written guidance document that employers may use and customize to satisfy the written explanation requirements detailed above. The law authorizes the BOLI to assess civil penalties for violations up to $500.

Next Steps

Employers may want to review and update payroll practices to ensure compliance with the new transparency requirements by January 1, 2026. Employers may also want to monitor developments from the Oregon Bureau of Labor and Industries for additional guidance.

Ogletree Deakins’ Portland (OR) office will continue to monitor developments and will post updates on the Oregon and Wage and Hour blogs as additional information becomes available.

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Quick Hits

• Effective July 1, 2025, Chicago’s minimum wage has increased.
• Effective July 1, 2025, the compensation thresholds under the Fair Workweek Ordinance have increased.
• Effective July 1, 2025, medium-sized employers are required to pay out unused, accrued paid leave to separated employees under the Paid Sick and Safe Leave Ordinance.
• A private right of action is available to covered employees when their employers violate the paid leave provisions of the Paid Leave and Paid Sick and Safe Leave Ordinance. (A private right of action previously existed for violations of the Paid Sick Leave provisions.)

Minimum Wage Ordinance

Under the Minimum Wage Ordinance, covered employees must be paid no less than the city’s established minimum wage. Effective July 1, 2025:

• The minimum wage for employees of standard employers (four or more employees) has increased from $16.20 to $16.60 per hour, a 2.5 percent increase.
• The tipped minimum wage for standard employers has increased from $11.02 to $12.62 per hour.

Chicago is continuing its five-year phaseout of the tipped wage credit. This means the gap between the tipped and standard minimum wage will gradually close. The July 1 increase reflects the second phase, where the tipped wage credit is reduced to 24 percent of the Chicago minimum wage. By 2028, tipped workers in Chicago are expected to earn the full Chicago minimum wage, regardless of tips received.

Fair Workweek Ordinance

The Fair Workweek Ordinance requires certain employers in covered industries to provide workers with predictable work schedules and compensation for changes that do not meet its notice requirements. The seven covered industries include building services, healthcare, hotels, manufacturing, restaurants, retail, and warehouse services.

Employers are covered by the Fair Workweek Ordinance if they are in a covered industry and employ 100 or more workers globally (250 employees and 30 locations for a restaurant), and at least 50 of those workers are “covered employees.” Previously, employees were covered if they spent the majority of their time at work for the employer while physically present within the city and earned less than or equal to $61,149.35 per year in salary or $31.85 per hour. Effective July 1, those minimum compensation thresholds have increased to $62,561.90 per year in salary or $32.60 per hour.

Paid Leave and Paid Sick and Safe Leave Ordinance

Two important changes to the Paid Leave and Paid Sick and Safe Leave Ordinance took effect on July 1, 2025.

Medium-sized employers (any employer that employs between 51 and 100 covered employees) are required to pay the monetary equivalent, at the employee’s final rate of pay, of all unused, accrued paid leave as part of that employee’s final compensation. Previously, only large employers (any employer that employs more than 100 covered employees) were required to pay unused, accrued paid leave as part of an employee’s final compensation. Small employers (any employer with 50 or fewer covered employees) still need not pay unused, accrued paid leave upon separation.

Effective July 1, a private right of action has become available to covered employees when their paid leave is lost or denied because of their employer’s violation of the ordinance. Employees can sue in civil court and recover damages equal to three times the value of the paid leave that was lost or denied, interest on that amount, as well as costs and reasonable attorneys’ fees. There is a 16-day cure provision in effect from July 1, 2025, through June 30, 2026, which grants an employer up to 16 days from the date of an alleged violation to correct the violation before a civil action may be brought. Importantly, the cure provision is defined as the time between the alleged violation and either (1) the next pay period or (2) 16 days after the violation, whichever is less. This provision will sunset automatically as of July 1, 2026.

Ogletree Deakins’ Chicago office will continue to monitor developments and will provide updates on the Healthcare, Hospitality, Illinois, Leaves of Absence, Retail, Trucking & Logistics, and Wage and Hour blogs as additional information becomes available.

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Quick Hits

• A Seventh Circuit opinion warns employers against strictly relying on health care provider certifications for FMLA leave when they possess additional information about an employee’s health condition.
• Employees who fail to comply with paid leave substitution policies are still entitled to unpaid FMLA leave.
• Employers may want to review their paid leave substitution policies to ensure compliance with FMLA regulations and avoid potential legal issues.

Background

In Davis v. Illinois Department of Human Services, a pregnant employee had missed a number of days due to morning sickness. After being notified of her right to FMLA, she subsequently submitted an FMLA certification from her health care provider stating that she required leave to attend regular medical appointments until the child’s birth, and then six weeks or more for recuperation after the birth. The doctor responded “no” to the question “Will the condition cause episodic flare-ups periodically preventing the employee from performing his/her job functions.”

The employer approved the employee for intermittent leave for appointments and continuous post-birth leave. But because the certification did not address leave for morning sickness, the employee’s absences for that reason were deemed unauthorized. The employer determined that one of the absences was also unauthorized because the employee had failed to comply with company policy regarding the substitution of paid leave for FMLA leave. Based on the unauthorized absences, the employee was dismissed. She then sued, alleging violations of her FMLA rights.

FMLA and Pregnancy

The FMLA provides employees with up to twelve workweeks of leave during any twelve-month period for a serious health condition, including any period of incapacity due to pregnancy or prenatal care. This specifically includes absences arising from pregnancy-related illnesses, such as severe morning sickness.

The employer is entitled to a medical certification from the employee’s health care provider to justify the need for FMLA leave—including intermittent leave for morning sickness. The certification must be “complete and sufficient,” and if it is not, the employer must inform the employee of what additional information is required and provide the employee with seven days in which to correct any deficiency.

Under the FMLA regulations, 29 C.F.R. §§ 825.302(d) and 825.303(c), if an employee is approved to take FMLA leave on an intermittent basis, the employee may still be required to comply with the employer’s “usual and customary notice and procedural requirements” for requesting time off. In the present case, the employer mandated that employees on FMLA leave comply with its standard “call-off procedures,” which required employees to call in at least one hour prior to a missed shift or to notify the appropriate supervisor when leaving early.

Reliance on the Certification?

In the present case, the employer argued that, based on the health care provider’s certification, which stated that there was no need for leave for flare-ups, the employee was not entitled to leave for morning sickness. Although the federal district court found that the employer was entitled to rely on the certification, the Seventh Circuit disagreed.

The Seventh Circuit first noted that morning sickness should not be considered a “flare-up” when it is specifically covered by the FMLA. It next confirmed that, generally, an employer may require a medical certification to support a request for leave, including for morning sickness. Here, however, the employer was well aware of the employee’s need for intermittent leave for morning sickness when it approved her FMLA request—in fact, her bouts of morning sickness were the reason the employer notified her about her FMLA leave rights in the first place. The Seventh Circuit stated, “In such cases, we have recognized that an employee’s entitlement to FMLA leave is not strictly bound by the precise parameters laid out in the medical certification.” Accordingly, the Seventh Circuit determined that a reasonable jury could find that the employer knew the employee needed intermittent leave for morning sickness at the time it approved her FMLA leave.

The Seventh Circuit further found that, given its knowledge of the employee’s morning sickness, the employer knew that the certification was incomplete. Accordingly, the court reasoned, the employer “should have provided [the employee] with an opportunity to supplement [the certification]” but failed to do so.

FMLA and Use of Paid Leave

While FMLA leave is unpaid, an employer may require the employee to substitute accrued paid leave, such as vacation, sick leave, or other paid time off (PTO), running concurrently with the unpaid FMLA leave. In that regard, 29 C.F.R. § 825.207(a) of the FMLA regulations provides that, “the employer must inform the employee that the employee must satisfy any procedural requirements of the paid leave policy only in connection with the receipt of such payment.”

Another section of the regulations, 29 C.F.R. § 825.300(c)(iii), further requires employers to notify employees of their “entitlement to take unpaid FMLA leave if the employee does not meet the conditions of paid leave.” The FMLA regulations specifically provide that employees who fail to comply with the employer’s paid leave substitution policy will not receive any pay, but are still entitled to take unpaid FMLA leave.

The employer in the current case had implemented a paid leave substitution policy. Under the policy, employees were supposed to know how much paid leave they had accrued and to request the accrued leave to cover their FMLA absence. The policy provided that if employees did not have the requested accrued paid leave to cover the absence, the absence would remain unauthorized, regardless of whether it was related to FMLA, and subject to disciplinary action. In addition, employees who had accrued paid leave available but repeatedly requested unpaid FMLA would also be subject to disciplinary action.

The employer argued that, even if the employee was entitled to FMLA for morning sickness, she failed to comply with its policy governing the substitution of paid leave for FMLA leave, since she had requested more paid leave than she had actually accrued. Therefore, it was entitled to characterize her absence as “unauthorized” on these grounds, providing an alternative basis for termination of employment. The district court agreed, noting that the FMLA allows employers to require employees to follow the “usual and customary notice and procedural requirements for requesting leave.”

Again, the Seventh Circuit disagreed. It found that the requirement to comply with notice and procedural requirements is specific to requesting leave, which is distinguished from the requirements related to the substitution of paid leave. And while failure to comply with the first may result in the delay or denial of FMLA leave, the failure to comply with the second only results in the denial of pay for the FMLA leave—the regulations expressly provide that the employee is still entitled to unpaid FMLA leave. Thus, nothing in the FMLA regulations allows the employer to discipline an employee for failing to comply with the employer’s paid leave substitution policy, especially where, as here, the FMLA leave has been approved.

Lessons for Employers

This case highlights several important considerations for employers. First, at least in the Seventh Circuit (which covers Illinois, Indiana, and Wisconsin), it may not be wise for employers to rely strictly on a health care provider certification to deny FMLA coverage when the employer is in possession of additional information that casts doubt on the accuracy of the certification. Under those circumstances, employers may wish to consider informing the employee that the certification is not complete and that the health care provider should address the missing information.

Second, employers may want to refrain from disciplining employees for failing to comply with paid leave substitution policies—at most, employees may be denied the use of paid leave, but must still be provided with unpaid FMLA leave. Thus, employers may want to review their paid leave substitution policies to ensure that there are no disciplinary consequences for failure to comply with the policy requirements.

Ogletree Deakins’ Leaves of Absence/Reasonable Accommodation Practice Group will continue to monitor developments and will provide updates on the Leaves of Absence and State Developments blogs as additional information becomes available.

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Quick Hits

• The California Civil Rights Council has received final approval for comprehensive regulations governing the use of AI and “automated-decision systems” in employment, aimed at preventing discrimination.
• These regulations clarify that employers must not use “automated-decision systems” that discriminate against applicants or employees based on protected characteristics under California antidiscrimination laws.
• California joins other states in implementing AI regulations for employment decisions while continuing to explore additional legislation to manage the impact of emerging technologies in the workplace.
• California’s new regulations are set to go into effect on October 1, 2025.

On June 27, 2025, the California Office of Administrative Law submitted a notice of approval on the latest modified text of the proposed regulations, which the California Civil Rights Department (CRD) advanced in March 2025. The Civil Rights Council, which is a branch of the CRD, has been considering the regulations for multiple years, going back to at least 2022. The Civil Rights Council said the final language was based on input from nonprofits, businesses, and others in more than forty public comment letters.

The final regulations clarify that it is unlawful for an employer to use an “automated-decision system” or selection criteria that discriminate against applicants or employees on a basis protected by the California Fair Employment and Housing Act (FEHA) and other California antidiscrimination laws.

Rationale

In a statement on the approval, the Civil Rights Council noted that “automated-decision systems” that rely on algorithms or AI “are increasingly used in employment settings to facilitate a wide range of decisions related to job applicants or employees, including concerning recruitment, hiring, and promotion.” While these technologies may have “myriad benefits, they can also exacerbate existing biases and contribute to discriminatory outcomes,” the Civil Rights Council stated. 

“These new regulations on artificial intelligence in the workplace aim to help our state’s antidiscrimination protections keep pace,” CRD Director Kevin Kish said in a statement. “I applaud the Civil Rights Council for their commitment to protecting the rights of all Californians.”

Key Terms

The final regulations amend existing regulations to define key terms related to AI:

• “automated-decision system[s]” are defined as any “computational process that makes a decision or facilitates human decision making regarding an employment benefit,” including processes that “may be derived from and/or use artificial intelligence, machine-learning, algorithms, statistics, and/or other data processing techniques.”

• “agent”—The final regulations consider employers’ agents to be “employers” under FEHA regulations. Specifically, the regulations define “agent” as “any person acting on behalf of an employer, directly or indirectly, to exercise a function traditionally exercised by the employer or any other FEHA-regulated activity … including when such activities and decisions are conducted in whole or in part through the use of an automated decision system.” (Emphasis added.)
• “automated-decision system data”—The regulations cover “[a]ny data used to develop or customize an automated-decision system for use by a particular employer or other covered entity.”
• “artificial intelligence”—The regulations define AI as “[a] machine-based system that infers, from the input it receives, how to generate outputs,” which can include “predictions, content, recommendations, or decisions.”
• “machine learning”—The term is defined as the “ability for a computer to use and learn from its analysis of data or experience and apply this learning automatically in future calculations or tasks.”

Unlawful Selection Criteria

The regulations further clarify that California laws prohibiting discriminatory hiring tools apply to automated-decisions systems or AI tools. The regulations state that it is “unlawful for an employer or other covered entity to use an automated-decision system or selection criteria (including a qualification standard, employment test, or proxy) that discriminates against an applicant or employee or a class of applicants or employees on a basis protected” by FEHA.

Next Steps

With the regulations, California joins a growing number of states and jurisdictions, including Colorado, Illinois, and New York City, in enacting laws or regulations concerning AI and similar technologies, including their use to make employment-related decisions. At the same time, California continues to mull overlapping pieces of legislation and proposed regulations to manage AI. Notably, a bill called the “No Robo Bosses Act” would require employers to provide human oversight over the use of AI.

The state laws come as President Donald Trump’s administration has sought to remove legal restrictions on AI to promote technology development in the United States. The administration’s spending bill included a ten-year moratorium prohibiting states from enacting or enforcing laws and regulations concerning AI. However, lawmakers in the U.S. Senate modified that proposal, and it was ultimately dropped from the bill as passed by the Senate.

The new California regulations are set to go into effect on October 1, 2025. Employers in California may want to review the new regulations and consider how they impact their operations and employment decision-making policies and practices, including recruitment, hiring, promotions, and disciplinary decisions.

Ogletree Deakins’ Technology Practice Group will continue to monitor developments and will provide updates on the California, Employment Law, and Technology blogs as additional information becomes available.

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Quick Hits

• OFCCP is seeking comments on changes to the complaint form for employment discrimination by federal contractors and subcontractors.
• The proposed changes are requested to update the complaint form to comport with changes brought by Executive Order 14173.

OFCCP is seeking approval to revise the Complaint of Employment Discrimination Involving a Federal Contractor or Subcontractor form (CC-4) and the Pre-Complaint Inquiry for Employment Discrimination Involving a Federal Contractor or Subcontractor form (CC-390) to remove items related to Executive Order (EO) 11246. Because of EO 14173, applicants and employees of federal contractors and subcontractors, authorized representatives, or third parties may file complaints of employment discrimination with OFCCP pursuant to Section 503 of the Rehabilitation Act of 1973 or the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA) but may no longer file complaints with OFCCP pursuant to EO 11246. OFCCP contends the revisions are necessary to align with the current regulatory framework and to fulfill OFCCP’s responsibilities under Section 503 and VEVRAA.

These proposed changes are on the heels of OFCCP’s announcement that the DOL Secretary’s Order 08-2025 directed it to continue processing previously filed and new Section 503 and VEVRAA complaints and the agency’s publication of proposed changes to the regulatory schemes of Section 503 and VEVRAA, as well as OFCCP’s rescinding of the implementing regulations under EO 11246.

Next Steps

The proposed regulations are set to be published in the Federal Register on July 7, 2025. The DOL will receive comments on the proposed changes until September 5, 2025, or sixty days after publication. In the meantime, the current complaint forms remain in effect.

Employers may want to review how the proposed information collection request could impact them and consider filing comments before the deadline.

For more information, please join us for our upcoming webinar, “The Latest OFCCP News: Proposed Rule Changes as Potential Agency Exit Looms,” which will take place on Wednesday, July 9, 2025, from 2:00 p.m. to 3:00 p.m. EDT. The speakers, Lauren B. Hicks, T. Scott Kelly, and Christopher J. Near, will review the latest changes and what they mean for covered contractors, as well as best practices for continued compliance efforts under EO 14173, Section 503, and VEVRAA. Register here.

Ogletree Deakins’ Government Contracting Compliance and Reporting Practice Group and Workforce Analytics and Compliance Practice Group will continue to monitor developments and will provide updates on the Diversity, Equity, and Inclusion Compliance, Government Contracting and Reporting, Government Contractors, and Workforce Analytics and Compliance blogs as additional information becomes available.

This article and more information on how the Trump administration’s actions impact employers can be found on Ogletree Deakins’ New Administration Resource Hub.

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Quick Hits

• June 26, 2025, marked the tenth anniversary of the Supreme Court’s decision recognizing same-sex marriage nationwide.
• The Obergefell v. Hodges decision had important legal implications for employers’ benefit plans.
• Existing federal law bans discrimination in hiring and firing on the basis of gender identity and sexual orientation, while twenty-two states and Washington, D.C., also have laws banning workplace discrimination and harassment based on sexual orientation or gender identity.

Ten years ago, the Supreme Court decided in Obergefell v. Hodges to give all same-sex couples in the United States the right to marry. The case arose from challenges to Michigan, Kentucky, Ohio, and Tennessee laws that banned same-sex marriages and refused to recognize legally valid same-sex marriages performed in other states.

The Court answered two questions. First, does the U.S. Constitution’s Fourteenth Amendment require states to license a marriage between two people of the same sex? Second, does the Constitution require a state to recognize a marriage between two people of the same sex when their marriage was licensed lawfully in a different state?

On June 26, 2015, the Court decided yes to both questions. It held that the right to marry is a “fundamental right” and inherent to an individual’s personal liberty, thus requiring states to give full faith and credit to same-sex marriages performed in other states and countries.

The result was that same-sex couples living in states that had prohibited same-sex marriage were able to get married in their states. This had implications for employers’ health plans, retirement plans, and leaves of absence policies, among other rights. For example, employees could add their same-sex spouses as dependents under their employers’ health plans, list their same-sex spouses as automatic beneficiaries in 401(k) plans, and take time off under the Family and Medical Leave Act (FMLA) to care for the serious illness of their same-sex spouses. Employees also could add their same-sex spouses’ children as dependents under employers’ health plans.

Federal law bestows many rights on married couples, such as filing taxes jointly, having joint parental rights, joint adoption and foster care, receiving an inheritance without paying estate taxes after the death of a spouse, visiting a spouse in a hospital, and being recognized as next-of-kin for medical decision-making.  

Immediately following the Obergefell decision, legions of same-sex couples flocked to courthouses and other locations to get married. In the 10 years since the decision, the percentage of Americans supporting same-sex marriages has increased substantially. Sixty-nine percent of Americans supported same-sex marriage in 2024, up from 42 percent in 2004, according to a recent national poll of more than 1,000 adults.

Some same-sex couples felt more inclined to adopt a child or undergo fertility treatments after they knew their marriages would be recognized nationwide. The Respect for Marriage Act, enacted in 2022, requires the federal government and all states to recognize the marriages of same-sex and interracial couples performed validly in any state.

In 2020, the Supreme Court ruled in Bostock v. Clayton County that employers may not lawfully fire or refuse to hire employees for being “homosexual” or transgender because discrimination on the basis of gender identity and sexual orientation is inherently discrimination because of sex, violating Title VII of the Civil Rights Act. Twenty-two states and Washington, D.C., have laws prohibiting workplace discrimination and harassment based on a person’s sexual orientation or gender identity.  Additional states and locales prohibit discrimination on the basis of gender expression, further building on Supreme Court authority in Price Waterhouse v. Hopkins prohibiting gender stereotyping as sex discrimination under Title VII.

Despite existing federal and state law, on January 20, 2025, President Donald Trump released Executive Order (EO) 14168, “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,” which established the new federal government policy recognizing only two binary and immutable genders: male and female. On January 28, 2025, the U.S. Equal Employment Opportunity Commission’s Acting Chair Andrea R. Lucas rolled back much of the Biden-era technical assistance that barred workplace harassment and discrimination against LGBTQ+ individuals. However, Acting Chair Lucas also acknowledged in her confirmation hearing that Bostock remains the law of the land, which is especially crucial to understand, given EO 14168 cannot change existing federal law.

Next Steps

Obergefell and Bostock remain good law and offer ongoing protections for LGBTQ+ employees. Employers can expect to continue covering biological children, adopted children, and stepchildren of same-sex couples in their health plans.

The FMLA and some state laws require employers to provide job-protected, unpaid leave for employees to care for a seriously ill spouse, regardless of sexual orientation. Employers can voluntarily include same-sex spouses and domestic partners in their policies regarding bereavement leave and paid leave to care for a family member.

Ogletree Deakins will continue to monitor developments and will provide updates on the Diversity, Equity and Inclusion Compliance, Employee Benefits and Executive Compensation, and Employment Law blogs as new information becomes available. This article and more information on how the Trump administration’s actions impact employers can be found on Ogletree Deakins’ New Administration Resource Hub.

Stay tuned for our upcoming two-part webinar series on the evolving nature of LGBTQ+ rights in the workplace and beyond.

Nonnie L. Shivers is a shareholder in Ogletree Deakins’ Phoenix office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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