Quick Hits

• Companies in Mexico must file their tax returns by March 31 of each year.
• Annual corporate tax returns show the yearly financial results of any entity and whether there were gains or losses. Tax returns are the starting point for the obligations mandated by the FLL regarding profit sharing.

General Content and Rules for the Annual Tax Return

In the annual tax return, taxpayers file a report of their income, deductions, withholdings, and tax payments during the tax year—which in Mexico runs from January 1 to December 31. March 31, 2025, is the last day to file the financial report for the 2024 tax year. A failure to timely file the annual tax report may result in SAT fines ranging from MEX $1,800 to $35,000 (USD $88.02 to $1,711.52), as well as fines and/or sanctions that may arise from the FLL.

Annual Tax Return’s Relevance for Profit-Sharing Obligations

Employees need to be notified of the filing of the annual tax return with the SAT, and once the employees are notified, a joint commission consisting of an equal number of representatives for the employees and the company is required to analyze the tax return, define whether profits have been generated, make the necessary calculations, determine the 10 percent of the profits (if any) to be distributed among the employees (with some exceptions), and/or determine if some caps apply for the distribution.

The final PTU amount must be paid to the employees, at the latest, on May 30, 2025.

Regardless of whether profits are generated during the tax year, the FLL requires employees to be notified about the filing of the yearly tax return.

Failure to comply with profit-sharing requirements—starting with properly filing the tax return—could result in fines between MEX $28,285 to $565,700 (USD $1,382.04 to $27,640.76) from the Ministry of Labor and Social Welfare (Secretaría del Trabajo y Previsión Social (STPS)). Note that fines may be imposed per each affected employee, depending on the Labor Ministry’s consideration.

Ogletree Deakins’ Mexico City office will continue to monitor developments and will provide updates on the Cross-Border and Wage and Hour blogs as additional information becomes available.

Pietro Straulino-Rodríguez is the managing partner of the Mexico City office of Ogletree Deakins.

Natalia Merino Moreno is an associate in the Mexico City office of Ogletree Deakins.

María José Bladinieres Ruiz is a law clerk in the Mexico City office of Ogletree Deakins.

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Quick Hits

• The 2025 session of the North Carolina General Assembly is considering employment-related bills related to union organizing and collective bargaining, nondiscrimination in the workplace, noncompete and nonpoaching agreements, and DEI.
• Senate Bill 120 / House Bill 207 aim to prohibit employers from restricting labor organizations and requiring employees to refrain from union membership as a condition of employment.
• Senate Bill 154 / House Bill 168 seek to prevent hair-based discrimination in workplaces, schools, and public spaces by expanding the definition of race-based discrimination to include traits historically associated with race, such as natural hairstyles.
• House Bill 269 would ban noncompete and nonpoaching agreements for employees earning less than $75,000 a year, effective July 1, 2025.

Remove Barriers to Labor Organizing (Senate Bill 120 and House Bill 207)

Senate Bill (SB) 120 and House Bill (HB) 207, short-titled, “Remove Barriers to Labor Organizing,” was referred to the North Carolina House of Representatives’ Rules, Calendar, and Operations of the House Committee and the North Carolina Senate’s Rules and Operations of the Senate Committee in late February. The legislation would prohibit employers from restricting labor organizations and associations from organizing within the state. This prohibition would restrict employers from requiring employees to refrain from union membership as a condition of employment or continued employment.

North Carolina CROWN Act (Senate Bill 154 and House Bill 168)

The North Carolina CROWN Act legislationwas reintroduced this session and echoes the bipartisan federal “Creating a Respectful and Open World for Natural Hair Act,” or “CROWN Act,” bill introduced in February 2025 by Senators Cory Booker (D-NJ) and Susan Collins (R-ME). The North Carolina CROWN Actwould protect individuals in the state from hair-based discrimination and retaliation in workplaces, schools, and public spaces. That includes preventing employers from enacting or enforcing policies on hair and grooming that would disproportionately affect people with “natural” or “cultural” hairstyles, including Bantu knots, braids, locks, and twists. It would also expand the definition of race-based discrimination to include “traits historically associated with race, including but not limited to, hair texture, hair type, and protective styles.” More than half of the states have enacted CROWN Act bills.

Equality in State Agencies/Prohibition on DEI (House Bill 171)

HB 171, short-titled, “Equality in State Agencies/Prohibition on DEI,” would apply to state employers and would prohibit any state agency from “promoting, supporting, funding, implementing, or maintaining workplace DEI programs, policies, or initiatives,” including in state government hiring and employment. The bill would eliminate all dedicated diversity, equity, and inclusion (DEI) staff positions and offices and end all DEI-related training. It would also prohibit any state agency or unit of local government from using public funds for DEI initiatives, including federal funds. All state agencies and local governmental units would be required to create annual public posts detailing their compliance. Further, the bill would make it a crime to act in any way deemed contrary to promote or support DEI in state and local government.

Workforce Freedom and Protection Act (House Bill 269)

HB 269, named the “Workforce Freedom and Protection Act,” was introduced in the House in March and would prohibit noncompete and nonpoaching agreements in the state. The prohibition against noncompete agreements would apply to employees making less than $75,000 a year and would disallow any agreements restricting the employee’s right to work for another employer for any period of time, work in a specific geographic area, or from engaging in work activities performed for the employer. These restrictions would be in effect as of July 1, 2025, and would ban employers from entering into noncompete agreements as of that date. The bill would also prohibit “non-poaching” agreements, which are agreements between employers that restricts one employer from soliciting, recruiting, or hiring employees from the other employer, or in any way prevents companies from competing against each other for employees.

Allow Public Employee Collective Bargaining (House Bill 256)

HB 256, introduced in the House in February, is the second bill introduced in this session to encourage union activity and collective bargaining. Currently, public employees are prohibited from collective bargaining, but this bill would repeal that law, paving the way for North Carolina government employees to engage in union activity.

Reduce Barriers to State Employment (Senate Bill 124 and House Bill 177)

Another pair of bills, SB 124 and HB 177, specifically directed at state employers, seeks to make state employment opportunities more accessible to individuals without four-year college degrees. Titled “An Act to Reduce Barriers to State Employment,” the legislation would direct the North Carolina State Human Resources Commission to assess the educational and experiential requirements for state positions and identify certain positions to remove the four-year college degree requirement, leaning toward other requirements including military service, apprenticeships, and trade schools where appropriate.

Ogletree Deakins’ Charlotte and Raleigh offices will continue to monitor developments and will provide updates on the Employment Law, North Carolina, and Unfair Competition and Trade Secrets blogs as additional information becomes available.

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Quick Hits

• On February 21, 2025, a federal judge granted a nationwide preliminary injunction that enjoined key provisions of President Trump’s executive orders aimed at “illegal” DEI initiatives.
• On March 3, 2025, the judge refused to halt the preliminary injunction, pending the government’s appeal to the Fourth Circuit Court of Appeals.
• On March 10, 2025, the judge clarified that the preliminary injunction applies to all federal executive branch agencies, departments, and commissions, not just those that were specifically named in the complaint.

U.S. District Judge Adam B. Abelson clarified that the nationwide preliminary injunction enjoining the termination, certification, and enforcement provisions of EO 14151 and EO 14173 “applies to and binds Defendants other than the President, as well as all other federal executive branch agencies, departments, and commissions, and their heads, officers, agents, and subdivisions directed pursuant to” those executive orders.

The court’s February 21, 2025, preliminary injunction order defined the “Enjoined Parties” as “Defendants other than the President, and other persons who are in active concert or participation with Defendants.” The plaintiffs filed a motion to clarify the scope of the order. The government argued that the court lacked jurisdiction to rule on the motion, and that only the specific departments, agencies, and commissions named as additional defendants in the complaint were bound by the preliminary injunction. The complaint named the following defendants: the Office of Management and Budget, the U.S. Departments of Justice, Health and Human Services, Education, Labor, Interior, Commerce, Agriculture, Energy, and Transportation, along with the heads of those agencies (in their official capacities), the National Science Foundation, and President Trump in his official capacity. The government argued that including other departments, agencies, and commissions as enjoined parties would be inconsistent with Federal Rule of Civil Procedure 65(d), Article III of the U.S. Constitution’s standing requirement, and traditional principles of equity and preliminary injunctive relief.

The court disagreed. First, according to the court, the plaintiffs have shown a likelihood of success on the merits that the termination, certification, and enforcement provisions are unconstitutional, so any agencies acting pursuant to those provisions “would be acting pursuant to an order that Plaintiffs have shown a strong likelihood of success in establishing is unconstitutional on its face.”

Second, the termination and certification provisions were directed to all agencies, the enforcement provision was directed to the U.S. Department of Justice, and the president was named as a defendant in the complaint; thus, the preliminary injunction (in both its original and clarified forms) “is tailored to the executive branch agencies, departments and commissions that were directed, and have acted or may act, pursuant to the President’s directives in the Challenged Provisions of” EO 14151 and EO 14173.

Third, only enjoining those agencies that were specifically named in the complaint, despite the fact that the president was named as a defendant, would provide incomplete relief to the plaintiffs because their speech is at risk of being chilled by non-named agencies as well. In addition, the court held that “[a]rtificially limiting the preliminary injunction in the way Defendants propose also would make the termination status of a federal grant, or the requirement to certify compliance by a federal contractor, turn on which federal executive agency the grantee or contractor relies on for current or future federal funding—even though the agencies would be acting pursuant to the exact same Challenged Provisions,” resulting in “‘inequitable treatment.’” Thus, the court granted the plaintiffs’ motion to clarify that the preliminary injunction applies to every agency in the executive branch.

Ogletree Deakins will continue to monitor developments and will provide updates on the Diversity, Equity, and Inclusion Compliance, Employment Law, Government Contracting and Reporting, and Governmental Affairs blogs.

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Quick Hits

• New York lawmakers passed a health information privacy bill that, among other obligations, would require entities to obtain authorization to collect, use, or sell an individual’s health information unless it is “strictly necessary” for certain purposes.
• The bill broadly defines regulated health information to include data that goes beyond traditional protected health information (PHI) and broadly defines regulated entities to include New York entities and certain non-New York entities.
• While there is no private right of action, the bill would empower the state attorney general to seek significant penalties for violations.
• The governor must still sign the bill and it would take effect one year after becoming law.

On January 22, 2025, the New York State Legislature passed Senate Bill (S) 929, known as the New York Health Information Privacy Act (New York HIPA). The bill has not yet been sent to Governor Kathy Hochul’s desk for signature. If signed, New York HIPA would take effect one year after becoming law.

In general, New York HIPA would place strict requirements on the collection or “processing” of individual health information or “any information that is reasonably linkable” to an individual’s mental or physical health. It would require authorization to process regulated health information unless it is “strictly necessary” for a specific designated purpose. The bill would further give individuals a right to access and request deletion of their health information and require regulated entities to develop and maintain safeguards to protect health data.

New York HIPA is the latest of a series of state privacy laws being considered and passed in recent years, such as Washington State’s recently enacted My Health My Data Act (MHMDA), which imposes a host of requirements for businesses in Washington concerning the collection of “consumer health data.” That law is at the center of a recently filed and potentially precedent-setting class action alleging that advertising software attached to third-party mobile phone apps unlawfully harvested PHI in the form of location data from millions of users. Unlike Washington’s MHMDA, New York HIPA would not provide a private right of action for individuals to file suit, but New York HIPA would empower the attorney general to enforce the law and allow for the imposition of stiff monetary penalties for violations.

Here is a breakdown of some key New York HIPA bill provisions.

Processing Regulated Health Information

New York HIPA, if enacted, would make it generally unlawful for a regulated entity to sell an individual’s regulated health information to a third party or process such information without a valid authorization unless it is “strictly necessary” for specific purposes. The bill details the requirements for obtaining valid authorization and the permissible purposes for processing without authorization. New York HIPA broadly defines “processing” to include the collection, use, access, sharing, sale, monetization, analysis, and retention, among other actions, of an individual’s regulated health information.

Notably, New York HIPA defines “regulated health information” broadly as “any information reasonably linkable” to an individual or device that “is collected or processed in connection with an individual’s physical or mental health,” including “location or payment information that relates to an individual’s physical or mental health” or “any inference drawn or derived about an individual’s physical or mental health.” This expansive definition could include a wide range of data points or information about individuals that might not typically be considered PHI, such as location data and payment information related to trips to the doctor or the gym.

New York HIPA also includes a broad definition of regulated entities. A “regulated entity” would include both entities located in New York that control the processing of regulated health information, and non-New York entities that control the processing of regulated health information of New York residents or individuals who are “physically present in New York.”

Designated Purposes

New York HIPA also sets forth the designated purposes for collecting or processing an individual’s health information without specific authorization. The collection or processing would need to be “strictly necessary” for:

1. providing a product or service that the individual has requested;
2. conducting internal business operations, excluding marketing, advertising, research and development, or providing products or services to third parties;
3. protecting against fraud or illegal activity;
4. detecting and responding to security threats;
5. protecting the individual’s “vital interests”; or
6. investigating or defending a legal claim.

Requests for Authorization

Under the bill, an authorization request must be separate from any other transaction, and individuals must be allowed to withhold authorization separately for each kind of processing. A “valid authorization” must also include several specific disclosures, including “the nature of the processing activity” and “the specific purposes for such processing.”

Individual Rights

New York HIPA would further require regulated entities to provide an “easy-to-use mechanism” for individuals to request access to and delete their regulated health information. Regulated entities would be required to provide access to or delete health data within thirty days of a request. If using a service provider, regulated entities would be required to communicate the request to a service provider within thirty days “[u]nless it proves impossible or involves disproportionate effort.”

Exemptions

The bill exempts certain information from its provisions, including:

• “information processed by local, state, and federal governments, and municipal corporations”;
• PHI governed by federal regulations under the Health Insurance Portability and Accountability Act (HIPAA);
• covered entities governed by HIPAA; and
• certain information collected as part of clinical trials.

Notably, the bill does not exempt entities subject to the Gramm-Leach-Bliley Act. Further, the bill does not exempt “business associates” under HIPAA with respect to “regulated health information” that goes beyond traditional PHI.

Security Safeguards

Under New York HIPA, regulated entities would be required to develop and maintain reasonable safeguards to protect the security, confidentiality, and integrity of regulated health information. They would also be required to securely dispose of such information according to a publicly available retention schedule.

The bill does not address the obligations of a regulated entity in the event of a data breach. New York’s data breach notification law (General Business Law § 899-aa), however, was recently amended to expand the definition of “private information” to include medical information and health insurance information, and to impose a thirty-day deadline for businesses to notify New York residents impacted by a data breach.

Service Providers

The bill would require any processing of health information by service providers on behalf of regulated entities to be governed by a written agreement. That agreement would need to include specific obligations for the service provider, such as ensuring confidentiality, protecting the data, and complying with individual rights requests.

Contracts and Waivers

Any contractual provision or waiver inconsistent with New York HIPA would be declared void and unenforceable, meaning individuals would not be able to waive their rights under the law.

Enforcement

New York HIPA would empower the state attorney general to investigate alleged breaches of the privacy requirements and bring enforcement actions. Such actions could result in civil penalties of up to $15,000 per violation or up to 20 percent of the revenue obtained from New York consumers within the past fiscal year, whichever is greater. The bill would also give the attorney general the ability to enjoin violations, seek restitution, and obtain the disgorgement of profits “obtained directly or indirectly” by any violations. Unlike Washington State’s MHMDA, the bill does not include a private right of action for individuals to sue for violations.

Next Steps

New York HIPA underscores the state’s focus, and a broader focus of states across the country, on protecting the privacy of health information. Like Washington’s MHMDA, New York HIPA would broadly define regulated health information as any information reasonably tied to an individual or device and related to an individual’s physical or mental health, including location and payment information. The bill therefore seeks to protect a broader scope of health data than what has been historically viewed as PHI under HIPAA.

New York HIPA has potential far-reaching implications for businesses nationwide that collect or process data of New York residents or individuals located in New York. If the bill is signed into law, such businesses may wish to review and consider changes to their data processing practices, data handling policies, employee training programs, contractual agreements with service providers, and customer agreements. Additionally, they may want to review their websites with respect to collecting user information and providing consumers with opt-outs.

Notably, however, New York HIPA must still be delivered to and signed by Governor Hochul, who may seek to negotiate changes to the bill before signature or effectuate changes later through chapter amendments. The governor has shown a propensity to use such chapter amendments, which refer to changes by the governor that are approved by the legislature through subsequent legislation after the law has been signed. In addition, if enacted, the bill provides that the attorney general can promulgate rules and regulations to enforce the law.

Ogletree Deakins’ Cybersecurity and Privacy Practice Group and Buffalo office will continue to monitor developments and provide updates on the Cybersecurity and Privacy and New York blogs as additional information becomes available.

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The first article in this series provided a general overview of the OSH Act and OSHA; the second article examined OSHA’s rulemaking process; the third article reviewed an employer’s duty to comply with standards; the fourth article discussed the general duty clause; the fifth article addressed OSHA’s recordkeeping requirements; the sixth article covered employees’ and employers’ respective rights; the seventh article addressed whistleblower issues; the eighth article covered the intersection of employment law and safety issues; the ninth article discussed OSHA’s Hazard Communication Standard (HCS); the tenth article in the series examined voluntary safety and health self-audits; and the eleventh article, in two parts, reviewed OSHA’s citation process. In this twelfth article in the series, we focus on OSHA inspections and investigations.

OSHA inspections typically fall into five general categories: (1) Programmed Inspections, (2) Complaint Investigations, (3) Referrals, (4) Imminent Danger Investigations, and (5) Accident Investigations (including fatalities and catastrophes).

Quick Hits

• OSHA inspections typically begin with an unannounced arrival of a compliance officer, who may proceed with the inspection if the employer consents or after obtaining a warrant if entry is refused.
• The inspection process includes an opening conference, a walkaround inspection of the premises, document demands, and employee interviews, all of which are critical to the investigation.
• At the conclusion of an investigation, a closing conference is held where the compliance officer informs the employer of any citations and penalties and outlines the appeal process and warnings against retaliation.

The inspections typically begin with an “Opening Conference” wherein the compliance officer provides his or her identification and explains the inspection / investigation process, the scope of the inspection is discussed, and details regarding the physical inspection are hashed out. An employer that is being investigated may want to ensure that an experienced and a prepared “management representative” leads the process for the employer.

A “walkaround” inspection typically begins with the inspector proceeding with the management representative (and possibly a labor representative) to evaluate and document the premises based upon the purpose of the inspection. Inspectors can pursue evidence or conditions in “plain view” that may not have been part of the original reasons for the inspection.

OSHA will typically also demand documents related to the inspection. Documents can include safety program materials, compliance documents, training records, videos, photos, machine manuals, OSHA 300 logs, accident investigations, safety data sheets, safety meeting minutes, permits, and other records related to workplace safety.

Employee interviews are a cornerstone of investigations. Employers have a right to have a management representative or counsel present for OSHA interviews of management or supervisors. Non-management employees have rights in the interview process, including the right not to speak with the compliance officer if they so choose. Non-management employees are usually integral to investigations as they are usually the witnesses to any incident or accident and also have working knowledge of machinery, work processes, and tasks in the workplace. Interviews are fraught with complex risks and rights and are best managed by experienced management representatives or counsel.

At the conclusion of most investigations, the compliance officer will pursue a “closing conference” wherein the CSHO typically informs the employer of any citations and penalties, describes the citation appeal process, and offers other admonitions and standard warnings about discrimination and retaliation against employees who participated in the investigation.

Each aspect of an investigation is multifaceted, and especially in situations with an accident or fatality, the investigations can lead to citations and financial penalties. Inspections can move quickly, with demands for interviews occurring immediately upon the start of the investigation. Employers face challenges and risks with employee interviews, and the walkaround inspection can lead to the expansion of the investigation if there are hazards in plain view. In addition, inadequate or incomplete documents can create a narrative that damages the employer.

Ogletree Deakins’ Workplace Safety and Health Practice Group will publish additional articles on the Workplace Safety and Health blog as an ongoing part of its OSH Law Primer series. The next article in the series addresses criminal enforcement of violations.

For more information, please join us for our upcoming webinar, “OSH Law Primer, Part XII: Inspections and Investigations,” which will take place on Thursday, March 20, 2025, from 2:00 p.m. to 3:00 p.m. (EDT). The speakers, Karen F. Tynan and John D. Surma, will provide an overview of OSHA inspections and investigations, including what to do when OSHA shows up at your door, the inspection and walkaround process, and the closing conference. Register here.

The OSH Law Primer webinar series provides an overview of OSHA, the OSH Act, and how both influence workplaces in the United States.

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Quick Hits

• South Carolina state lawmakers introduced parallel bills in the state House and Senate that follow other recent executive and agency actions at the federal level and offer additional details not present in federal executive orders, such as definitions of “promoting DEI.”
• Proposed amendments to the South Carolina Code would require certification of compliance to the General Assembly, as well as require the state auditor to conduct periodic compliance audits.
• The bills include several carve-outs, including directly addressing First Amendment protections, which have been raised in several recent lawsuits challenging federal executive orders with similar content.

Defining DEI

On January 21, 2025, President Donald Trump signed Executive Order 14173 (EO 14173), with a nearly identical title as H. 3927 and S. 368—“Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” Unlike EO 14173, H. 3927 and S. 368 offer a definition of DEI at proposed Section 1-1-1910(A). Specifically, “promoting diversity, equity, and inclusion” is identified as “any attempt or effort to”:

(1) influence hiring or employment practices with respect to race, sex, color, ethnicity, gender, or sexual orientation other than through the use of color‑blind and sex‑neutral hiring processes in accordance with any applicable state and federal antidiscrimination laws;

(2) promote differential treatment of or providing special benefits to individuals on the basis of race, sex, color, ethnicity, gender, or sexual orientation;

(3) promote policies or procedures designed or implemented in reference to race, sex, color, ethnicity, gender, or sexual orientation for any purpose other than ensuring compliance with any applicable court order or state or federal law; or

(4) conduct trainings, programs, or activities designed or implemented in reference to race, sex, color, ethnicity, gender, or sexual orientation, other than trainings, programs, or activities developed for the sole purpose of ensuring compliance with any applicable court order or state or federal law.

Notably, both the terms “sex” and “gender” are used, as well as sexual orientation, and the list of characteristics in the definition does not include all categories from Title VII of the Civil Rights Act of 1964, as amended, nor does it address all groups protected in other parts of the South Carolina Code of Laws—such as under the South Carolina Human Affairs Law in Section 1-13-20. Three of the four definitional prongs also reference “applicable state and federal antidiscrimination laws”—these references presumably appear to serve both as a marker of prohibited DEI activities and as the sole allowable purpose for certain activities.

Prohibitions

H. 3927 and S. 368 propose at Section 1-1-1910(B) that “every office, division, or other unit by any name of every office or department of this State, and all of its political subdivisions, including all institutions of higher learning and school districts” be prohibited from:

(1) establishing or maintaining an office or division or other unit by any name whose purpose, in whole or in part, is the promotion of diversity, equity, and inclusion;

(2) hiring or assigning an employee or contracting with a third party to promote diversity, equity, and inclusion;

(3) compelling, requiring, inducing, or soliciting any person to provide a diversity, equity, and inclusion statement or give preferential consideration to any person based on the provision of a diversity, equity, and inclusion statement;

(4) giving preference on the basis of race, sex, color, ethnicity, gender, or sexual orientation to an applicant for employment, an employee, or a participant in any function of the office or department; or

(5) requiring as a condition of enrolling at an institution or performing any institution function any person to participate in diversity, equity, and inclusion training, which:

(a) includes a training, program, or activity designed or implemented in reference to race, sex, color, ethnicity, gender, or sexual orientation; and

(b) does not include a training, program, or activity for the sole purpose of ensuring compliance with any applicable court order or state or federal law.

Proposed Section 1-1-1910(C) would require the adoption of policies and procedures to discipline or dismiss employees or contractors who violate the prohibitions above.

Limitations

H. 3927 and S. 368 specifically note that institutions of higher education or an employee of an institution of higher education are not limited or prohibited, “for purposes of applying for a grant or complying with the terms of accreditation by an accrediting agency,” from providing a statement that highlights the institutions’ work in supporting “first-generation college students,” “low-income students,” or “underserved student populations.” Institutions are also not prohibited from certifying compliance with state or federal anti-discrimination laws.

The bills further address exemptions for institutions of higher learning for academic course instruction, scholarly research or creative work, activities of recognized student organizations, guest speakers or performers on short-term engagements, activities enhancing student academic achievement or postgraduate outcomes not based on race, sex, color, ethnicity, gender, or sexual orientation, and data collection.

Section 4 of H. 3927 and S. 368 explain that lawful state and private-sector employment and contracting preferences are not prohibited for veterans of the U.S. Armed Forces or those protected by the Randolph-Sheppard Act, nor is there any intent to prevent First Amendment of the U.S. Constitution protected speech. The direct carve-out of not seeking to chill First Amendment protected speech is noteworthy as it appears to be designed to avoid First Amendment challenges, which has been included in current lawsuits challenging EO 14173, as well as being one of the bases on which a preliminary injunction of EO 14173 was granted on February 21, 2025.

Certification, Testimony, and Audits

H. 3927 and S. 368 also propose to require certifications, elicit testimony before the General Assembly of certifying officials, and have the state auditor conduct compliance audits.

Proposed Section 1-1-1910(F)(1) prohibits “spending any money appropriated or authorized to the office or department until the governing board or chief executive officers, as applicable, submits to the General Assembly a report certifying compliance with this section during the preceding fiscal year,” while the certifying official may be “required to testify at a public hearing of the committee regarding compliance” pursuant to proposed Section 1-1-1910(F)(2). If enacted, this provision would most certainly place greater pressure on certifying officials.

The state auditor would also be tasked under proposed Sections 1-1-1910(F)(3) and (4) with conducting periodic compliance audits “as to whether the money has been expended in violation of this section.” If violations are found, the audited department or office would have 180 days to cure the violation or risk the state auditor notifying the State Fiscal Accountability Authority—which could potentially lead to the state treasurer withholding future distributions until the alleged violations are cured.

Finally, before any agency, office, division, or other unit contracts with a subcontractor for a state-paid project, the applicable subcontractor or grant recipient would also be required to certify that it does not operate any prohibited DEI programs. This requirement in proposed Section 1-1-1920 has the potential to require certifications across the business community in South Carolina and beyond the state, including potentially having certifications connected to state payments applying to nongovernmental private employers.

Next Steps

Currently, both bills have been referred to committee—H. 3927 referred to the Committee on Education and Public Works on February 6, 2025, and S. 368 referred to the Committee on Judiciary on February 20, 2025. On March 5, 2025, the South Carolina Revenue and Fiscal Affairs Office issued a Statement of Estimated Fiscal Impact related to H. 3927 explaining the fiscal impact of the bill and resources and funds that may be needed to carry out the bill’s objectives.

Republicans hold supermajorities in both the South Carolina Senate and House of Representatives, and the South Carolina governor is also a Republican. This could have an impact on how the proposed bills move through the process and, if passed as written, could have important impacts on South Carolina employers and businesses involved with state work. These bills may also be important for employers in other states as they could further signal a more extensive wave of state-based legislation addressing diversity, equity, and inclusion programs.

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

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President Trump Addresses Congress. On March 4, 2025, President Donald Trump delivered an address to a joint session of the U.S. Congress. Although the State of the Union–like address was short on specifics, President Trump mentioned a few issues that caught our attention at the Buzz.

• Diversity, Equity, Inclusion (DEI), and Accessibility. President Trump did not reveal any new policy initiatives in this area, but his discussion of the topic further demonstrates that the administration views this as a winning political issue. Consequently, employers—including federal contractors—should expect the administration to continue moving forward with anti-DEI policy initiatives already set in place, including an appeal of a federal court’s decision to block three components of two DEI-related executive orders.
• Gold Cards. President Trump touted this nascent policy idea that would purportedly allow foreign nationals to buy permanent residency in the United States (a “gold card”) for $5 million. Would this replace the EB-5 investor program or exist alongside it? Nobody knows because the proposed policy hasn’t been presented in written detail. This would likely take an act of Congress, too.
• No Tax on Tips or Overtime. This is an issue that both parties brought up on the campaign trail in 2024 and was reemphasized by President Trump. Legislation has been introduced in both the U.S. Senate and U.S. House of Representatives. But questions of where to draw the lines around who could take advantage of such a policy, the potential fiscal impact, and general tax fairness will have to be resolved before the bills move forward.

Court Reinstates NLRB Member Wilcox. On March 6, 2025, the U.S. District Court for the District of Columbia ordered the reinstatement of National Labor Relations Board (NLRB) Member Gwynne Wilcox, whom President Trump fired on January 7, 2025. The National Labor Relations Act (NLRA) allows for the removal of Board members “upon notice and hearing, for neglect of duty or malfeasance in office, but for no other cause.” In this case, the administration did not argue that Wilcox was removed for neglect of duty or malfeasance, but instead argued that this provision acted as an unconstitutional restriction on the authority of the executive branch. Ruling that the protection from removal contained in the NLRA “is a valid exercise of congressional power,” the court stated, “The President does not have the authority to terminate members of the National Labor Relations Board at will, and his attempt to fire plaintiff from her position on the Board was a blatant violation of the law.” Accordingly, the court ordered Wilcox to be reinstated to her position on the Board. The administration will assuredly appeal. C. Thomas Davis and Zachary V. Zagger have the details.

Update on Government Funding. The federal government will shut down at midnight on March 15, 2025, if Congress does not come to an agreement on federal appropriations. Republican leaders in the U.S. House of Representatives are expected to move a continuing resolution that would extend current funding through September of this year. Of course, anything can happen with the way politics works these days. In the meantime, readers can remind themselves of what happens to labor/employment and immigration agencies in the event of a shutdown.

Bipartisan Team of Senators Seeks Government Control Over Labor Contracts. Senator Josh Hawley (R-MO) has teamed up with Senator Bernie Moreno (R-OH), as well as Democratic Senators Cory Booker (NJ), Gary Peters (MI), and Jeff Merkley (OR), to introduce the Faster Labor Contracts Act, a smaller component of Senator Hawley’s larger labor reform framework. The bill would do the following:

• Require employers to begin bargaining within ten days of receiving a request to do so from the exclusive bargaining representative of its employees.
• If an employer and union could not reach an agreement on a contract after ninety days, either party would be able to request the Federal Mediation and Conciliation Service (FMCS) to mediate.
• If after thirty days of FMCS-facilitated bargaining, the parties still could not come to an agreement, a three-member FMCS panel would be empowered to “render a decision settling the dispute and such decision shall be binding upon the parties for a period of 2 years, unless amended during such period by written consent of the parties.”

If this sounds a lot like the Employee Free Choice Act and the Protecting the Right to Organize (PRO) Act, you’re correct, so it is no surprise that the bill is supported by the International Brotherhood of Teamsters. Business groups have roundly criticized the bill. The Coalition for a Democratic Workplace, which describes the Faster Labor Contracts Act as a “horrible bill,” states that “[a]rbitrators, many of whom know nothing about running a business or the specifics of the business in question, could impose devastating terms for the employer or workers, and there would be no means of stopping them from running a business into the ground.”

PRO Act Reintroduced. Speaking of the PRO Act, the legislation was reintroduced in Congress this week. In a blog post discussing the bill, Republicans on the House Committee on Education and the Workforce wrote, “The PRO Act is bad for workers and bad for job creators.” With Republicans in control of Congress and the White House, the bill is unlikely to gain much traction.

DOL Nominee Advances. This week, the Senate Committee on Health, Education, Labor and Pensions (HELP) voted along party lines to advance the nomination of Keith Sonderling to be deputy secretary of labor. Sonderling previously served as a commissioner of the U.S. Equal Employment Opportunity Commission (EEOC) and in the U.S. Department of Labor’s (DOL) Wage and Hour Division. Accordingly, many in the business community are hopeful that Sonderling will play a significant role in setting the policy agenda of the DOL.

H-1B Registration Opens. Registration for the fiscal year 2026 H-1B cap opened earlier today (March 7, 2025) and will close on March 24, 2025. This year will be the second go-around under the new beneficiary-centric selection process, but the first year since the registration fee increased from $10 to $215, as well as the first year under the second part of the Biden-era H-1B modernization rule, which among other changes, amended the definition of “specialty occupation.”

Let’s Stay Together. On March 4, 2025, Representative Al Green (D-TX) had to be escorted from the House chamber by the House sergeant at arms for continually interrupting President Trump’s speech to Congress. (Green later became the twenty-eighth representative to be censured in the House.) The sergeant at arms is tasked not only with maintaining decorum in the House, as he did this week, but also with ensuring the safety of members of Congress and those visiting or doing business there. The sergeant at arms is also empowered to compel absent members to the House floor for votes and is famous for announcing the arrival of the president for the State of the Union address, for example. Establishing the position was one of the first acts of the very first Congress in 1789. Since that time, thirty-nine individuals—including the current sergeant at arms, William McFarland—have served in the role. Of those thirty-nine, eight also served as representatives in the House either before or after their duty as sergeants at arms.

Quick Hits

• EEOC Acting Chair Andrea Lucas advised through a press release that the Commission plans to prioritize protecting Americans from “anti-American” bias.
• The Immigration and Nationality Act (INA), enforced by the DOJ, prohibits discrimination based on citizenship status, including U.S. citizens as a protected category.
• The EEOC’s guidance explains how claims brought under Title VII and the INA may intersect and which agency—the EEOC or DOJ—may ultimately investigate the respective claims.

Title VII of the Civil Rights Act of 1964 prohibits discrimination based on enumerated protected categories, including national origin. The U.S. Congress tasked the EEOC with enforcing antidiscrimination laws, particularly Title VII. In prior administrations, the EEOC’s focus has been on national origin discrimination for employees who identify with origins outside of America.

On February 19, 2025, the EEOC issued a press release wherein Acting Chair Andrea Lucas advised that the Commission would prioritize “protecting American workers from anti-American national origin discrimination.” According to the press release, to achieve this policy priority, the EEOC “will help deter illegal migration and reduce the abuse of legal immigration programs by increasing enforcement of employment antidiscrimination laws against employers that illegally prefer non-American workers, as well as against staffing agencies and other agents that unlawfully comply with client companies’ illegal preferences against American workers.” Notably, Title VII applies to employers with fifteen or more employees.

The Immigration and Nationality Act (INA) also prohibits discrimination, enumerating other protected categories based on citizenship status. Congress tasked the DOJ with enforcing this antidiscrimination statute. The DOJ’s Immigrant and Employee Rights (IER) section handles such investigations, which are known to be comprehensive.

In prior administrations, the IER traditionally focused on employment bias against foreign nationals as opposed to bias against U.S. citizens. The first Trump administration attempted to conduct more investigations into bias against U.S. citizens. In 2024, IER came under additional scrutiny by Trump supporters, alleging the section favored investigations into immigrant employees over citizen employees.

Under the second Trump administration, the section is expected to shift its focus to protecting U.S. citizens’ rights. Notably, the INA’s antidiscrimination provisions apply to employers with four or more employees. This difference from Title VII could potentially pave the way for aggrieved employees to bring claims against entities employing from four to fourteen employees.

The EEOC’s press release vaguely references collaboration with other federal agencies, including the DOJ. In light of the EEOC’s focus on anti-American bias in the workplace and the administration’s focus on U.S. citizens’ rights, these two laws—Title VII and the INA—and agencies may work together to increase the focus on any “anti-American” bias while also placing other forms of citizenship and/or national origin discrimination on the back burner.

Next Steps

In light of the EEOC’s press release, employers may want to review their internal policies to ensure they not only prohibit discrimination on the basis of national origin, but also citizenship status. Moreover, employers may want to remain focused on any guidance put forth by the EEOC or DOJ regarding the focus of their investigations in the coming months.

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

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Quick Hits

• Virginia’s General Assembly passed a workplace violence bill that would require any workplace violence policy to include a “mechanism for employees to report workplace violence” and measures to protect workplace safety.
• The bill, if signed, would require employers to make these plans “tailored and specific to conditions and hazards” at the employer’s workplace and would make it unlawful for employers to discriminate or retaliate against employees who report workplace violence, threats, incidents, or concerns to the employer or the authorities.
• The bill is now on the governor’s desk.

If passed, HB 1919 would require any such workplace violence policy to include a “mechanism for employees to report workplace violence” in addition to measures to protect workplace safety. If signed by the governor, the new law would require covered employers to make their workplace violence plans “tailored and specific to conditions and hazards” at the employer’s workplace.

If enacted, the law would require employers in Virginia to explicitly include several layers of implementation controls in their workplace violence policies. Specifically, any policy needs to outline the “procedures and methods for identifying” the individuals responsible for the policy’s implementation. Any policy must also detail how employers will respond to incidents immediately and post-incident investigation procedures.

The largest consideration for employers is the requirement to assess risks of workplace violence and hazards to employees. The bill does not define what this assessment looks like but does require that it be completed to support the specifics of each employer’s jobsite.

Retaliation

If signed, the bill would make it unlawful for employers to discriminate against employees who report workplace violence, threats, incidents, or concerns to the employer or the authorities. Beyond traditional prohibitions on retaliation, HB1919 would explicitly prevent employers from taking any disciplinary actions against employees who report workplace violence incidents “under a policy developed pursuant to § 40.1-51.4:6 or otherwise.”

Documentation and Reporting

If enacted, employers would be required to document all reports of workplace violence incidents, including the responses, investigations, and any corrective measures taken. Under the bill, any documentation would be required to detail the violent incident, including the date, time, and location, as well as the names and job titles of the employees involved. Additionally, it would be required to describe the nature and extent of any injuries and, if applicable, how the incident was resolved. As far as retention, the law would require employers to keep these documents for a minimum of five years and make them available upon request to employees (with personal identifying information omitted) and law enforcement.

Enforcement: Civil Penalties

In the event that employers are found to be noncompliant after the July 1, 2027, deadline, they could potentially be subject to a civil penalty of up to $1,000 per violation.

Beyond the workplace violence requirements in HB1919, employers may also want to be aware of House Bill (HB) 1620, whichwould direct the Virginia Department of Labor and Industry to “convene a work group for the purpose of evaluating the prevalence of workplace violence” in the state. The work group would develop recommendations related to (a) maintaining healthy, safe, and secure work environments; (b) educating employers and employees and communicating to them techniques to effectively handle conflicts in the workplace; and (c) employee support services designed to address workplace violence. Unlike HB1919, this bill is currently tabled in committee but can change the scene about how enforcement might look going forward.

Employers in Virginia will have roughly two years to come into compliance if the bill is signed into law. It may be prudent for employers to start considering abusive conduct and bullying as factors in their workplace evaluations.

Key Takeaways

In 2025, many employers are starting to consider workplace violence incidents in their efforts to maintain workplace safety. Currently, there are no federal requirements related to workplace violence, and several states (including California and Virginia) are leading the charge in creating state-specific requirements. With Virginia’s newly proposed requirements, employers with one hundred or more employees may want to consider planning for a workplace violence plan, including what the program will entail and what workplace-specific hazards they need to consider.

Ogletree Deakins’ Workplace Violence Prevention Practice Group will continue to monitor developments and provide updates on the Workplace Violence Prevention and Virginia blogs as additional information becomes available.

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Quick Hits

• A California appellate court recently ruled a company could not compel individual PAGA claims to arbitration because the plaintiff disclaimed all individual relief and bought the action on a representative basis only.
• There is a split of authority on this issue at the California appellate court level.
• The company could appeal this decision to the California Supreme Court.

On February 26, 2025, the California Court of Appeal, Fourth Appellate District, upheld a lower court decision denying a sanitation company’s motion to compel arbitration of individual PAGA claims.

In February 2022, an employee sued Packers Sanitation Services, which was recently renamed Fortrex, in a representative capacity under PAGA, alleging violations of California’s overtime and meal and rest break requirements. In March 2022, the company moved to compel arbitration based on an arbitration agreement the employee had signed.

The plaintiff argued he did not allege the individual component of a PAGA claim, so there was no individual claim that the trial court could compel to arbitration. Instead, he argued that he was acting only in a representative capacity. The Imperial County Superior Court agreed.

The Fourth District agreed with the trial court and concluded that the plaintiff alleged violations only in a representative capacity, and the trial court was correct in denying the company’s motion to compel arbitration. It noted that a complaint could fail to include an individual PAGA claim, even if it should include an individual PAGA claim.

Notably, the California Court of Appeal, Second Appellate District recently came to the opposite conclusion as the Fourth District. In that decision, the Second District held that a PAGA plaintiff cannot disclaim the individual component of a PAGA action and bring such an action in only a representative capacity.

In 2022, the Supreme Court of the United States held in Viking River Cruises v. Moriana that individual PAGA claims can be compelled to arbitration, and any non-individual claims would be dismissed at that point. However, in 2023, the California Supreme Court ruled that plaintiffs may still be able to pursue representative PAGA claims in court, even after their individual claims are sent to arbitration.

Next Steps

The employer in this case could appeal the Fourth District’s decision to the California Supreme Court, especially in light of the current split in authority in the state.

In the meantime, California employers may wish to review their arbitration agreements when confronting a potential PAGA lawsuit.

Ogletree Deakins’ California Class Action and PAGA Practice Group will continue to monitor developments and will provide updates on the California, Class Action, and Wage and Hour blogs as new information becomes available.

Tim L. Johnson is a shareholder in Ogletree Deakins’ San Diego 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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