Workforce Bulletin

On July 22, 2026, the U.S. Equal Employment Opportunity Commission (EEOC) circulated a proposed rule to formally proceed with rescinding workforce demographic data reporting requirements (“EEO reports”). While this move by the EEOC is not surprising, it represents a major break with the agency’s history: the creation of  workforce demographic data reporting requirements was one of the first actions the EEOC took after it began operations.

Many employers are likely familiar with the annual data collection mandated by the EEOC. The original of these – EEO-1 reports – requires all private sector employers with 100 or more employees and federal contractors with 50 or more employees (if they meet certain fiscal criteria) to submit workforce demographic data, specifying job category, sex and race or ethnicity. Such reports have been mandatory since 1966.

The proposed rule will rescind the requirement to file EEO-1, as well as EEO-2, EEO-3, EEO-4, EEO-5, and EEO-6 reports. In its reasons explaining the proposed elimination of a 60-year old process of information gathering, the EEOC makes some big claims, going as far as to assert that such data collection might be unconstitutional.

What employers should know about key developments this week:

• Severance Agreement Overhaul: The No Severance Ultimatums Act, awaiting Governor Kathy Hochul’s signature, would extend a 21-day review period plus a seven-day revocation period to all employees and require severance agreements to explicitly state that the employee has the right to consult counsel. The legislation would take effect immediately upon signature.
• Trapped at Work Act Amendments: On December 19, 2026, New York’s ban on “stay or pay” promissory notes takes effect. The Trapped at Work Act carves out financial bonuses and wage advances and adds new conditions for tuition repayment agreements. New York joins California and Connecticut in banning certain promissory notes.
• Earned Safe and Sick Time Act Update: Amended Earned Safe and Sick Time Act rules, now in effect for New York City employers, require 32 hours of unpaid protected time off immediately upon hire and set new obligations for employers that use electronic systems to track sick leave balances for departing employees.

In this episode of Employment Law This Week^®, Epstein Becker Green attorney Drew C. Ambrose discusses the No Severance Ultimatums Act and what employers should be doing now to prepare their severance agreements ahead of the governor’s signature.

Connecticut Public Act 26-1 (Sections 50-57) requires specified employers who employ, directly or indirectly through a third party, workers at a warehouse distribution center to provide employees with written notice of work production quotas by August 1, 2026. After that date, covered employers will be required to provide these written notices to new employees upon hire. While this new law affects only a specific set of Connecticut employers, the obligations for those employers are significant. This law makes Connecticut the sixth state to impose special requirements on employers to protect warehouse workers.[1]

[1] The others are California, New York, Minnesota, Washington and Oregon. Additionally, on July 13, 2026, Rhode Island enacted such a law, taking effect January 1, 2027.

New Jersey’s employment law landscape has shifted significantly. As we reported earlier this year, former Governor Phil Murphy signed into law Assembly Bill 3451, effective July 17, 2026, which vastly expands New Jersey workers’ job protections. The New Jersey Department of Labor and Workforce Development (NJDOL) issued new guidance on the sweeping changes to job protection requirements under the state’s temporary disability insurance (TDI), family leave insurance (FLI), and Family Leave Act (NJFLA) amendments and published FAQs for employers and employees for TDI/FLI job protection. For employers across New Jersey, particularly smaller businesses, the implications are substantial and require immediate action.

On June 23, 2026, the New York City Department of Consumer and Worker Protection (DCWP) issued final rules implementing recent amendments to New York City’s Earned Sick and Safe Time Act (ESSTA). The final rules largely incorporate the rules proposed earlier this year, with a few key changes employers should be aware of before the rules take effect on July 23, 2026.

What employers should know about key developments this week:

• EEOC’s New Direction: The Equal Employment Opportunity Commission (EEOC) has scrapped its two-year-old enforcement priorities and rescinded 40-year-old affirmative action guidance in favor of a federal strategy that deprioritizes disparate impact liability and focuses enforcement on disparate treatment claims.
• State-Level Backlash: Multiple states—including California, Colorado, Connecticut, Illinois, Massachusetts, Minnesota, New Jersey, and New York—have expanded or maintained disparate impact liability in their civil rights laws, creating direct conflict with federal EEOC priorities.
• AI and Automated Hiring at Risk: The divergence between federal and state regulators leaves employers uncertain about compliance when using facially neutral employment technologies, including artificial intelligence (AI)-driven hiring tools and standardized testing validation.

In this episode of Employment Law This Week^®, Epstein Becker Green attorney Deborah DeHart Cannavino discusses the EEOC’s shift in focus from disparate impact to disparate treatment enforcement and what it means for multistate employers navigating a regulatory patchwork.

In June, the U.S. Justice Department’s Office of Legal Counsel (OLC) issued an Opinion calling into question the concept of disparate impact liability under federal law. Under Title VII of the Civil Rights Act of 1964 as amended in 1991, disparate impact liability is triggered if a neutral employment practice disproportionately harms a protected class. The Opinion concluded that certain guidelines maintained by the U.S. Equal Employment Opportunity Commission (EEOC) are unconstitutional because they are grounded in disparate impacts alone without sufficient regard to employer intent.

What employers should know about key developments this week:

• Agencies Lose Their Independence: In Trump v. Slaughter, the U.S. Supreme Court held that federal agencies such as the National Labor Relations Board (NLRB) are not “independent.” The NLRB’s Board members and General Counsel serve at the President’s pleasure and can be removed at any time, for any reason—or for no reason.
• The Ripple Effect on the NLRB: Although the Slaughter ruling doesn’t affect other positions at the NLRB, it has the potential to have a significant trickle-down effect on those who report to the NLRB’s Board members or General Counsel. This will likely be compounded by the administration’s efforts to remove civil service protections for many positions at the NLRB as well as other agencies.
• A New Circuit Split on the Standard for Section 10(j) Injunctions: Applying the traditional four-part test for the first time since the Supreme Court’s decision in Starbucks Corp. v. McKinney, the U.S. Court of Appeals for the Sixth Circuit declined to accept an NLRB Regional Director’s contention that irreparable harm would result from an employer’s refusal to bargain, splitting with the Ninth and Fourth Circuits over the standard for granting injunctive relief under Section 10(j) of the National Labor Relations Act.

“BIPOC (Black, Indigenous, People of Color),” “Minorities,” “Native,” “Tribal,” “Indigenous,” “Immigrant,” “LGBTQ,” “Homosexual,” and “Gay.” 

These were the search terms utilized by the federal government to eliminate Diversity, Equity, and Inclusion (DEI) in federal funding, all while using Artificial Intelligence (AI) to target those funds. In a stunning rebuke of such discriminatory practices, the District Court for the Southern District of New York found in American Council of Learned Societies v. McDonald (ACLS), that the record established “beyond any dispute, that the Government used protected characteristics as criteria for identifying grants for termination. DOGE swept in race and ethnicity—including grants concerning Black, Asian, Latino, and Indigenous communities—as well as national origin and immigration status; religion and religious identity (including Jewish, Christian, and Muslim subjects); sex; and sexual orientation, as criteria for grant termination.” The federal government terminated grants involving African, Asian, and South American countries—as well as grants relating to Indigenous Americans and Jewish women—while retaining grants involving Western European subjects.

With the 2025-2026 legislative session now over, the New York State Senate and Assembly recently passed a handful of bills that, if enacted, would significantly impact New York State employers. Although approved by both chambers of the Legislature, laws are not enacted until presented to and acted upon by Governor Kathy Hochul. While it’s not a sure thing that the Governor will approve all of these measures, it’s wise to be aware and prepare for these potential changes.