The State of DEI Programs in 2025

Businesses of all sizes have implemented Diversity, Equity, and Inclusion (DEI) programs, policies, and initiatives within their workplace. However, as a result of a new executive order from the Trump Administration in early 2025, programs and initiatives involving DEI practices have been put into question for many employers due to changes made at the federal level. To reaffirm the legal status of DEI programs in business, the EEOC has put out a press release specifying the legality of DEI programs.

When evaluating DEI and how initiatives are being implemented, employers must navigate the topic with care and ensure they avoid potential penalties that may arise if certain policies are deemed unlawful. Here is what you need to know about the current status of DEI in 2025 and how your business should move forward.

What Are DEI Policies?

DEI policies are intended to create equal job opportunities and a fair / inclusive working environment.

Common aspects that businesses focus on regarding DEI policies and initiatives include:

Non-discrimination policies, including policies related to diversity recruitment and hiring
Accommodations for employees with disabilities, such as flexible working conditions
Training and development programs engineered to teach anti-discrimination behavior

However, it’s important to note that DEI does not have a definite legal definition according to the EEOC.

DEI Executive Order for 2025

On January 21st, 2025, President Trump signed Executive Order 14173, which is designed to combat DEI practices on the federal level and question practices amongst private sector employers, in order to restore merit-based opportunities. As such, the statement includes details regarding what is being targeted and the plan for ending DEI programs.

What Is Included in the DEI Executive Order?

The Trump Administration’s efforts in ending DEI practices target specific DEI objectives. The executive order specifically urges agencies and staff under the Trump Administration to:

Terminate positions relating to DEI within the federal government
Cancel grants and contracts related to equity
End previous executive orders requiring contractors to use federal funds to implement anti-discrimination and employment barriers
Enact contracts for federal employees that certify the end of DEI-related efforts
Question the use of DEI within private sector businesses, institutions, and non-profits

What is Not Included in the DEI Executive Order?

Programs enacted through statutes or regulations that counter continuous discriminatory practices will still be in effect. These programs include:

Equal Employment Opportunity Commission
US Department of Justice under the Civil Rights Division
US Merit Systems Protection Board
Smaller dedicated departments against continued discrimination, such as the Department of Transportation’s Disadvantaged Business Enterprise Program

Impact on Title VII of the Civil Rights Act of 1964

DEI is a broad term that is not defined in Title VII of the Civil Rights Act, a federal law that prohibits employment discrimination. Generally, Title VII is unaffected by the DEI Executive Order.

However, as a result of the executive order, DEI initiatives, policies, programs, or practices under Title VII may be unlawful if they involve:

Hiring or recruiting employees, or making such decisions based on race, sex, or any other protected class
Separating groups of workers based on race, sex, or other protected classes, including when administering workplace training, regardless of whether the training is DEI-related

To further highlight the differences between Title VII and DEI policies and programs, it’s important to note that the following are still in effect as federal law under Title VII despite the executive orders on DEI:

Protections against employment discrimination due to race, religion, sex, and other protected classes
Protections against negative or retaliatory action from an employer regarding discrimination complaints or processes
Employers may not discriminate in any aspect of employment, including but not limited to hiring and firing, compensation, recruitment, etc.

To get a better understanding of what is included in Title VII, more information on Title VII is provided on the US Department of Justice website.

Why Are Companies Rolling Back DEI Policies and Programs?

While federal agencies have already taken action to roll back DEI entirely, many private sector companies that have implemented previous DEI-related practices are also proactively starting to roll them back in preparation and direct response to what is outlined in the executive order: threatened legal action against companies with DEI initiatives. Some examples of large employers scaling back DEI include Amazon, Google, and Goldman Sachs.

Many of these companies that plan to or have already begun rolling back DEI-related practices are doing so due to the following:

Legal changes against DEI, as outlined in Executive Order 14173, that specify the unlawful nature of DEI programs
Shifts in company priorities that are influenced by company shareholders or leadership
The costs of providing DEI programs to employees

How Should Businesses With DEI Programs Move Forward?

When assessing the inherent risks associated with DEI, companies should remain cautious when considering adding or continuing DEI-related practices. However, for companies going forward with DEI programs, ensure your company understands how to navigate the legality of DEI and evaluate if the program can be considered unlawful by referring to the specifications detailed in the executive order.

To help safeguard your DEI initiatives, review that your company does not:

Form separate employee resource groups based on race, color, sex, or other protected classes; Or
Make employment decisions motivated by DEI

Regardless of how your business plans to tackle the new DEI executive order, understanding the ins and outs of DEI management while balancing other workforce duties can be challenging, especially when considering the risks associated with DEI initiatives. Contacting an HR outsourcing company can help your business safely navigate DEI and provide the advice you need to move forward. If your business needs guidance on how to navigate its DEI situation, contact us today.