Navigating Compliance with Executive Orders on DEI

The evolving landscape of inclusion and diversity (I&D) has created new challenges for HR professionals, particularly regarding the implementation, structure, and legal parameters of diversity, equity, and inclusion (DEI) programs under the Trump administration's recent executive orders (EOs).

I&D programs are well-documented drivers of stronger employee engagement and improved business outcomes. However, many HR professionals remain uncertain how to reassess their approaches to ensure compliance while maintaining the effectiveness of these initiatives. This lack of clarity can complicate efforts to align I&D strategies with both organizational goals and regulatory requirements.

In a recent webcast, SHRM leadership addressed key concerns raised by HR teams, providing clarity, actionable strategies and best practices to help teams adapt to shifting legal frameworks. Key topics included:

• The implications of executive orders on existing DEI programs.

• Compliance best practices, including permissible and nonpermissible actions.

• Practical steps for maintaining effective I&D initiatives within regulatory constraints.

With SHRM’s guidance, organizations can navigate compliance challenges with confidence while continuing to foster inclusive and equitable workplaces. Below are SHRM’s responses to frequently asked questions on “illegal DEI,” affirmative action, bias, hiring discrimination, data collection, and more.

What is “illegal DEI”? 

Trump’s Jan. 21 executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” called for merit-based employment decisions, prohibiting “illegal DEI” practices. The term “illegal DEI” lacks a clear definition, leaving its interpretation open to ambiguity and creating potential compliance risks. “The order does not actually define explicitly what ‘illegal DEI’ is, and that’s really important to understand,” said Anuradha Hebbar, J.D., president of SHRM CEO Action for Inclusion & Diversity.  

However, the order does not change Title VII protections, which continue to prohibit discrimination based on race, sex, and other protected characteristics. “The law has fundamentally not changed. It is the same as it was before. You cannot discriminate based on Title VII protected characteristics,” said Hebbar.

Instead, the EO primarily targets preferential treatment, which was never allowed under Title VII. Rather than eliminate programs, Hebbar emphasized that organizations should focus on compliance with Title VII. “It does not mean DEI goes away. It means we do not do programs that are exclusive or give preferential treatment,” she said. 

As legal interpretations evolve, HR professionals should continue to consult with legal counsel and evaluate their organization’s initiatives. For further guidance, SHRM’s Belonging Enhanced by Access through Merit (BEAM) Framework can help your organization align I&D initiatives with ongoing compliance changes.

 
Can you provide an example of “changing terms” or language that could be considered a way to circumvent executive orders that could raise red flags?

When it comes to evolving I&D programs, simply changing the name of a program isn’t enough to ensure compliance with executive orders. Organizations must make real changes to their processes, culture, and methodologies. 

For example, an organization can’t simply relabel a “diversity sponsorship program” as a “sponsorship program” and still exclude certain groups from participating. Changing the language without adjusting the underlying structure or goals won’t prevent potential problems. The change must go deeper than just the name — it should involve rethinking how the program operates and ensures equal opportunity for everyone.

“If you have to evolve, evolve,” said Tamla Oates-Forney, CEO of SHRM Linkage. “But don’t try to bait and switch, as it will harm the cause more than help it,” she added, emphasizing that language must align with action. Both need to work together to ensure that all employees have equal access to benefits and opportunities. 

While the current uncertainty can be challenging, it also presents HR with an opportunity to lead and drive positive change. SHRM encourages organizations to evolve their programs thoughtfully and solve challenges in ways that benefit everyone.

Without affirmative action, what mechanisms will ensure that workplaces truly hire based on merit, rather than reinforcing existing inequalities?

Trump’s rescission of EO 11246, rolling back requirements for federal contractors to practice affirmative action based on race and gender, has raised concerns for HR teams. However, workplace protections remain in place under Title VII and equal employment opportunity (EEO) laws.

“We still cannot discriminate, and we have nondiscrimination obligations based on race, gender, and other protected classes,” said Oates-Forney. While HR teams can enforce these laws to maintain fair workplaces, addressing bias is more complex.  

Can organizations still conduct bias and cultural competence training?

Yes — if it’s designed and implemented correctly. Training on unconscious bias and cultural competence remains legal, as long as it aims to improve workplace processes and outcomes. “We still have to manage bias to make the best decisions — the most fair decisions — because we are all fundamentally biased,” explained Hebbar.

Research shows that implicit bias significantly influences every stage of the employee life cycle, from hiring to advancement. Beyond Title VII protections, one of the most impactful approaches to reducing bias in decision-making is training managers and people leaders to recognize and manage their own biases. These programs increase self-awareness, helping individuals make more objective decisions and fostering inclusive workplaces.  

However, training should be purposeful. “The main thing organizations must solve for is, why are we doing the unconscious bias training?” said Oates-Forney. “And what is the evidence that we can convey that it is solving for?” Organizations must first identify the specific problem they aim to address, assess the why, and ensure that training is inclusive and results-driven. While training structures may vary, their purpose should be clear — whether it’s managing bias, improving cultural competency, or fostering inclusive leadership. The goal should always be meaningful, lasting change.

An intentional and well-structured approach is key to building inclusive workplace programs that benefit both employees and business outcomes. When executed effectively, these initiatives foster stronger collaboration among employees and enhance organizational success.

Do the executive orders affect equal opportunity employer (EOE) or Americans with Disabilities Act (ADA) compliance, if hiring is done without regard to race, color, religion, national origin, sex, age, or disability on our job postings?  

While many organizations label themselves EOEs, the use of affirmative action language now requires careful consideration in response to the rescission of EO 11246. Hiring without regard to race, color, religion, national origin, sex, or other protected categories is lawful. However, “it’s the usage of the affirmative action nomenclature that will require some nuance,” Oates-Forney noted.

While federal affirmative action obligations regarding race and gender have ended, “affirmative action obligations for people with [disabilities] and veterans, and compliance with all state and local affirmative action and EEO reporting requirements, will continue,” said Oates-Forney.

To remain compliant, organizations must be aware of various state and local requirements, some of which may still mandate affirmative action policies. HR teams should seek local counsel to determine how this language resonates in the states and communities in which their organization operates.  

When addressing hiring practices, it’s essential to look beyond the phrasing of affirmative action in job postings and consider how it reflects across your employer brand. For companies operating across multiple states, adopting a cohesive, global approach becomes even more critical. 

What if there is a job requirement, such as “language skills,” that leads to hiring more people of a certain race, etc., based on that certain skill?

Organizations must clearly distinguish between job requirements and preferred skills to ensure job postings are accurate and legally compliant.

If a qualification is a true requirement, employers can list it as such and hire accordingly. However, issues arise when hiring decisions are influenced by criteria that are not essential to the role. “You really need to define whether it’s truly required or truly preferred. If it’s required, the burden of proof rests on you as the employer to make sure you’re hiring against that and not deviating from it,” said Oates-Forney. “If you were to deviate from that requirement, it could cause a lot of issues, have adverse impact, and be deemed as discriminatory.”  

Businesses sometimes collect data on race and ethnicity for applicants. Can these practices legally continue?

Yes. Businesses can still collect race and ethnicity data from applicants, but they must do so with a clear purpose.

Employers collect two types of demographic data. The first is legally required data, such as the annual EEO report, which mandates reporting employees’ race and gender. The second is discretionary data, such as race and ethnicity information, which businesses may gather voluntarily. While there is no legal prohibition against gathering this data, organizations should only do so for legitimate reasons — such as assessing adverse impacts or meeting EEO obligations.

Collecting demographic data without a defined purpose can create compliance risks and data management challenges. HR teams should assess whether data practices serve a specific function or support meaningful objectives, such as advancing diversity efforts or ensuring fair hiring. The goal of data collection should always be to drive positive business and workforce outcomes. 

How should employers who are not federal contractors, yet may receive federal government grant dollars, be prepared to prove they do not have “illegal DEI” programs?

Employers navigating recent executive orders should take a structured approach to compliance. “We believe the way to do that is to follow the BEAM Framework,” said Jim Link, SHRM-SCP, chief human resources officer at SHRM.

SHRM’s BEAM Framework is a structured guide to help businesses ensure compliance with executive orders while fostering inclusion in the workplace. The framework is built on four principles, starting with ensuring that “merit is the primary lens of every HR action undertaken,” Link noted. 

Through the BEAM Framework, SHRM aims to help HR teams approach these changes in an actionable way. The framework provides five key questions to guide organizations in adapting I&D initiatives while staying compliant with evolving regulations. By applying these principles, employers can confidently assess their programs, ensuring they align with legal requirements while maintaining equitable workplace practices. 

How do executive orders affect tribal institutions like the Indian Health Service, the Bureau of Indian Affairs, and other regulatory agencies or departments that might utilize Indian preference language?  

While executive orders have raised concerns, “Indian preference is fundamentally different from the DEI initiatives that have been targeted,” said Link.

“Indian preference is grounded in the Indian Self-Determination and Education Assistance Act, the Indian Reorganization Act, and other similar legislation that recognizes all the tribes’ unique political status as sovereign entities with government-to-government relationships with the United States,” Link explained. 

SHRM believes this distinction sets Indian preference apart from race-based policies that are facing judicial and executive scrutiny. However, businesses should be aware of potential risks:  

• Federal agencies may fail to clearly distinguish Indian preference programs from broader DEI initiatives.

• The repeal of a White House initiative on Native American educational equity could delay funding for organizations relying on Indian preference policies.  

• The Department of Government Efficiency’s proposed closure of multiple federal and regional offices, including 25 Bureau of Indian Affairs locations, could potentially limit access to essential resources.  

These changes could create confusion for affected organizations and HR teams, making it critical to clarify which offices are closing and how they will be impacted.

Maximizing Talent in a Changing Landscape 

HR teams navigating uncertainty around executive orders must stay focused on what truly matters: ensuring they have the right talent and skills to drive performance. Now more than ever, organizations need to optimize their workforce to stay competitive.

Workforce participation is declining, skills gaps are widening, and the labor pool is shrinking. Immigration policies are also under heavy scrutiny, raising concerns about talent shortages across industries. “It’s incumbent upon every organization to make sure that we are maximizing the output of every single person within their organization,” said Oates-Forney. “If we don’t figure out how to maximize and optimize every single talent we have ... we aren’t going to win.” 

Understanding workforce skills is critical — not just for hiring, but also for upskilling and advancing current employees amid the talent shortage. Rather than simply relabeling or eliminating existing DEI programs, organizations should rethink their approach, evaluating initiatives on a case-by-case basis to ensure they deliver meaningful outcomes.

This approach to talent development allows companies to address disparities while maximizing potential. Some employee groups may require tailored programs to overcome disparities, but the goal should always be to expand opportunities for all. Data should guide these efforts, helping organizations identify gaps and implement targeted solutions. 

For example, if men and women progress differently within an organization, leadership should implement programs that bridge the gap while ensuring equal access to advancement. Ultimately, the focus should be on providing all employees with opportunities to develop their skills, contribute effectively, and drive better business outcomes.

Charting a Compliant, Inclusive Path Forward 

As the regulatory landscape continues to shift, HR leaders are tasked with ensuring their policies and programs align with both legal requirements and organizational priorities. Recent executive orders highlight the need for careful evaluation and thoughtful adaptation of workplace initiatives.

By prioritizing compliance, fostering fairness, and focusing on maximizing the potential for every employee, organizations can navigate uncertainty while continuing to build strong, resilient teams. With SHRM’s guidance and strategic frameworks, HR professionals are well-positioned to lead confidently and drive sustainable business outcomes. 

For more information on addressing these issues — including the SHRM BEAM Framework — visit SHRM’s EO Action Hub.