The Trump Administration began reviewing the DEI programs of government contractors and those employers who have been awarded grants or who legally get favorable tax treatment, with an eye to cutting support should they uncover nonconforming policies. Programs for diversity, equality and inclusion (DEI), something seen as a strength for many businesses, became a liability almost overnight after the inauguration. Prior to this administration, companies would proudly proclaim their diverse sources for products and services, and how they had programs assisting workers from traditionally marginalized communities in their hiring and careers. Now, the White House wants not only the wording of the policies to change, but has pledged to prosecute those who continue what it deems illegal favoritism by race, gender, or sexual orientation. Transgender soldiers are now banned from military service. For payroll, there has been a trickle-down impact as HR operations pivot, restructure and lay off those in official DEI positions so their employers are
seen as conforming. Employers deciding not to take such actions could be subject to increased federal tax and labor law audit activity. In 2026, the current administration will continue to steer policy with quick, sometimes unexpected, actions that can impact payroll operations for many employers in the U.S. Congress and the courts may increase their ability to check some of what is being called executive overreach, but so far have been toothless in modifying the White House’s pursuit of its agenda. For payroll, there has been a trickle-down impact as HR operations pivot, restructure and lay off those in official DEI positions so their employers are seen as conforming.
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ISSUE 19 GLOBAL PAYROLL MAGAZINE
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