In the Workplace 2025: How the Second Trump Administration is Impacting the Workplace

This is part of a series of articles by Wright Lindsey Jennings’ labor and employment team examining key trends for employers and the workplace in 2025, authored by attorney Stuart Jackson. The series was originally featured in Arkansas Business and this article has been updated here with additions from authors Jane Kim and Daveante Jones.

Hang on to your hats — a lot is going to take place in the next couple of years in the employment world after the transition from the Biden administration to the Trump administration.

Department of Labor Wage and Hour Issues

Two immediate wage and hour issues come to mind for 2025 — first, the status of the 2024 Department of Labor (DOL) salary rule that raised the minimum salary for the white-collar exemptions to $844 per week ($43,888 annually) effective July 1, 2024, and $1,128 per week ($58,656 annually) effective Jan. 1, 2025; and second, the Department of Labor’s rule on who is and who is not an independent contractor.    

The first issue — the 2024 DOL rule raising the white-collar exemptions’ minimum salary amounts under the Fair Labor Standards Act (FLSA) — is a huge mess. 

Almost immediately after the 2024 rule was issued, it was challenged in federal courts in Texas and Washington, D.C. While some limited injunctive relief was issued during the summer, nothing stopped the implementation of the rule on a nationwide basis. So, employers either raised the minimum salaries of the white-collar exempt jobs or reclassified those jobs as non-exempt/eligible for overtime, and started planning for the Jan. 1, 2025 raise in salary. 

Shoot forward to Nov. 15 when a federal judge in Texas struck the 2024 DOL rule in its entirety, taking out both salary increases. There’s been no word from the D.C. court, although summary judgment motions have been filed by both sides as of mid-December.  

What we see potentially happening is the Trump Administration not appealing the Texas ruling, allowing the 2024 DOL salary rule to die unless something unexpected happens in the DC court. The question for employers then becomes what to do with those exempt employees who received salary increases in July 2024. Our take: reverting back to the lower salary level would be problematic for a variety of legal reasons, as well as non-legal reasons, such as worker morale.

Another change we anticipate is a new rule from the DOL on who is and who is not an independent contractor (for purposes of minimum wage and overtime) under the FLSA. 

Just before Trump left office, the DOL issued a rule on independent contractors that focused on two things: the nature and degree of control by the business over the work and the worker’s opportunity for loss and profit. Secondary factors included the amount of skill required for the work and the degree and permanence of the working relationship between the business and the worker. The overall effect of the rule made it a bit easier to classify someone (especially a “gig” worker) as an independent contractor in the eyes of the DOL under the FLSA. But the Biden administration rescinded the rule.  

Look for the second Trump administration DOL to dust off that rule and reintroduce it, but (please) don’t see this as open season to reclassify your current or future employees as independent contractors. While courts might look to DOL rules for guidance, courts make the final call on who is or is not an independent contractor under the FLSA. And you still have to worry about how the IRS and other government agencies interpret their own independent contractor rules.

The final things we might see from the Trump administration in terms of wage and hour issues is a push to make tip and overtime wages tax free. We’ll see if those promises were just campaign banter or if the Trump administration is serious about them. If it is serious, one wonders if certain Republican members of Congress would go along with something that might increase the deficit even more.

The Federal Trade Commission’s Noncompete Rule

Another federal agency took it on the chin in 2024, impacting what employers can do with non-compete agreements in 2025. 

The Federal Trade Commission’s (FTC) noncompete rule that was set to go into effect on Sept. 4, 2024, would have done two things: 

• Prohibited employers from entering into noncompete agreements with workers.

• Invalidated the majority of existing noncompete provisions in employment agreements with workers, with workers including full-time and part-time employees, independent contractors, interns, externs, volunteers, and apprentices.

Although multiple lawsuits were filed challenging the rule,  federal courts in Florida and Texas threw out the rule on a nationwide basis before the rule took effect, holding that the FTC exceeded its statutory authority (see Ryan LLC v. Federal Trade Commission and Properties of the Villages, Inc. v. Federal Trade Commission). The FTC appealed both rulings. In early January, it filed an appeal brief in the U.S. Fifth Circuit Court of Appeals shortly before President Trump’s inauguration. Since President Trump has been in office, the administration has made a number of changes to FTC leadership. Then-member Andrew N. Ferguson was named Chairman of the Commission on President Trump’s first day in office and he recently fired two Democrat commissioners.

In the midst of the leadership change, the FTC filed motions for a 120-day stay of its challenges of both the Florida and Texas decisions. Accordingly, all signs are pointing to the FTC rule dying the same potential death as the 2024 DOL rule on salary levels. 

But even with the apparent death of the FTC’s noncompete rule, there seems to be a growing movement to limit noncompete agreements, even here in Arkansas. On March 4, 2025, Arkansas Governor Sarah Huckabee Sanders signed a law amending the state’s non-compete statute to provide that non-compete covenants that “restrict the right of a physician to practice within the physician’s scope of practice” are void. The law will likely take effect in July 2025.  

We will continue to monitor any Arkansas state or federal legislation on the topic, and if any appear likely to succeed, we’ll pass along any pertinent information. 

The National Labor Relations Board

There’s no better example of how the pendulum swings back and forth between Republican and Democratic administrations than the guidance and opinions that come out of the National Labor Relations Board’s (NLRB) interpretation of the National Labor Relations Act (NLRA).  And starting in 2025 or 2026, expect that guidance and those opinions to swing back in favor of employers, starting with the firing of the current general counsel for the NLRB, a Biden appointee.

So, what does the NLRA do?  It generally protects your non-management employees by allowing them to discuss the terms and conditions of their employment and advocate for their mutual aid and protection, something referred to as protected concerted activity.  

Where could we see significant shifts that will impact Arkansas businesses when it comes to the NLRA?  Definitely in the area of common-sense workplace rules that may impact an employee’s rights under the NLRA.  During the first Trump administration, workplace rules that were generally considered lawful by the NLRA included neutral rules that prohibit “behavior that is rude, condescending or otherwise socially unacceptable”; “disparaging or offensive behavior”; and behavior that creates “discord with clients or fellow employees.” 

The Biden NLRB took a more pro-employee approach to workplace rules, stating such rules must be “narrowly tailored” and “advance a legitimate and substantial business need.”  Any interference with rights of an employee under the NLRA was presumptively unlawful, and it was the employer’s burden to show special circumstances to demonstrate the rules was necessary. So, a rule that might have survived under the Trump NLRB during his first administration — such as one that leads to the termination of an employee for unprofessional conduct toward other employees while arguably advocating for better terms and conditions of employment — likely would have gotten struck by the Biden NLRB.

What happens now? President Trump wasted no time in changing leadership as he removed previous General Counsel Jennifer Abruzzo and NLRB Board Member Gwynne A. Wilcox in the weeks following his inauguration. This left the Board with only two members and no quorum. He then appointed William B. Cowen as Acting General Counsel of the NLRB on February 3, 2025. Wilcox’s removal was an unprecedented move and the administration is currently in a legal battle with Wilcox to determine whether President Trump acted illegally in removing her. Wilcox won the first round on March 7, 2025, when a federal judge out of the U.S. District Court of the District of Columbia reinstated Wilcox as a member. That decision has been appealed to the U.S. Court of Appeals for the D.C. Circuit and is now under review.

In the meantime, on February 14, 2025, the NLRB’s Acting General Counsel William B. Cowen issued a memo to all field offices rescinding several memoranda issued by the former General Counsel asserting stances on available remedies, rights of student-athletes under the NLRA, electronic monitoring, severance agreements and non-compete agreements. More changes are likely on the way but currently delayed by the fact that the Board is operating without a quorum and is limited in the development of the law and new policy until a quorum is restored.

The EEOC’s Guidance on Workplace Harassment and The Pregnant Workers Fairness Act

Among the numerous executive orders issued by President Trump on his first day in office is an order declaring that the federal government will recognize only two biological sexes, male and female, as determined at conception (officially titled, “Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government”).

The executive order expressly states that “sex” is not a “synonym for and does not include the term ‘gender identity’” and, in part, directs:

• All federal agencies to use the term “sex” and not “gender” in applicable policies/regulations and official documents;
• The Attorney General to issue guidance to federal agencies to correct the misapplication of the Supreme Court’s decision in Bostock v. Clayton County (that Title VII’s sex discrimination protections also cover sexual orientation, gender identity, and transgender status) in agency activities;
• The Equal Employment Opportunity Commission (EEOC), the Department of Labor, and other federal agencies to prioritize investigations and litigation to enforce the rights and freedoms identified in the order; and
• All agency heads to promptly rescind all (or any parts of) guidance documents that are inconsistent with the order, including the EEOC’s 2024 workplace harassment guidance which, among other things, prohibited the misuse of pronouns and required employers to allow employees to use bathrooms that corresponded with their gender identity.

The day after the executive order’s issuance, the EEOC’s newly-appointed Acting Chair Andrea Lucas made clear that one of her top priorities includes “defending the biological and binary reality of sex and related rights, including women’s rights to single‑sex spaces at work.”

While employers can expect to see a shift in the EEOC’s enforcement of gender identity workplace protections, revoking prior approved guidance and instituting new guidance requires a quorum—which the EEOC currently lacks after President Trump unexpectedly removed two Commissioners in late January, leaving the Commission with only two members (and short one member required for a quorum). So, exactly when and how that shift will officially be implemented remains to be determined. For now, employers should keep in mind that federal law still prohibits discrimination based on transgender status, gender identity, and/or gender expression.

As for the Pregnant Workers Fairness Act (PWFA), no one will be shocked if the EEOC modifies or rescinds its applicability to abortion-related care, assuming the current court challenges don’t beat the EEOC to the punch. The PWFA went into effect in June 2024 and requires covered employers to reasonably accommodate pregnancy and childbirth-related conditions. The EEOC’s final rule requires workplace accommodations for employees having abortions. Given that Acting Chair Lucas voted against the final rule at the time, an EEOC policy shift on the PWFA’s abortion accommodations seems inevitable.

The EEOC’s Guidance on What Constitutes Unlawful DEI-Related Workplace Discrimination

On March 19, 2025, the Equal Employment Opportunity Commission (EEOC) issued guidance detailing the agency’s view on discrimination related to diversity, equity, and inclusion (DEI) programs and practices in the workplace: What You Should Know About DEI-Related Discrimination at Work and What To Do If You Experience Discrimination Related to DEI at Work. The guidance provides some clarity to those employers struggling to understand what constitutes “illegal DEI” under President Trump’s recent DEI-focused executive orders, which are being challenged in court. 

The EEOC guidance explains that any “employment action motivated—in whole or in part—by an employee’s race, sex, or another protected characteristic” may be unlawful under Title VII and provides the following examples of unlawful DEI-related workplace discrimination:

• The use of quotas and other “balancing” efforts.
• Disparate treatment in various aspects of employment, including the selection of interviewees and hiring/firing, promoting/demoting, or compensating employees; offering fringe benefits; and providing access to training, mentoring or sponsorship programs, or fellowships.
• Limiting membership in workplace groups, such as affinity groups, or separating employees into groups based on protected traits when administering DEI or other trainings, even if the content is the same.
• Unlawful harassment during DEI training—i.e., harassment that results in an adverse change to a term, condition, or privilege of employment, or is so frequent or severe that a reasonable person would consider it intimidating, hostile, or abusive.
• Retaliation for objecting to or opposing employment discrimination related to DEI, participating in employer or EEOC investigations, or filing an EEOC charge. “Reasonable opposition to a DEI training may constitute protected activity” that would prohibit employer retaliation.

The guidance also emphasizes the EEOC’s long-standing position that “there is no such thing as ‘reverse’ discrimination; there is only discrimination.” According to the EEOC, Title VII’s protections “apply equally” to all employees and applicants, and not just those who belong to a minority group or are diverse, historically under-represented, or women. The guidance cautions that an employer’s business interest in “diversity” (including client/customer preference) does not justify making employment decisions motivated by a protected characteristic. 

While the long-term impact of President Trump’s DEI-related executive orders is uncertain at this point, employers should regularly review and update their DEI programs and policies to ensure compliance with Title VII. 

Public employers in Arkansas should also take proactive steps to align their DEI practices with the new state law prohibiting employment discrimination or “preferential treatment” on the basis of race, sex, color, ethnicity, or national origin. Act 116 (formerly Senate Bill 3) was signed into law on February 18th and will likely take effect in July 2025.

WLJ will continue to monitor developments on this evolving topic and provide updates as new information becomes available.