With a wave of rapid-fire executive orders and the expanding use of artificial intelligence in agency enforcement, 2026 is already shaping up to be a pivotal year in Washington. But beyond the headlines, what do these developments really mean for businesses? In the latest episode of the D.C. Download podcast, Labor & Employment Shareholder Will Vail joins for a timely discussion on what comes next. From implementation challenges and emerging litigation trends to shifting appropriations dynamics, the conversation explores how policy decisions are translating into regulatory action. The episode also offers practical, forward-looking strategies for navigating an increasingly complex and evolving regulatory landscape. Listen to the latest episode here.

What you need to know: DOL will no longer seek liquidated (double) damages in pre-litigation FLSA settlements, limiting recovery to unpaid wages. Liquidated damages still apply in court cases, so employers remain at risk in litigation. Early in the Biden administration, the Wage and Hour Division of the Department of Labor (“WHD”) issued Field Assistance Bulletin No. 2021-2 reversing practices adopted during the first Trump administration and returning to a more vigorous pursuit of liquidated damages from employers in pre-litigation investigations regarding potential violations of the Fair Labor Standards Act (“FLSA”). Now, just a few months into the second Trump administration, the WHD has reversed course again. Pursuant to Field Assistance Bulletin No. 2025-3, FAB No. 2021-2 is rescinded and the WHD will limit all pre-litigation administrative settlements to the recovery of unpaid wages or overtime compensation. It will no longer request any liquidated damages in pre-litigation investigations or resolutions. Liquidated damages are essentially “double damages,” requiring an employer that is liable for minimum wage or overtime compensation violations pay a second amount equal to the unpaid wages. In explaining this new approach, the WHD noted that Congress had “authorized” liquidated damages “only in judicial proceedings – not administrative matters” under the FLSA’s Section 216(c), which allows the DOL to “supervise the payment” of unpaid wages or overtime compensation to employees. It is the WHD’s opinion that is it “not authorized to seek liquidated as part of any payment it supervises under § 216(c).” The WHD also pointed to Section 260 of the FLSA to support its conclusion, because that Section vests courts – not the Agency – with the authority to evaluate employer’s good faith defenses that might preclude a recovery of liquidated damages. FAB 2025-3 states that “[t]he structure of § 260 reinforces that liquidated damages are a judicial remedy, and not an administrative tool available.” The practice of seeking liquidated damages in pre-litigation investigations and settlements began in 2010 under the Obama administration. While the first Trump administration attempted to rein this practice in to an extent with FAB No. 2020-2, the current stance is more aggressive. Of course, liquidated damages remain available in any litigation involving an FLSA violation – whether that litigation is brought by the WHD/DOL or a private party. For questions and assistance regarding WHD wage-and-hour investigations or other issues involving the FLSA or other wage-and-hour laws, please contact your Polsinelli attorney. 

What You Need to Know: OSHA’s Updated SST Plan Targets High-Risk Workplaces Using New Data: The revised Site-Specific Targeting (SST) Inspection Plan now relies on injury data from OSHA’s Injury Tracking Application (ITA), focusing on high-hazard, non-construction establishments with 20+ employees. Key Changes Include More Inspections and Industry Focus: The plan expands the number of inspections and emphasizes industries with high injury rates, while dropping “record-only” inspections for sites mistakenly flagged. Proactive Compliance Strategies Are Essential: Companies should prioritize accurate record-keeping, comprehensive safety training, internal audits and building a strong safety culture to ensure compliance and readiness for surprise inspections. The Occupational Safety and Health Administration (OSHA) has recently updated its Site-Specific Targeting (SST) Inspection Plan, a critical development for companies across various industries. This blog will cover the SST Plan, its recent changes, and practical steps to ensure compliance and readiness for inspections. Site-Specific Targeting Inspection Plan Explained The SST Inspection Plan is OSHA's primary method for targeting high-hazard, non-construction workplaces with 20 or more employees. The Plan uses data from the OSHA Data Initiative (ODI) to identify establishments with high rates of injuries and illnesses. By focusing on these sites, OSHA aims to reduce workplace hazards and improve safety standards. Key Changes in the Updated SST Plan There are three important changes that the updated SST Plan introduces: Data Utilization: The new plan places greater emphasis on data from the OSHA Injury Tracking Application (ITA) to identify establishments for inspection. This shift underscores the importance of maintaining accurate and timely injury and illness records. The SST Plan will select establishments for OSHA inspection based on data from Form 300A for the period 2021 to 2023. Increased Inspections: The updated plan expands the scope of inspections, potentially increasing the number of establishments subject to review. This change highlights the need for companies to be prepared for inspections at any time. But there is some good news: now, if an establishment is targeted in error, OSHA won't continue on with a "record-only" inspection. Rather, it will just leave the premises. Focus on High-Risk Industries: The SST Plan now prioritizes non-construction industries with historically high rates of workplace injuries and illnesses. HR professionals and those involved with safety initiatives in these sectors should be particularly vigilant in ensuring compliance with OSHA standards. Advice for Companies To navigate the updated SST Plan effectively, companies should consider the following strategies: 1. Maintain Accurate Records Accurate record-keeping is as crucial as ever under the new SST Plan. Companies should ensure that all injury and illness records are up-to-date and accurately reflect workplace incidents. This includes regular audits of OSHA 300 logs and ensuring that all required documentation is readily available for inspection. 2. Enhance Safety Training Investing in comprehensive safety training programs is essential. HR professionals should work with safety officers to develop training sessions that address specific workplace hazards and promote safe practices. Regular training not only helps prevent accidents but also demonstrates a company's commitment to safety, which can be beneficial during an OSHA inspection. 3. Conduct Internal Audits Regular internal audits can help identify potential safety issues before they become problems. HR professionals should collaborate with safety teams to conduct thorough inspections of the workplace, ensuring compliance with OSHA standards. These audits can also serve as a valuable tool for preparing for potential OSHA inspections. 4. Foster a Safety Culture Creating a culture of safety within the organization is perhaps the most effective way to ensure compliance with OSHA standards. Companies should encourage open communication about safety concerns and involve employees in safety planning and decision-making. Recognizing and rewarding safe practices can also motivate employees to prioritize safety in their daily activities. The Importance of Compliance Compliance with OSHA's SST Plan is not just about avoiding fines and penalties; it is about ensuring the safety and well-being of employees. By understanding the updated SST Plan and implementing the strategies outlined above, companies can play a pivotal role in creating a safer workplace. What the New SST Inspection Plan Means for Employers The updated SST Inspection Plan represents a significant shift in OSHA's approach to workplace safety. For companies, this means taking proactive steps to ensure compliance and readiness for inspections. By maintaining accurate records, enhancing safety training, conducting internal audits, and fostering a safety culture, companies can not only meet OSHA's requirements but also create a safer, more productive work environment. Polsinelli understands the complexities involved with OSHA compliance and is committed to helping employers meet their obligations efficiently and effectively. If you have questions about OSHA compliance, contact Will Vail, Harry Jones, Shivani Bailey, or your Polsinelli attorney.

As Polsinelli has discussed, President Donald Trump issued two Executive Orders, No. 14151 and No. 14173 (the “Orders”), targeting DEI (Diversity, Equity and Inclusion) programs and race- or gender-based preferences. The legal landscape surrounding these Orders continues to evolve. The Orders were initially blocked by a District Court in Maryland. However, the U.S. Court of Appeals for the Fourth Circuit reversed and allowed the Orders to remain in effect while the case was resolved on the merits. Accordingly, employers may want to evaluate whether their workplace practices, policies and/or procedures align with these Orders to mitigate potential legal risks. Additionally, employers need to stay mindful of the rights of employees who raise concerns about a business’s DEI initiatives. Employees who report potential perceived violations may be protected from retaliation, even if the Orders are eventually overturned. Employers should respond to whistleblower complaints carefully, documenting actions and maintaining communication with the reporting employee, while ensuring that any adverse employment actions are based on legitimate reasons, not retaliation. Employers should consider reviewing their complaint reporting procedures and consulting legal counsel to ensure compliance with evolving laws, fostering a workplace that supports both legal and business objectives. Read the full update.

On March 20, 2025, the Equal Employment Opportunity Commission (EEOC) released two key guidance documents focusing on DEI-related discrimination in the workplace. These documents are written as guidance for employees and outline ways the EEOC believes initiatives could lead to unlawful discrimination, including disparate treatment, reverse discrimination, segregation and harassment. The guidance stresses the importance of regular policy reviews, comprehensive training and legal consultation to navigate DEI-related challenges effectively and remain compliant with Title VII protections. Read the full update. 

On March 14, 2025, the Fourth Circuit Court of Appeals allowed the Trump administration to enforce executive orders (EOs) aimed at restricting Diversity, Equity and Inclusion (DEI) programs while litigation continues. These EOs have sparked legal challenges, with the National Association of Diversity Officers in Higher Education arguing they violate constitutional rights. Federal agencies like the Department of Education (DOE), Department of Health and Human Services (HHS) and the Equal Employment Opportunity Commission (EEOC) are actively investigating and issuing guidance to ensure compliance with the new rules, such as prohibiting the use of race in admissions and hiring decisions. Despite this, 14 state Attorneys General have pushed back, asserting that race can still be considered in admissions if it relates to a student’s personal experiences. Organizations, especially federal contractors, should consider carefully reviewing and updating their DEI policies and practices in light of these ongoing legal developments. Read the full update.

California employers received welcome reassurance last week that they are free to require employees enter into arbitration agreements as a condition of employment. This is the result of an opinion from the Ninth Circuit last week that affirmed a trial court decision that had invalidated California Assembly Bill 51 (AB 51) before it went into effect. Among other things, AB 51 sought to make it a crime for employers to require employees to agree to arbitrate claims as a condition of employment. This law, therefore, in essence, would have only allowed employers to offer voluntary arbitration agreements to employees and not allow them to make signing an arbitration agreement a condition of employment. It was well-settled that states cannot target the enforcement of arbitration agreements for special treatment. Rather, the U.S. Supreme Court has repeatedly held that arbitration agreements must be treated like any other agreement under state law. That is, if they were lawfully entered (i.e., without fraud, duress or coercion) and are for a lawful purpose, then they must be enforced. In applying this precedent to AB 51, the Ninth Circuit found that California’s attempt to target the creation rather than the enforcement of arbitration agreements was “too cute by half.” This was not the Ninth Circuit’s first bite at this apple, however. In September 2021, this same three-judge panel ruled that parts of AB 51 were NOT pre-empted by the FAA. That panel then withdrew its opinion in August 2022, shortly after the U.S. Supreme Court’s decision in Viking River Cruises v. Moriana (holding that the FAA pre-empts state laws limiting arbitration of individual PAGA claims). In issuing its new opinion, one of the judges changed his mind. This new decision is not necessarily the end of the saga for AB 51. The California Attorney General has several options. He could accept the ruling and stop trying to resurrect AB 51. He could go back to the trial court and fight to revive the law (these decisions have only been preliminary, in other words, the courts are saying that there is a “high likelihood” that the law is pre-empted). He could appeal this decision to the entire Ninth Circuit (therefore, instead of a three-judge panel hearing the matter, it would be 29 judges!). Or he could appeal to the Supreme Court. Employers should stay tuned for what happens next. What Does This Mean For Employers in California Right Now? Employers in California with existing arbitration programs that are mandatory or permit employees to opt out may continue such programs. Companies that have opted to avoid arbitration programs altogether or only provide voluntary agreements (i.e., not make signing a condition of employment) may now want to revaluate whether the time is right to implement an arbitration program. Polsinelli attorneys will continue to monitor and review emerging laws impacting arbitration programs for California employers. For individual guidance and advice, please do not hesitate to reach out to us directly.