Compliance Stuff

In a ruling significant to federal contractors and government transparency advocates alike, the U.S. Court of Appeals for the Ninth Circuit has affirmed a district court order requiring the U.S. Department of Labor (DOL) to disclose thousands of EEO-1 Type 2 (consolidated) reports submitted by federal contractors, rejecting the agency’s attempt to withhold the reports under the Freedom of Information Act’s (FOIA) Exemption 4. Quick Hits The Ninth Circuit ruled that EEO-1 Type 2 workforce demographic data is not protected “commercial” information under FOIA Exemption 4 and must be disclosed. For contractors that objected, contending the reports contained confidential commercial information, the reports are now likely subject to disclosure; the court did not address other objections based on contractor status or jurisdiction. The decision applies only to historical reports submitted to the DOL from 2016 to 2020 in response to FOIA requests by the Center for Investigative Reporting, but t...

The Iowa drug testing statute (Iowa Code § 730.5) became more employer friendly effective July 1, 2025. Although the Iowa drug testing law remains one of the most technically challenging in the country, the  changes  will make it easier for employers to defend lawsuits. Burden of Proof The Iowa drug testing law previously required employers to prove that the requirements of the drug testing law were met in the event an employee alleged a violation . The amendments state that an aggrieved employee or applicant “has the burden of establishing by a preponderance of the evidence that a violation … directly caused any damages for which affirmative relief is sought.” The amendments provide that “[a]n employer” who violates the law or aids in the violation is liable to an aggrieved employee or prospective employee. Previously, the law permitted claims against “[a] person” who violated the law or aided in the violation. The amendments also qualify that attorney’s fees awarded to an ...

At a Glance Revisions to Title 2 of the California Code of Regulations will govern the use of AI-based tools in California starting October 1, 2025. Among other things, the regulations define the scope of AI-driven (and other) automated decision-making systems (ADS), clarify what constitutes discriminatory use of ADS, require anti-bias testing of ADS, impose new recordkeeping requirements, and discuss affirmative defenses to employer liability. The final regulations are less burdensome than the original draft, but still impose several new compliance requirements for employers. On June 30, 2025, the California Civil Rights Council (“CRC” or “Council”) secured final approval for revisions to Title 2 of the California Code of Regulations, which governs administration of the California Civil Rights Department (CRD). These regulations interpret California’s Fair Employment and Housing Act’s (FEHA) prohibitions against discrimination in recruitment, hiring, promotion, training and terminatio...

In a significant policy shift, the IRS has revised Form 14457, Voluntary Disclosure Practice Preclearance Request and Application, the cornerstone of its Voluntary Disclosure Practice (VDP), by removing the controversial “willfulness checkbox.” This change, effective with the July 2025 version of the form, marks a major win for taxpayers and tax professionals who have long criticized the checkbox as a deterrent to participation in the program.   In short, the removal of the willfulness checkbox from the updated VDP form incentivizes taxpayers who were previously wary about admitting that they had willfully failed to disclose information to the IRS to – after consultation with their advisors and attorneys – reconsider whether entering VDP is a viable and wise option in their situation. Background: The Role of Form 14457 Form 14457 is used by taxpayers seeking to voluntarily disclose previously unreported income or tax noncompliance in order to avoid criminal prosecution. The form op...