Workforce Bulletin

Even before the 2024 presidential election and the recent wave of executive orders, employers were evaluating their positions on various social issues. Whether taking a formal stand, abstaining from a position, or landing somewhere in between, employers often consider external stakeholders and the court of public opinion. But they frequently forget about a critical and impactful audience—their employees.

Below are a few key areas where evolving social policies intersect with employee considerations.

• Environmental, Social, and Governance (ESG) Policies: Regulations around diversity, equity, and inclusion; sustainability; the environment; and financial investments can differ across federal, state, and local jurisdictions, and certain rules apply only to government contractors. Aside from legal concerns, employers may face public and private questions about their actions or policies from employees. As such, employers should make sure that their ESG policies are current, thoughtful, and well communicated, especially in light of changing public sentiment, regulations, and legislation.

On October 30, 2020, the Department of Labor (DOL) adopted the Final Rule amending the Investment Duties DOL Regulation, §2550.404a-1, which governs the obligations of ERISA fiduciaries when selecting investments for ERISA plans.  The Final Rule made several changes to the June 2020 Proposed Rule, which proposed to define the duties of fiduciaries when considering investments that promote environmental, social, and corporate governance goals (ESG investments).  As reported here, DOL received extensive and largely negative comments to the Proposed Rule and most of the ...