DEI Compliance Challenges for Multinational Employers: When U.S. and International Laws Diverge

The anti-DEI stance taken by the current administration and propounded through executive orders and agency guidance (e.g., EEOC and DOJ) creates compliance challenges for multinational employers—whether U.S. based companies with employees in other countries or non-U.S. based companies with employees in the U.S—who may be required by laws in other countries to incorporate DEI initiatives in the workplace.

In the U.S., executive orders and agency guidance under the Trump administration have made it clear that protected characteristics like sex and race cannot be used as a basis for preferential treatment in employment actions and opportunities. This may conflict with laws in other countries that require employers to measure certain characteristics to reach targeted policy measures. 

For example, the EU's Gender Balance on Corporate Boards Directive seeks a more balanced representation of women and men in corporate management bodies and requires at least 40% of non-executive directors and 33% of all directors in covered companies to be held by members of the underrepresented gender group by June 30, 2026. Additionally, the EU's Corporate Sustainability Reporting Directive (CSRD) obliges covered employers to report on various sustainability measures including equality, non-discrimination, diversity, and inclusion.

Non-European countries have enacted pro-DEI initiatives as well. For instance, Japan has passed laws requiring employers to put certain measures into place to achieve the government's stated goal to achieve at least 30% female representation in managerial and executive positions by 2030. And the Canadian province of British Columbia has enacted gender-based pay transparency requirements triggered by employee headcount thresholds. Other provinces are developing similar laws.

Counsel should understand how to guide their multinational employer clients through this regulatory minefield so they may remain compliant in all jurisdictions in which they have an employee presence, which may mean strategizing to create policies with a more targeted, jurisdictional-based DEI approach rather than uniform policies with a global reach.

Listen as our expert panel examines the DEI conundrum facing multinational employers. The panel will compare current U.S. anti-DEI initiatives against pro-DEI trends in other countries and discuss best practices for helping these employers create compliance strategies.