DEI under fire: How US policies are shaping global perspectives

‘Dangerous, demeaning and immoral.’

This is how President Trump described Diversity, Equality and Inclusion (DEI) initiatives on his first day in office as he passed an executive order to roll them back in federal government. This decision has had an immediate impact in both the US and UK. Although this position does not apply to private companies, some – including Goldman Sachs, Deloitte, Meta and Amazon – have chosen to follow suit. These changes exemplify a culture shift in the US as companies consider both customer backlash and potential legal implications.

Is this culture shift replicated in the UK?

Recent studies have suggested not. Research by Purpose Pulse found that in the UK, 68% of Gen Z and Millennials consider it important when picking a job that the company promotes diversity in its leadership (vs 57% of the same age group in the US). The same study also found that 63% in the UK vs 52% in the US believed it was important a company has dedicated career programmes to help people from underrepresented groups. The World Economic Forum has also reported that across the UK, more than half of employers in all sectors surveyed had a focus on DEI targets or training.

Employers will need to be mindful of employees having differing views in respect of DEI. This could lead to tension between employees and with an employer’s own DEI policy.

What does this mean for employers?

Legislation in the UK is moving in the opposite direction to the US. The Labour Government is in the process of introducing a variety of legislation which promotes equality in the workplace.

For example, the Employment Rights Bill will introduce liability for third party harassment unless an employer can show they took ‘all reasonable steps’ to prevent the harassment (including sexual harassment); and raise the threshold of the existing duty to prevent sexual harassment from ‘reasonable steps’ to ‘all reasonable steps’. It will also introduce a variety of ‘day one rights’ including SSP, paid bereavement leave and extend protection from redundancy for those on maternity leave. The Equality (Race and Disability) Bill will place an obligation on employers with more than 250 employees to report the pay gap within the company – building on the existing gender pay gap reporting obligation. It will also prevent employers from outsourcing services in an attempt to circumvent equal pay. The Neonatal Care (Leave and Pay) Act 2023 coming into effect in April of this year will also grant parents the right to 12 weeks’ leave and pay (if eligible) if their baby requires neonatal care.

These proposals, if implemented, will require employers to take action – something that may be made challenging by the growing rhetoric in the US and the potential for tension between employees’ views. A focus on inclusion for all can help to reduce division in the workplace. It will be even more important for employers to develop policies and procedures to ensure legal compliance and communicate their purpose clearly with staff.

If you are an employer who requires advice on any of the topics discussed above, please contact our Employment Team.