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The April 2026 employment law update highlights a sharp turn in federal enforcement priorities, as agencies tighten scrutiny on joint employment liability, DEI practices, and federal contractor compliance – reshaping the legal risk landscape for employers across industries. Get the latest below.

DOL Unveils Revised Joint Employer Rule to Clarify Shared Liability for Wage and Hour Violations

The U.S. Department of Labor announced this month a newly proposed rule on joint employer liability that more detailed guidance on how businesses would be evaluated when determining responsibility for wage and hour violations under federal labor laws. The rule applies to the Fair Labor Standards Act (FLSA), the Family and Medical Leave Act (FMLA), and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA), and is intended to clarify when multiple employers may be held jointly liable for unpaid wages, overtime violations, or leave-related obligations.

The proposal distinguishes between two forms of joint employment: horizontal and vertical. Horizontal joint employment occurs when a worker has separate employment relationships with two or more related employers that are sufficiently associated with one another. For example, if two restaurants share ownership, management, or scheduling authority, an employee working for both may be considered jointly employed. In such cases, the Department would examine whether the employers coordinate operations, share supervisors, or have overlapping control over employment decisions.

Vertical joint employment applies when a worker is formally employed by one company, such as a staffing agency or subcontractor, but another business exercises significant control over the employee’s work. To determine this, the rule outlines four main factors: the ability to hire or fire the worker, supervision and control over work schedules or conditions, authority over pay and compensation methods, and maintenance of employment records.

Unlike the 2020 Trump-era rule, the new proposal allows courts and investigators to consider indirect or even potential control, not just direct actions taken by the employer. It also removes strict limits on considering economic dependence, meaning broader workplace realities may influence decisions. This approach aims to improve legal defensibility while still giving employers clearer compliance standards.

Latest EEOC Report Signals Shift Toward DEI Scrutiny, Pre-Litigation Settlements, and AI Adoption

The U.S. Equal Employment Opportunity Commission’s 2025 performance report issued this month reveals a major shift in enforcement priorities under President Donald Trump’s administration, signaling a stronger focus on workplace diversity, equity, and inclusion (DEI)

programs, religious discrimination, and what the agency calls discrimination against American workers.

The report highlights the agency’s efforts to challenge DEI initiatives it considers unlawful, mentioning DEI 14 times and emphasizing “anti-American bias” in hiring practices. One example was a $1.4 million consent decree involving LeoPalace in Guam, where the EEOC alleged foreign-preference discrimination.

The agency also reported recovering $660 million for nearly 17,700 workers facing workplace discrimination, with $528 million secured before litigation through mediation, conciliation, and settlements—the highest pre-litigation recovery in its history. This signals stronger pressure on employers during investigations before lawsuits are filed.

Additionally, the EEOC is expanding its use of technology, including texting platforms and artificial intelligence tools like Microsoft 365 Copilot, to improve communication, legal research, and case preparation.

The report reflects a broader philosophical realignment at the EEOC, with less emphasis on traditional civil rights protections for LGBTQ+ employees and a greater focus on scrutinizing workplace policies involving immigration and hiring preferences.

DOJ Secures $17M IBM Settlement in First False Claims Act Case Targeting DEI Policies

IBM has agreed to pay $17 million to settle allegations brought by the U.S. Department of Justice that it violated the False Claims Act through diversity, equity and inclusion (DEI) initiatives tied to its federal contracting work. The Justice Department, under the Trump administration, said the settlement is the first under a new enforcement initiative targeting DEI-related practices in companies receiving federal funds.

Officials alleged that IBM engaged in discriminatory policies by linking bonus compensation to workforce demographic targets, adjusting interview eligibility based on race or gender, and setting diversity goals for business units. The government also claimed the company offered training, mentoring, and leadership opportunities on the basis of protected characteristics rather than merit.

IBM did not admit liability and denied wrongdoing but agreed to settle and pay the penalty while also modifying or eliminating the contested policies. A company spokesperson said IBM’s hiring and promotion strategy is based on ensuring employees have the skills required by clients.

The Justice Department framed the case as part of a broader effort to ensure federal contractors do not use taxpayer-funded work to support what it described as unlawful DEI practices. The initiative follows a 2025 directive allowing False Claims Act enforcement against contractors alleged to engage in discriminatory diversity programs.

The settlement also reflects a wider political and legal campaign by the administration to restrict DEI programs in both government and private-sector contracting, alongside increased scrutiny of firms and institutions with diversity-focused policies.

Jeff Burke is an attorney at MacElree Harvey, Ltd., working in the firm’s Employment and Litigation practice groups. Jeff counsels businesses and individuals on employment practices and policies, executive compensation, employee hiring and separation issues, non-competition and other restrictive covenants, wage and hour disputes, and other employment-related matters. Jeff represents businesses and individuals in employment litigation such as employment contract disputes, workforce classification audits, and discrimination claims based upon age, sex, race, religion, disability, sexual harassment, and hostile work environment. Jeff also practices in commercial litigation as well as counsels businesses on commercial contract matters.  

MacElree Harvey is proud to announce that Partner Caroline G. Donato has been named a 2026 VISTA Today NextGen Superstar, recognizing emerging leaders making a meaningful impact in their professions and communities.

Caroline focuses her practice on criminal defense, representing clients and safeguarding their constitutional rights.

“I believe there is no greater professional responsibility than to protect an individual’s freedom, livelihood, and reputation,” Caroline said. 

A lifelong member of the Wayne community, Donato graduated from Radnor High School, the University of Pittsburgh, Widener University Delaware Law School, and later earned an LL.M. in Trial Advocacy from Temple University Beasley School of Law.

Her path into criminal defense was deeply influenced by her father, Arthur T. Donato, Jr., a respected Attorney in the same field. 

“I grew up watching him practice as if he was enjoying a hobby rather than having a job,” she said. “He introduced me early on to this world of protecting individuals when they need it most.”

Donato says that her proudest moments in her career are tied to the outcomes she secures for her clients.

“I feel the most pride when I do my best for a client and they secure a fantastic result,” she said.

Donato will be honored alongside the 2026 class of VISTA Today NextGen Superstars on April 30 at the Penn State Great Valley Conference Center in Malvern.

MacElree Harvey is proud to share that Carolina Heinle, Equity Partner in the firm’s Estate Planning and Administration practice, has been featured in the Philadelphia Business Journal as part of its Women in Law series.

In the feature, Carolina reflects on what drives her work:

“Being with my clients as they experience life’s milestones is a privilege that I will never take for granted.”

A Personal Approach to Estate Planning

Carolina’s practice is rooted in relationships, not just legal strategy. With an academic background spanning Haverford College, Yale University Divinity School, and Villanova University Charles Widger School of Law, she brings a strong foundation in ethics and a deep respect for each client’s individual story.

She advises individuals and families across Pennsylvania and Delaware on estate planning, tax strategy, business succession, and estate administration – always with a focus on long-term relationships and thoughtful guidance.

Experience That Resonates with Clients

With more than 15 years of experience, Carolina is recognized by Best Lawyers and Delaware Today as a Top Lawyer. As a mother of four and equity partner at MacElree Harvey, she understands firsthand the balance many of her clients are working to achieve.

Her inclusion in the Philadelphia Business Journal’s Women in Law feature reflects not only her technical skill, but her commitment to helping families plan with clarity, confidence, and care.

Learn more about Carolina Heinle and MacElree Harvey’s Estate Planning services at macelree.com/attorney/carolina-heinle.

In the March 2026 update, we see employers facing legal uncertainty as regulators and courts redefine compliance boundaries, from workplace benefits and data security to wage rights. Read the details below:

Data Breach Lawsuit Against Philadelphia Aging Nonprofit Highlights Rising Employer Liability Risks

The Philadelphia Corporation for Aging is facing a proposed class action lawsuit alleging it failed to adequately protect employees’ sensitive personal information, leading to a significant data breach. The complaint, filed in the Court of Common Pleas of Philadelphia County by Carl Dunbar, claims the nonprofit’s negligence exposed workers’ personally identifiable information (PII) to cybercriminals.

According to the lawsuit, the breach was detected in July, but affected employees were not notified until November, leaving them vulnerable to identity theft and financial harm for months. The compromised data reportedly includes Social Security numbers, financial account details, medical information, and other highly sensitive records.

Dunbar alleges that PCA failed to implement reasonable cybersecurity safeguards and did not disclose the root cause of the breach, further compounding the harm. The suit also claims the organization violated its contractual obligations to employees by not securing their data.

The complaint warns that the stolen information could circulate on the dark web or be used for fraud and unauthorized purposes. Plaintiffs argue the breach could have been prevented with stronger security measures or by limiting the storage of sensitive data.

For employers, the case underscores growing legal and reputational risks tied to data security. Companies are increasingly expected to adopt robust cybersecurity practices, minimize the collection and retention of sensitive information, and provide timely breach notifications. Failure to do so may not only trigger litigation but also erode employee trust and invite regulatory scrutiny.

New Jersey Supreme Court Rules Wage Laws Protect Unauthorized Workers

The Supreme Court of New Jersey unanimously ruled that workers are entitled to wages under state law regardless of immigration status, reinforcing broad protections under New Jersey’s wage and hour statutes. The decision revived a lawsuit filed by Sergio Lopez, who sought unpaid wages from Marmic LLC after performing work as a superintendent. The court remanded the case to determine damages, overturning a lower court ruling that had dismissed his claim.

The justices held that the Immigration Reform and Control Act does not prohibit employers from paying undocumented workers for labor already completed. They emphasized that denying such wages would undermine both federal and state law by incentivizing employers to exploit

undocumented workers. Under New Jersey law, Lopez qualified as an employee and was therefore entitled to compensation for services rendered.

The court also rejected arguments that Lopez’s use of an invalid Social Security number invalidated his claim, stating that wage protections apply even when workers lack proper documentation. Additionally, the court distinguished the Hoffman Plastic Compounds Inc. v. NLRB decision, clarifying that it applies only to back pay for work not performed, not unpaid wages for completed labor.

EEOC Upholds Limits on Gender Dysphoria Coverage, Citing Supreme Court Precedent

The U.S. Equal Employment Opportunity Commission (EEOC) ruled in a 2–1 decision that the Office of Personnel Management did not violate federal civil rights laws by allowing health plans to limit coverage for gender dysphoria treatments. The majority based its reasoning on a recent U.S. Supreme Court ruling in United States v. Skrmetti, which upheld Tennessee’s restrictions on gender transitioning medical care for minors. The EEOC concluded that decisions based on medical diagnoses like gender dysphoria are not inherently discriminatory under Title VII of the Civil Rights Act.

The ruling overturns a prior EEOC decision that had found OPM’s policies unlawful. Commissioners Andrea Lucas and Brittany Bull Panuccio formed the majority, emphasizing that OPM acted rationally in balancing cost, medical considerations, and insurer discretion. They also rejected claims under the Rehabilitation Act, citing a safe harbor provision.

Dissenting Commissioner Kalpana Kotagal argued the decision undermines transgender protections and misapplies precedent, including Williams v. Kincaid. She criticized the majority’s reasoning and language, calling it inconsistent with civil rights principles and medical consensus.

The case is Sam T. et al. v. Scott Kupor before the U.S. Equal Employment Opportunity Commission.

Jeff Burke is an attorney at MacElree Harvey, Ltd., working in the firm’s Employment and Litigation practice groups. Jeff counsels businesses and individuals on employment practices and policies, executive compensation, employee hiring and separation issues, non-competition and other restrictive covenants, wage and hour disputes, and other employment-related matters. Jeff represents businesses and individuals in employment litigation such as employment contract disputes, workforce classification audits, and discrimination claims based upon age, sex, race, religion, disability, sexual harassment, and hostile work environment. Jeff also practices in commercial litigation as well as counsels businesses on commercial contract matters.  

MacElree Harvey is proud to recognize Personal Injury Partner Tim Rayne on a remarkable achievement: publishing 500 videos on YouTube.

Since launching his channel in 2012, Tim has consistently created educational video content designed to help individuals and families better understand their legal rights, make informed insurance decisions, and navigate the complexities of personal injury claims. His work reflects a long-standing commitment to making legal information accessible, practical, and engaging.

“My focus has always been ‘what is in it for the viewer,’” Tim explains. “My goal has been to provide informative and entertaining content.”

Over the years, Tim’s channel has covered a wide range of topics relevant to everyday life and unexpected events, including:

• The most important car insurance choices to protect your family
• What to do immediately after a car accident
• Who pays medical bills following an injury
• What makes a strong medical malpractice case
• Steps to take after a slip and fall accident

In addition to standalone videos, Tim has developed several popular series, such as Don’t Do That Sht*, How Not to Get Sued, and Who’s Fault Is It, offering clear, real-world guidance in a straightforward and often approachable style.

While much of his content is educational, Tim has also shown a creative side. One of his most popular videos: The Bow Tie Lawyer Teaches You How to Tie a Bow Tie, highlights his personality and ability to connect with viewers beyond traditional legal topics.

Reaching 500 published videos is a rare milestone, achieved by a very small percentage of content creators. Tim credits both his enjoyment of the creative process and the strong engagement he receives across platforms.

“I really enjoy the creative process and get a lot of comments from people who see the videos, not only on YouTube, but also on LinkedIn, Instagram, Facebook, and TikTok,” he says. “I plan to get to 1,000 much quicker than I got to 500.”

Tim’s ongoing commitment to sharing knowledge aligns with MacElree Harvey’s mission to provide meaningful guidance and trusted counsel to the communities we serve.

To follow Tim’s content, subscribe to his YouTube channel (@TimRayne) or connect with him on LinkedIn, Instagram, Facebook, and TikTok (@bowtielawyer), or visit macelree.com/attorney/timothy-f-rayne to learn more.

West Chester, PA — MacElree Harvey is pleased to announce that Andrew R. Silverman has been elected a Shareholder of the firm. An experienced member of the firm’s Business Department since 2014, Andrews’s election marks a significant milestone in his career and a commitment to the firm’s leadership in business and tax law.

Andrew focuses his practice on advising business owners and stakeholders through every stage of the corporate lifecycle to maximize growth and efficiency. Andrews’s practice areas include mergers and acquisitions, navigating intercompany disputes, corporate governance, business tax, and facilitating strategic structuring and restructuring of entities.

“Andrew’s election to Shareholder is a well-earned milestone that reflects his deep commitment to our clients and to our firm,” CEO Michelle Foster noted. “Andrew has earned the trust of his clients and colleagues through his dedication, integrity, and steady leadership. Beyond his experience and skill in corporate and tax law, Andrew embodies the values of MacElree Harvey. We are genuinely excited for the leadership and vision he brings to our partnership as we look toward the firm’s future.”

A native of the region, Andrew is uniquely positioned to serve clients across state lines, holding licenses to practice in both Pennsylvania and Delaware. Andrew is a graduate of the University of Pittsburgh and Widener University School of Law, and he earned his Master of Laws (LLM) in Taxation from the Villanova University Charles Widger School of Law.

About MacElree Harvey, Ltd.

Founded in 1880, MacElree Harvey, Ltd. is a full-service law firm serving individuals, families, and businesses throughout Pennsylvania and Delaware. The firm provides counsel across a wide range of practice areas, including business law, litigation, estate planning, real estate, family law, and employment law. Contact the firm at macelree.com/contact-us or call (610) 436-0100.