Putting U.S. DEI Shifts into a Global Context

Prior to the present hostile environment for DEI - exacerbated even further by the current Trump administration - the U.S. was a global leader in advancing DEI initiatives. As the U.S. reverses its stance, companies in the UK, EU, and parts of Latin America and Asia face mounting pressure to strengthen their own DEI initiatives.

Where global DEI policies are gaining ground:

• The UK government has proposed a draft Equality Bill requiring employers with 250+ employees to publish disability and ethnicity pay gaps.

• In the EU, large-listed companies must meet new gender quotas for Board representation, and the new EU Pay Transparency Directive mandates disclosure of pay data and actions to address gender disparities.

• Brazil’s pay transparency law requires companies with 100+ employees to disclose gender pay gap data twice per year and enforce a hiring quota for persons with disabilities (2%-5% depending on company size).

• Australian employers with 100+ employees must report gender pay gaps to the government, which now makes the data publicly accessible.

• In Japan, companies with 301+ employees must report their gender pay gaps, though no penalties exist for failing to address them.

• Mexico is considering a proposal requiring companies with 20+ employees to hire a set percentage of older workers.

Why it matters: DEI efforts abroad are often influenced by a company’s U.S. headquarters. As businesses consider scaling back U.S. DEI initiatives in the face of mounting pressure, global investments, resources, and funding for such efforts may also be impacted. CHROs based in the U.S. and overseeing global teams must navigate the challenge of ensuring fairness while adhering to varying local rules and expectations. 

Key takeaways for employers:

Review DEI compliance globally: In addition to complying with U.S. laws and adapting to changing rhetoric, global employers must comply with local laws.

Navigating employee sentiments: Employees worldwide may hold diverse and even contradictory views on DEI. Effective listening and communication is crucial to enhancing employee engagement.

Risks of abandoning global diversity goals, DEI training: Some employers might consider cutting all of their DEI initiatives. However, because of the distinct political and regulatory paths in the UK, EU, and certain regions in Asia and Latin America, abandoning DEI efforts entirely would pose significant risks on a global scale.