August 14, 2026 | Posted By: Sean Estes
A quiet but significant shift is underway in how the federal government enforces anti-discrimination law, and it could change the rules for employers and employees alike. Over the past year, several federal agencies have moved to eliminate what is known as “disparate impact” liability from their regulations. The latest came in late June 2026, when the U.S. Department of Veterans Affairs proposed scrapping disparate-impact provisions from its rules, arguing they sit in “considerable tension” with the Constitution.
If you run a business or work for one, you may be wondering what “disparate impact” even means and whether any of this affects you. Below, we break down the concept, the recent changes, and what they could mean for workplaces going forward.
What “Disparate Impact” Actually Means
Most people understand discrimination as intentional: an employer who refuses to hire someone because of their race, or who fires a worker because she is pregnant. The law calls this “disparate treatment,” and it has always been prohibited.
Disparate impact is different. It targets policies that look completely neutral on their face but end up disproportionately harming a protected group in practice. A classic example is a physical strength test for a desk job that has nothing to do with lifting. The test applies to everyone equally, but it may screen out far more women than men, and if it is not actually necessary for the job, it can be unlawful even though no one intended to discriminate.
The idea took root in employment law decades ago. In the landmark 1971 case Griggs v. Duke Power Co., the Supreme Court held that Title VII of the Civil Rights Act of 1964 prohibits employment practices that are discriminatory in operation, not just in intent. Congress later wrote the disparate-impact framework directly into Title VII through the Civil Rights Act of 1991. That statutory foundation is part of what makes the employment context distinct from the recent agency changes.
What Just Changed
The recent rollbacks have focused largely on Title VI of the Civil Rights Act, which bars discrimination by recipients of federal funding, rather than Title VII, which governs the employer-employee relationship. The distinction matters, and we will return to it.
The VA’s proposed rule would remove language prohibiting funding recipients from using criteria or methods of administration that have the effect of subjecting people to discrimination based on race, color, or national origin. It would also rescind a provision addressing affirmative action. The agency argued that its current regulations exceed what Title VI actually says, citing the Supreme Court’s 2001 decision in Alexander v. Sandoval, which held that Title VI addresses only intentional discrimination.
The VA is not acting alone. The U.S. Department of Justice amended its Title VI regulations in December 2025 to remove disparate impact, and the U.S. Department of Transportation finalized a similar rule in June 2026. These moves followed an April 2025 executive order directing federal agencies to step back from using disparate impact as a tool in discrimination enforcement.
Most consequentially for workplaces, the DOJ declared earlier in June 2026 that the Equal Employment Opportunity Commission’s long-standing position on disparate impact is unconstitutional, on the theory that it pressures employers into race-conscious decisions. That statement, by itself, does not change the law. The disparate-impact standard for employment remains written into Title VII by Congress, and only Congress or the courts can remove it. But it signals a clear shift in federal enforcement priorities that both employers and employees should understand.
What This Means for Employers
For business owners and HR leaders, the near-term takeaway is caution rather than relief. The disparate-impact framework in Title VII has not been repealed. An employer that abandons a careful review of its hiring tests, screening tools, or promotion criteria on the assumption that disparate-impact liability has disappeared could be making a costly mistake. Private plaintiffs can still bring Title VII disparate-impact claims, and state anti-discrimination laws often contain their own protections that federal rule changes do not touch.
At the same time, the shift in federal enforcement may reduce the likelihood of agency-initiated action premised solely on statistical disparities. The prudent course is to keep documenting the legitimate, job-related reasons for employment policies and to treat well-designed, neutral practices as a defense rather than a liability. If your business receives federal funding, the changing Title VI landscape adds another layer worth reviewing with counsel.
What This Means for Employees
If you believe a workplace policy has unfairly screened you out, the door is not closed. The protections Congress built into Title VII remain in force, and the right to challenge a genuinely discriminatory practice, whether intentional or in effect, still exists. What is changing is the broader enforcement environment, which can affect how aggressively federal agencies pursue these theories.
Because the legal terrain is shifting and the difference between Title VI and Title VII is easy to miss, it is more important than ever to get advice tailored to your specific situation rather than relying on headlines.
The Bottom Line
The federal government is reshaping its approach to unintentional discrimination, but the core employment protections under Title VII remain in place. For now, the smartest move for employers and employees alike is to understand where the law actually stands, not where the news cycle suggests it might be heading.
At Hoyer Law Group, we advise both employers and employees on the full range of workplace discrimination issues, from policy review and compliance to individual claims. If you have questions about how these developments affect your workplace, we can help you sort through what applies to your situation. Contact us at our contact page or call (844) 531-0082 to request a confidential evaluation.
This blog is for general informational purposes only and does not constitute legal advice. For advice specific to your situation, please consult a qualified attorney.