I. Work on the Hill
June 2025 was defined by congressional efforts to finalize the sweeping reconciliation package known as the “One Big Beautiful Bill” (H.R. 1), a central pillar of President Trump’s legislative agenda. The bill includes permanent extensions of the 2017 tax cuts, new investments in border and defense infrastructure, and provisions related to procurement modernization, AI incentives, and trade and manufacturing policy. Senate Republicans released their 940-page substitute amendment to the bill in the early hours of June 28ᵗʰ, just ahead of a motion to proceed. The revised text aims to comply with reconciliation rules and gain support from conservative holdouts while preserving the bill’s core tax and budget provisions. Although the Senate initially planned to vote on final passage by the end of June, procedural delays pushed the floor process into July. The Senate formally entered debate over the package and will begin a vote-a-rama on Monday, July 1ˢᵗ at 9 a.m. The daytime schedule could stretch final votes into early Tuesday morning. As of June 30ᵗʰ, the Senate remains on a clear path toward passing the bill. Speaker Mike Johnson has directed House Republicans to return to Washington by July 3ʳᵈ, signaling that House leadership is preparing to move quickly once the Senate completes its work.
A pivotal moment came when the Senate held a party-line vote to affirm the use of a “current policy” budget baseline, a procedural maneuver that allows the 2017 tax cuts to be made permanent without offsets. Senate Democrats strongly opposed this accounting method and attempted to challenge it under the Byrd rule, but GOP leadership avoided overruling the parliamentarian by calling a direct vote instead. If accepted as precedent, the current policy baseline could become a tool for either party to extend tax cuts in future reconciliation bills. The Senate floor process continues to evolve, with numerous amendments expected. Democrats plan to use the vote-a-rama to force votes highlighting the potential impact of the bill on working families, small businesses, and rural communities. While those amendments are unlikely to pass, they are designed to put pressure on vulnerable Republicans and shape public messaging around the bill. One key policy area that may remain in the final bill is a newly negotiated provision on artificial intelligence. After internal pushback, Senators Cruz and Blackburn reached a deal that would allow states to access $500 million in new AI infrastructure funding if they agree not to regulate AI for a period of five years. The revised version includes carveouts allowing states to continue regulating AI where it affects children, intellectual property, or vulnerable populations. Democrats are still expected to offer an amendment to strike the provision, but the compromise has helped unify more of the GOP caucus behind the broader bill.
Outside of the reconciliation process, Congress also made progress on other key legislative fronts. The House passed its version of the FY 2026 National Defense Authorization Act, which includes provisions related to defense procurement, industrial base resilience, and workforce readiness. Bipartisan legislation was also introduced to prohibit the use of AI developed in adversarial nations within federal systems, an issue that intersects with procurement and national security. Meanwhile, the Departments of Education and Labor continued rescinding regulations tied to workforce programs and training grant administration, signaling continued deregulation of Biden-era rules. As July begins, Senate Republicans are positioned to deliver a significant legislative win for the Trump administration. While GOP leadership remains committed to meeting the President’s symbolic July 4ᵗʰ deadline, many reporters and staff acknowledge that the timeline is extremely tight. The Senate’s vote-a-rama could stretch into early Tuesday, and although House Republicans have been called back for votes on July 3ʳᵈ, even a minor delay could push final passage just beyond the holiday.
June Highlights
Friday June 27th
Julia Colver, LC; Sen. Lisa Murkowski (R-AK)
On June 27ᵗʰ, Lobbyit met with Julia Colver, Legislative Correspondent in the office of Senator Lisa Murkowski, on behalf of the National Employers Association to discuss healthcare flexibility and workforce development policy. The meeting focused on (H.R. 379), the Healthcare Freedom and Choice Act. We provided a one-pager outlining the background and goals of H.R. 379, as well as its relevance for employers seeking to offer more choice in healthcare coverage. Julia was familiar with the issue and appreciated the materials. She recommended reaching out to Senator Bill Cassidy’s office as a logical next step, given his leadership on Medicare and employer benefits within the Senate HELP Committee. We also discussed the National Employers Association’s broader commitment to advancing employer-driven workforce development strategies. Julia noted Senator Murkowski’s strong interest in practical, locally responsive solutions to workforce needs, particularly in rural and underserved communities. She welcomed additional information on how NEA’s employer members are structuring training and upskilling initiatives that contribute to job readiness and economic growth. Lobbyit will follow up with the requested policy materials and coordinate outreach to Senator Cassidy’s office as recommended.
II. Labor and Workforce Policy
June 2025 brought continued movement toward employer-focused labor reforms. During a June 5th hearing, leaders of the House Education and Workforce Committee expressed support for the Trump administration’s deregulatory approach, which emphasizes reducing the overall number of federal labor rules while maintaining essential worker protections. President Trump’s executive order, which requires agencies to eliminate ten existing regulations for every new one, has already led to the reversal or halting of several initiatives from the previous administration. For example, the Department of Labor announced it will not enforce the 2024 independent contractor rule and has instead reinstated the earlier “economic reality” test for worker classification. This policy shift provides employers with greater clarity and flexibility in engaging independent contractors, a change welcomed by many sectors that rely on gig or freelance labor.
Additionally, the Department confirmed it will abandon the 2024 overtime rule, which a court struck down last year. That rule would have significantly expanded overtime eligibility by raising the salary threshold for exemption. Leaving the 2019 threshold in place helps employers avoid increased payroll costs for mid-level salaried employees, although future updates to the standard remain a possibility. The administration also rolled back the previous federal contractor minimum wage policy. A new executive order nullified the requirement for government contractors to pay a wage of at least $17 per hour, a rule that had been indexed to inflation. While this rollback may help contractors manage labor costs, employers should be mindful of potential recruitment and retention challenges in lower-wage roles that had benefited from the higher minimum wage.
Separately, a unanimous Supreme Court ruling on June 5th in the case of Ames v. Ohio DYS will have implications for how employment discrimination claims are adjudicated. The Court struck down the use of the background circumstances test, a legal standard that had imposed a higher burden of proof on majority group plaintiffs bringing Title VII claims. Going forward, all discrimination claims, regardless of the claimant’s demographic background, will be evaluated using the same legal framework. This ruling could lead to an increase in so-called reverse discrimination cases proceeding past initial legal hurdles. Employers may want to review their internal policies and practices to ensure that hiring, promotion, and diversity programs are applied fairly and consistently, reducing exposure to claims of disparate treatment. The decision reinforces the principle that all workers are protected from intentional bias and highlights the importance of maintaining neutral, merit-based employment practices.
Workforce Updates and Union Matters
The Department of Labor’s policy direction in June 2025 continued to reflect a shift toward employer-centered governance, accompanied by key leadership changes and oversight developments that employers should closely monitor. In late January, President Trump removed Jennifer Abruzzo, the National Labor Relations Board’s General Counsel, a Biden-era appointee, and appointed new leadership aligned with a more business-friendly philosophy. The new General Counsel is expected to revise recent legal interpretations that expanded union protections and to restore a more traditional approach to enforcement. While the partisan balance of the NLRB itself will shift gradually as board member terms expire, early signals point to potential changes in the joint employer standard, union election procedures, and definitions of protected concerted activity. These changes suggest the agency may pursue fewer expansive rulings on union rights, although formal rule changes will develop over time. Meanwhile, congressional interest in union governance gained traction. In June, lawmakers reviewed responses to a request for information that was circulated in late May regarding potential updates to the Labor Management Reporting and Disclosure Act. The law regulates union election processes and financial transparency. While no legislation has yet been introduced, committee leaders are exploring potential reforms aimed at enhancing accountability and member protections within labor organizations. These early inquiries could evolve into legislative proposals in the months ahead.
Additionally, courts weighed in on key labor regulations. In early June, the Fifth Circuit Court of Appeals upheld the decision to strike down the previous administration’s contractor wage and hour rules. At the same time, the Trump administration officially withdrew those mandates. This included rescinding the indexed minimum wage requirement for federal contractors, which had been set at $17.75 per hour. For employers with federal contracts, this development eases compliance obligations and may result in reduced payroll costs. However, contractors must still comply with relevant state or local wage laws and any existing collective bargaining agreements. Taken together, June’s workforce and labor updates indicate a period of regulatory recalibration. Employers should maintain rigorous compliance with existing wage, hour, and nondiscrimination requirements while preparing for a more stable regulatory environment that may reduce unexpected rulemaking or enforcement swings. This shift is particularly relevant for organizations managing large or multi-state workforces, as it may simplify federal compliance while emphasizing awareness of localized labor standards.
III. Healthcare Policy
Small Business Health Plans
Congress advanced two legislative proposals in June 2025 aimed at expanding affordable health coverage options for small businesses. On June 26th, the House Education and Workforce Committee approved the Association Health Plans Act and the Self-Insurance Protection Act, both of which seek to expand the tools available to small employers for managing rising insurance costs. The Association Health Plans Act (H.R. 2528) would allow small businesses and self-employed individuals to form or join large group insurance plans through qualifying associations. These plans would be treated as single-employer plans under federal law, giving participants access to larger risk pools, lower premiums, and broader provider networks. Committee Chairman Tim Walberg emphasized that small businesses often lack bargaining power in the health insurance market, and this bill aims to level the playing field by offering the kind of regulatory and cost advantages typically available only to large corporations.
The Self-Insurance Protection Act (H.R. 2571) complements this effort by safeguarding the ability of small employers to self-insure. Specifically, it would preempt state laws that classify stop-loss insurance as traditional health insurance, preventing states from prohibiting or overregulating the use of stop-loss policies by small firms. Stop-loss coverage is essential for small employers that self-fund their health benefits, as it protects them from excessive financial exposure in the event of high-cost claims. Supporters of the bill argue that preserving access to stop-loss policies allows more small businesses to consider self-funding as a cost-saving option. Democratic members of the committee expressed concern that expanding AHPs could weaken consumer protections. Ranking Member Bobby Scott warned that such plans might offer skimpier benefits and attract younger, healthier individuals out of the ACA-regulated small group market, potentially leading to higher premiums for those who remain in the ACA-regulated small group market. While the bill includes safeguards intended to prevent adverse selection, its actual impact in the real world will depend on its implementation and oversight. Both bills await full consideration by the House, and their advancement has set the stage for a broader policy debate. Supporters argue that the proposals offer meaningful cost relief and greater flexibility for small employers. Critics contend they could destabilize insurance markets if not carefully managed. Regardless of the outcome, these measures underscore Congress’s ongoing interest in expanding health coverage options tailored to the needs of small businesses.
Federal Health Programs and Benefits
Broader health policy developments in June focused on the administration’s ongoing efforts to reshape federal healthcare programs, though no primary new health legislation was enacted during the month. The comprehensive budget package passed by House Republicans in late May (H.R. 1) remained under negotiation, with key healthcare provisions still unsettled. Among them are proposals to introduce work requirements for particular Medicaid beneficiaries and to gradually phase out the enhanced subsidies for Affordable Care Act marketplace plans. In June, lawmakers continued behind-the-scenes talks over these provisions. Supporters argue that linking Medicaid eligibility to employment or training can encourage workforce participation. Opponents caution that it could result in the loss of coverage for low-income adults, potentially shifting a greater portion of the uncompensated care burden onto employers and hospitals. At the executive level, several healthcare initiatives announced in May entered early implementation. One notable example is President Trump’s “most-favored-nation” drug pricing policy, which aims to align Medicare drug prices with those paid in other advanced economies. In June, the Department of Health and Human Services initiated discussions with pharmaceutical companies regarding the implementation of this pricing model. If successful, it could eventually help slow the growth of prescription drug costs across the broader insurance market, including employer-sponsored plans.
Short-term limited duration insurance (STLDI) also remained a relevant policy topic. The administration continues to permit STLDI plans with coverage periods of up to 36 months, maintaining a rule established during the previous Trump administration. While Congress did not act on STLDI in June, several states continued moving forward with restrictions on these plans. Employers who hire part-time or temporary workers, many of whom rely on such plans for interim coverage, should be aware of evolving state-level requirements that may affect plan availability. Congress also took bipartisan action to extend specific public health measures. For instance, telehealth flexibilities introduced during the pandemic were extended again in June through a short-term spending bill. These extensions allow Medicare and high-deductible health plans paired with Health Savings Accounts to continue offering telemedicine without jeopardizing HSA eligibility. Employers with telehealth programs welcomed this move, as it preserves flexibility in healthcare delivery for employees. Overall, June’s health policy environment reflected ongoing transitions rather than sweeping reforms. Developments like the Medicare drug pricing pilot, Medicaid work requirement proposals, and expanded telehealth access point to a policy trajectory that favors cost containment, program conditioning, and market responsiveness. Employers should closely monitor these trends, as the cumulative effect may impact coverage affordability, workforce health benefits, and compliance strategies in the months ahead.
IV. Small Business and Lending
SBA Lending Rule Changes
Significant updates to federal small business lending programs took effect this month, following policy decisions made earlier in the year. On June 1st, 2025, the Small Business Administration’s new Standard Operating Procedure (SOP) 50 10 8 became effective, bringing a suite of revisions to the flagship 7(a) loan program. Lenders and borrowers are now adapting to more stringent eligibility and underwriting standards. Changes include the reinstatement of traditional multi-factor credit underwriting, which replaces the previously used simplified “do what you do” approval model, and renewed requirements that only U.S.-owned companies qualify for SBA-backed loans. Under the new SOP, all 7(a) loan applicants must be 100 percent owned by U.S. citizens, U.S. nationals, or lawful permanent residents, closing loopholes that had allowed some foreign-owned firms to access funds.
The SBA also reintroduced upfront guaranty fees for 7(a) loans, which vary by loan size, ending a temporary fee relief that had been in place. Another noteworthy change is the return of the SBA Franchise Directory, a compliance tool that had been discontinued. Lenders must now consult the updated directory to verify that franchise borrowers meet the SBA’s affiliation rules. These revisions, implemented administratively, aim to bolster the program’s integrity following recent concerns about default risks and fraud. For small employers, the immediate implication is that obtaining SBA loans may become more demanding. Borrowers should expect more thorough documentation of creditworthiness and ownership structure, as well as slightly higher closing costs resulting from additional fees. Well-prepared borrowers with solid financials and domestic ownership should still find capital accessible, while marginal applicants may face new hurdles. Lenders report that the clarified rules have brought greater certainty about which businesses qualify, even if it means saying “no” more often. Over time, the tightened standards are intended to ensure SBA-backed financing flows to its intended recipients, genuinely small, U.S.-based enterprises, which supports a healthier loan portfolio and sustainable funding for entrepreneurs.
Congressional Oversight and Initiatives
In June, lawmakers shone a spotlight on the economic conditions of small businesses and the impact of federal policy. On June 4th, the House Small Business Committee hosted SBA Administrator Kelly Loeffler for a hearing entitled “Budgeting for Growth,” examining how the SBA’s proposed FY2026 budget would promote entrepreneurship. Committee members pressed for details on how the agency will deploy resources for lending, training, and disaster loans, considering the new policy direction. Administrator Loeffler emphasized plans to streamline programs and target funds toward pandemic recovery and underserved communities, while also defending the recent 7(a) rule changes as necessary risk management.
Separately, the Committee’s Economic Growth Subcommittee held a session on June 10th, highlighting “Investing in America: How Private Equity Empowers Main Street.” This hearing examined the growing role of private equity and venture capital in financing small businesses. Testimony from industry experts and business owners painted a nuanced picture. On one hand, private investment can inject capital and expertise into growing companies. On the other hand, concerns were raised about debt loads or the loss of local control when outside investors come in. The discussion signaled bipartisan interest in ensuring that regulatory barriers do not unintentionally stifle beneficial investment, while also contemplating whether guardrails are needed to protect small businesses in asymmetric negotiations.
Meanwhile, the House Small Business Committee’s chairman, Rep. Roger Williams, used a June 25th op-ed to champion the House’s recently passed budget reconciliation bill (H.R. 1, the “One Big Beautiful Bill Act”) as a “green light on Main Street.” He highlighted provisions in the bill, such as tax cuts, simplified regulations, and small business tax credits, as long-awaited relief for entrepreneurs. H.R. 1 carries several small business incentives that, if enacted, would lower operating costs and encourage business expansion. However, with that legislation still pending in the Senate, small business advocates are continuing to push for stand-alone measures in June as well. For instance, bills to expand federal contracting opportunities and to reauthorize the SBA’s core programs, which are up for renewal in 2025. In sum, June brought a mix of oversight and optimism for small businesses. Oversight in scrutinizing SBA’s direction and the effect of Wall Street investment on Main Street. Optimism in the form of legislative proposals aimed at unleashing growth through tax relief and deregulation.
V. Tax and Benefits Policy
The federal tax landscape in June was shaped by continued deliberation over H.R. 1, the House’s ambitious budget reconciliation package passed in late May. This 10-year plan proposes sweeping tax changes that would directly affect employers’ financial strategies. Most notably, it would make permanent the individual and pass-through business tax cuts set to expire in 2025, including lower individual income tax rates and the Section 199A deduction for S corporations, partnerships, and LLCs. The bill not only cements the 20 percent pass-through deduction but increases it to 23 percent for qualifying small businesses, boosting after-tax income for many proprietors. Family-owned companies also welcomed the provision that indefinitely doubles the estate tax exemption, further shielding business assets from federal estate taxes.
H.R. 1 also includes targeted tax credits designed to encourage employers to take action. A new two-year credit would offer small businesses that provide health insurance for the first time up to $100 per employee per month in the first year and $50 per employee per month in the second year under CHOICE arrangements. The bill significantly expands the tax credit for employer-provided childcare, increasing the maximum credit from $150,000 to $500,000 and raising the reimbursement rate to 40 percent. For small firms with fewer than 50 employees, the cap would increase to $600,000, accompanied by a higher 50 percent rate. Additionally, the bill would make permanent and expand the Paid Family and Medical Leave Credit, which was initially introduced during the pandemic. The updated credit would count contributions toward short-term insurance premiums and lower the employee tenure requirement from one year to six months, making it easier for employers to qualify for the existing credit of up to 25 percent of paid leave wages.
Other provisions in the bill include raising the state and local tax (SALT) deduction cap from $10,000 to $20,000 through 2029, a change that would indirectly benefit mid-size employers and employees in high-tax states. To balance some of the cost, the bill phases out select business credits, particularly clean energy incentives not tied to core business benefits. While the House-passed plan outlines substantial tax relief and simplification for employers, its future remains uncertain in the Senate. Budget concerns have led some lawmakers to question the sustainability of the $2.4 trillion projected deficit impact over a decade. Ongoing June negotiations hinted that any final compromise may involve a narrower scope or be paired with spending cuts. NEA member employers should remain alert and prepare for a range of possible outcomes. With many provisions from the 2017 tax law scheduled to expire at the end of 2025, the future direction of federal tax policy remains one of the most significant factors in long-term business planning. Lobbyit will continue to monitor these developments and provide timely updates to NEA as the policy landscape evolves.
Retirement Plan Fiduciary Rules (ESG Investing)
June saw renewed efforts by lawmakers to reverse recent regulatory shifts in retirement plan investment standards, signaling a return to a more traditional focus on financial returns. On June 26th, the House Education and Workforce Committee approved the Protecting Retirement Savings Act (H.R. 2988), which would prohibit fiduciaries of ERISA-qualified retirement plans from considering environmental, social, or governance (ESG) factors when selecting investments. The bill aims to reestablish a strict interpretation of fiduciary duty, requiring that investment decisions be based solely on financial considerations that prioritize the economic interests of plan participants. This move would override the Department of Labor’s 2022 rule, which permitted fiduciaries to consider ESG criteria when they were deemed relevant to long-term risk and return.
Proponents of the bill argue that the 2022 rule introduced ambiguity, allowing plan sponsors to pursue social or political agendas at the potential expense of financial performance. The bill explicitly mandates that fiduciaries cannot sacrifice expected returns or take on additional risk for non-pecuniary objectives, nor can they select service providers based on non-financial criteria. Committee Chairman Tim Walberg emphasized during the markup that retirement assets should be shielded from political influence, framing the legislation as a way to protect participants’ savings from what he described as “woke” investing. If enacted, this would require employers offering 401(k) plans or pensions to revise their investment policies and documentation to demonstrate that financial metrics alone drive their fund selection and oversight decisions. Critics of the legislation, including Democrats and ESG investment advocates, warn that the proposed restrictions may oversimplify fiduciary responsibilities. They argue that some ESG factors, such as corporate governance or climate resilience, can be material to long-term financial performance and risk management. By limiting fiduciaries’ ability to consider these elements, the bill could constrain prudent decision-making and responsiveness to emerging economic risks.
Meanwhile, the Department of Labor indicated in a court filing that it plans to rescind or revise the 2022 ESG rule through formal rulemaking. This suggests that, regardless of congressional action, the regulatory environment will continue shifting away from ESG-focused guidance. Employers should prepare for increased scrutiny of their retirement plan decisions and consider updating their Investment Policy Statements to align with a stricter financial-return standard. Importantly, the House bill includes a provision that would allow employees to invest in ESG-themed options through brokerage windows, provided that additional disclosures are made. This would enable participants to pursue ESG investments independently, but plan fiduciaries would not be responsible for offering or evaluating ESG funds. Overall, June’s activity signaled a clear legislative and regulatory push to reestablish financial performance as the sole benchmark in retirement plan investment decisions, simplifying compliance for employers and plan administrators.
Employee Benefits and Compensation
Aside from retirement investments, a few other benefit-related developments occurred in June. The IRS has issued proposed regulations to implement changes under the SECURE 2.0 Act for 401(k) and 403(b) plans, providing employers with greater clarity on upcoming provisions. These include higher catch-up contribution limits with Roth tax treatment for older workers beginning in 2025. The proposals confirmed that the new requirement for Roth treatment will apply to high earners making over $145,000, as defined by statute. Employers sponsoring plans should consult their advisors to prepare timely amendments once the regulations are finalized.
In the area of leave benefits, federal legislation on paid family and medical leave remained a topic of discussion. June saw the reintroduction of the FAMILY Act, which proposes a national paid leave insurance program, along with separate bills to expand tax credits for employers that offer paid leave. Although none of these measures advanced in June, they reflect continued interest in federal solutions to address the growing patchwork of state and local mandates. Several states, including Michigan and Minnesota, have recently enacted paid leave laws, and employers with operations in multiple states have raised concerns about the complexity of complying with these laws. During June hearings and stakeholder roundtables, companies emphasized the administrative burden of navigating different requirements and called on Congress to consider a national standard or cost-offsetting incentives. In the meantime, employers should ensure that their leave policies comply with applicable laws in each jurisdiction and consider enhancements to remain competitive in the labor market.
On compensation, the administration’s freeze on major new labor regulations kept any new wage or salary rules from advancing. The overtime rule remains on hold, as previously noted. However, the National Labor Relations Board circulated a proposed rule in late June addressing the use of confidentiality and non-disparagement clauses in severance agreements. This follows an earlier Board decision that questioned whether broad gag clauses might violate employee rights under the National Labor Relations Act. The new guidance would allow such clauses if they were narrowly tailored and did not restrict employees from discussing workplace conditions or exercising their rights. Employers offering severance packages should closely monitor the outcome of this rulemaking to ensure their agreements remain compliant with the new regulations. Altogether, June’s updates in the benefits and compensation space were incremental but essential. Employers continue to adapt to new regulatory proposals while preparing for broader debates on paid leave and changes to plan design. The evolving legal landscape underscores the need for ongoing review of benefit offerings and HR policies to align with both current laws and anticipated developments.
VI. Immigration Policy
Travel Ban and Visa Restrictions
The Trump Administration revived a cornerstone of its prior immigration agenda by implementing a new travel ban in early June. On June 4th, 2025, a presidential proclamation took effect barring the entry of most nationals from 19 countries (primarily in Africa and the Middle East) unless they meet specific exceptions. The declaration, justified on national security grounds, applies to foreign nationals abroad who did not have a valid U.S. visa as of that date. Limited exemptions exist. For example, certain diplomatic visas, designated refugees, and close family of U.S. citizens may still be eligible to enter. However, employment-based travel from the affected countries is largely halted. U.S. consulates were instructed to cancel any visa that had been issued but not yet used for travel by individuals from the banned countries, unless an exception is granted.
This policy shift immediately created ripples for employers. Companies that recruit internationally or transfer employees from those regions now face new hurdles in talent acquisition. Immigration attorneys and business groups warned in June that the restrictions would create hiring challenges, delay visa processing, and increase compliance burdens for U.S. businesses that rely on global talent or conduct business in the affected countries. For instance, an engineering firm with candidates in North Africa or a hospital system awaiting medical residents from affected nations may find those workers unable to secure visas. Employers must also be mindful of the policy’s potential to complicate travel for current employees from the listed countries who are in the U.S. on temporary visas and could be unable to depart for business trips or family emergencies without risking being barred from return. The business community has largely decried the renewed travel ban as disruptive.
Nevertheless, the policy remains in force, and companies should adjust their recruiting strategies accordingly. For example, some may focus on applicants from non-banned countries or leverage remote work arrangements. Some organizations are also assisting impacted staff with seeking case-by-case waivers, though such waivers are granted sparingly. In summary, the June travel restrictions will tighten the labor pool for particular industries and regions, and employers will need to plan accordingly while these constraints remain in effect.
Humanitarian Parole Program Terminated
A significant immigration development in June is expected to impact workforce planning across several sectors. On June 5th, 2025, the U.S. Supreme Court declined to intervene in litigation over the administration’s decision to end the CHNV humanitarian parole program. This initiative provided temporary legal entry and work authorization to individuals from Cuba, Haiti, Nicaragua, and Venezuela. With the program’s termination moving forward, over 530,000 parolees currently in the U.S. are awaiting clarification on their future immigration status. An estimated 240,000 of these individuals are participating in the workforce, with many employed in sectors such as manufacturing, construction, hospitality, healthcare, and education. As the program winds down, employers are encouraged to review Employment Authorization Documents for affected workers and stay alert for further guidance from the Department of Homeland Security. While details on next steps are still pending, some organizations have begun exploring options to support their employees through legal resources and contingency planning. Industry groups and business associations have expressed interest in potential legislative or administrative solutions that would enable continued workforce stability. This development underscores the importance of staying responsive to shifts in federal immigration policy. Employers that rely on a globally diverse workforce may want to evaluate hiring strategies, ensure compliance with evolving requirements, and maintain open communication with employees. As more information becomes available, additional clarity is expected to help businesses and workers navigate the transition more effectively.
Work Authorization and Social Security Changes
In June, the administration advanced several proposals aimed at tightening the connection between immigration status and employment eligibility. One draft regulation under consideration would prevent most asylum seekers from receiving employment authorization while their claims are pending. Under current rules, asylum applicants can apply for a work permit if their case has not been resolved after 180 days. The proposed change would delay work authorization until asylum is granted or until the average adjudication time falls below six months. Given existing backlogs, this shift would likely extend wait times for work eligibility well beyond a year. Business groups and labor economists have expressed concern about the potential labor market effects, particularly in sectors like food processing, hospitality, and services, where many asylum seekers are currently employed. Stakeholders have also raised questions about the potential for increased unauthorized employment if access to legal work avenues becomes more limited.
Additionally, it came to light in June that the administration ended the “Enumeration Beyond Entry” (EBE) program in March. This program previously allowed certain lawful immigrants to receive Social Security numbers automatically upon arrival or approval of legal status. With EBE no longer in place, affected individuals must now apply in person at a Social Security office, often leading to delays of several weeks before new hires can begin work. Employers who sponsor or hire foreign workers may need to adjust onboarding procedures accordingly and provide additional support to ensure the timely completion of employment verification requirements. While these measures have not yet been finalized, they reflect a broader policy direction focused on linking immigration status more directly to work eligibility. Employers are encouraged to closely monitor developments, engage in public comment opportunities as they arise, and remain diligent in complying with I-9 employment verification requirements.
Sanctuary Cities Policy Reversal
In June, the Department of Homeland Security (DHS) reversed course on a proposed enforcement initiative targeting “sanctuary” jurisdictions, following significant pushback from law enforcement stakeholders. A presidential executive order signed in late April directed the DHS to publish a list of localities allegedly not cooperating with federal immigration enforcement, with the intention of conditioning federal funding on compliance. The resulting list, released in May, identified dozens of cities and counties across 37 states, including some that challenged their inclusion or claimed confusion over the criteria used.
However, on June 1st, DHS quietly removed the list from its website after strong criticism from organizations such as the National Sheriffs’ Association. While the Association generally supports immigration enforcement, it objected to the policy’s lack of transparency, clear standards, and coordination with local partners. Many jurisdictions were unaware of how or why they had been designated as non-compliant and were concerned about reputational and funding consequences. In response, DHS halted its plans to issue formal non-compliance notices and appears to have paused broader efforts to penalize sanctuary jurisdictions. The episode likely has limited direct effect, but it underscores how federal immigration enforcement policy can shift and intersect with broader funding dynamics. Had the policy moved forward, certain jurisdictions might have faced federal grant reductions, which could have had downstream effects on local infrastructure or services crucial to the business environment. The reversal signals that DHS may seek to rebuild cooperation with local law enforcement rather than pursue a public confrontation. At the same time, businesses in all jurisdictions should remain diligent in their employment eligibility verification processes, including the proper use of I-9 forms and E-Verify, where applicable. Although the sanctuary list is no longer active, DHS continues to conduct immigration enforcement nationwide, and workplaces may still be subject to audits or other compliance checks, regardless of their location.
VII. Housing and Community Developments
In June, housing policy discussions primarily centered on the federal budget proposals being considered by Congress. President Trump’s FY 2026 budget plan, first released in May, remained under review and drew attention for proposing significant changes to the Department of Housing and Urban Development (HUD). The proposal outlines a $33 billion reduction to HUD’s budget, which would return funding to levels not seen in decades. A significant portion of this cut targets federal rental assistance, including a $26.7 billion reduction to the Section 8 voucher program. Under the proposed changes, states would receive smaller block grants and take on greater responsibility for designing and managing rental assistance programs. The budget also introduces a two-year time limit on housing assistance for nondisabled, non-elderly adults. Several longstanding HUD programs are proposed for elimination, including the Community Development Block Grant program, the HOME Investment Partnerships program, and grants supporting Native American housing and fair housing enforcement. According to the administration, these shifts are intended to promote local innovation and streamline federal involvement, giving states and communities greater flexibility. HUD Secretary Scott Turner emphasized the opportunity to reimagine housing delivery models that align with regional needs.
Throughout June, housing stakeholders and members of Congress responded with mixed views. Advocates for affordable housing expressed concern about the potential impact on vulnerable populations, particularly in urban areas where housing costs are rising and homelessness is increasing. For employers, the discussion around federal housing assistance is closely tied to workforce stability. Many low-income workers rely on rental assistance to remain housed near their jobs, and changes to these programs could influence employee retention, attendance, and productivity. Community development funding through programs like CDBG and HOME also plays a role in local infrastructure and revitalization projects that benefit surrounding businesses.
On Capitol Hill, appropriators began reviewing and marking up the FY 2026 budget. By mid-June, the House advanced a Transportation and HUD spending bill that included cuts, but on a smaller scale than the administration’s request. Senate appropriators are expected to propose more moderate adjustments or maintain current levels, making it likely that the final budget will reflect a negotiated middle ground. Employers are advised to follow the process closely and assess how evolving housing support programs may affect employees’ cost of living and access to reliable housing. Companies may also consider exploring local partnerships or employer-assisted housing programs to help fill any potential gaps. As the budget debate continues, a balance between program reforms and continued support for workforce housing remains a central focus of discussion.
Fair Housing Rule and Regulatory Relief
In addition to funding proposals, June brought notable regulatory developments from the Department of Housing and Urban Development (HUD) that could shape local housing strategies and indirectly influence workforce dynamics. HUD continued to review public comments on its proposed rewrite of the Affirmatively Furthering Fair Housing (AFFH) rule, with the comment period closing on May 2, 2025. A final rule is expected to be released later this year. The current administration’s proposal would simplify fair housing planning requirements for state and local governments. Rather than following a detailed federal template with in-depth demographic analyses, jurisdictions would be able to set their own fair housing goals and report progress using a streamlined process. This approach shifts HUD’s role from enforcing prescriptive benchmarks to ensuring broader accountability for general improvement.
The AFFH framework influences how communities address issues such as segregation, access to transportation, and the availability of housing near employment centers. More robust federal oversight in the past encouraged jurisdictions to rezone for multifamily housing and invest in underserved neighborhoods, which can help expand housing near job hubs and improve workforce access. The current administration’s revisions prioritize local flexibility and aim to reduce compliance burdens, a shift that many local governments view as an opportunity to pursue development strategies without concern over triggering federal penalties. For example, cities may now focus more directly on housing growth initiatives without needing to submit detailed analyses to HUD. This may accelerate housing approvals and planning decisions that support economic development. However, some observers caution that less oversight could lead to uneven outcomes, with some jurisdictions potentially limiting housing opportunities in higher-income areas. NEA members may find this change significant, as it could impact the availability of workforce housing in regions where local planning decisions determine whether employees can live near their workplaces. Lobbyit will continue to monitor HUD’s rulemaking process and keep NEA updated on any finalized changes to the AFFH framework, including potential implications for the broader housing environment that may affect employer members and their workforce access. Overall, June signaled a continued move toward local decision-making in housing policy and a reduced role for federal enforcement of fair housing mandates.
VIII. Trade and Supply Chain Policy
The Trump Administration’s implementation of sweeping “reciprocal tariffs” continued to shape trade and supply chain dynamics in June. First announced in early April, these tariffs were issued under emergency trade authorities and took effect in two phases. As of April 5th, a baseline 10 percent tariff applies to nearly all imports from most countries. Starting April 9th, additional country-specific tariffs replaced the base rate for 57 economies with large trade surpluses with the United States. For example, imports from China are now subject to a 34 percent tariff, while Vietnam faces a 46 percent tariff.
Additionally, goods from the European Union and Japan are subject to tariffs of 20 percent and 24 percent, respectively. Canada and Mexico were initially exempted, though a separate 12 percent contingency tariff remains possible if bilateral disputes are not resolved. The administration justifies this broad trade action as a way to counter perceived unfair practices and boost domestic manufacturing. However, the policy’s reach has quickly impacted a wide range of industries. By June, businesses across sectors were grappling with the resulting cost increases. Companies that rely heavily on imported goods or materials, from apparel retailers to component manufacturers, now face rising input costs that in many cases exceed 10 percent. While some businesses are attempting to absorb these costs or pass them on to consumers, others are evaluating whether their supply chains can shift to non-tariff sources, a slow and challenging process.
Some categories of goods were excluded to protect U.S. strategic interests. These include pharmaceuticals, semiconductors, certain critical minerals, and oil. Even so, the new tariffs apply to thousands of product lines and often stack on top of existing duties, including prior China tariffs and anti-dumping penalties. For instance, a product imported from China may now face a combined duty rate exceeding 50 percent. A June report by JPMorgan cautioned that such high effective rates could reduce imports and disrupt inventory availability nationwide.
Retaliation has also emerged as a concern. Several U.S. trading partners responded by imposing tariffs on American exports in sectors such as agriculture, automotive, and machinery. This has introduced new pressure on domestic producers who rely on overseas markets. At the same time, reports in late June suggested that the administration might offer tariff relief to certain allies if they make trade or security concessions. The tariff authority includes provisions for the President to adjust rates in response to diplomatic progress, and some countries are actively negotiating for exemptions. For now, the global tariff framework remains in place. Companies have been adapting through tariff engineering, customs compliance strategies, and lobbying for product exclusions through the USTR’s formal comment process. Broader economic effects are beginning to show, with analysts revising inflation forecasts upward in response to the increased costs of imported goods. NEA members and employers may want to closely monitor these developments, as further changes in trade policy, including either escalation or rollback, could emerge depending on the outcome of global negotiations. Lobbyit will continue to track these developments and provide updates on their potential impact across sectors. June found U.S. employers navigating a complex trade environment. While the tariffs aim to strengthen American industry over time, their immediate effect has been increased costs and uncertainty, making strategic planning and cost management more difficult in the near term.
IX. Monthly Wrap-Up
Federal policy developments in June 2025 addressed a wide range of issues, including labor, healthcare, immigration, housing, and trade, reflecting the complex environment in which NEA member employers operate. A common thread across these developments is that the administration and Congress are actively reshaping policies. Some of these shifts reverse previous regulations, such as changes to the definition of independent contractors, ESG investing guidance, and fair housing rules. Others, including new tariffs and immigration restrictions, reflect a stronger assertion of federal authority in matters related to economic and national security policy. These shifts have significant implications for NEA member employers. Labor policy is shifting in a direction that emphasizes employer flexibility by reducing federal restrictions on overtime pay, contractor classification, and union-related activities, while maintaining enforcement of core labor standards. Employers should remain vigilant as the legal landscape continues to evolve, with significant changes underway in areas such as wage and hour law, worker classification, and employment verification. On the benefits and human resources front, new opportunities may arise if federal legislation advances. The House-passed tax bill and Association Health Plan legislation both include provisions that could help employers expand benefits and reduce costs. These proposals include increased tax credits for childcare, more affordable health coverage options, and enhancements to retirement savings that prioritize financial return.
At the same time, employers may need to prepare for new challenges. If Congress reduces federal housing assistance, affordable housing shortages could worsen, affecting workforce stability. Tariffs are increasing the cost of goods for supply chain-reliant businesses, and the enforcement of immigration policy is raising concerns about the future availability of authorized labor. Companies may need to plan ahead by exploring local partnerships, adjusting sourcing strategies, and focusing on employee retention in response to these pressures. Lobbyit, as NEA’s advocacy team in Washington, is closely tracking these developments and providing updates to support NEA’s mission. In July, Lobbyit will be monitoring the Senate’s response to the House budget and tax legislation, the implementation of proposed restrictions on asylum seekers’ ability to work, and the impact of the SBA’s new lending rules on small business access to capital. Encouraging members to share how they are being affected by these policy changes. Member input is crucial in shaping future advocacy and ensuring that employer perspectives are incorporated into the policymaking process. In a rapidly changing federal landscape, staying informed is crucial, and Lobbyit will continue to provide updates to help NEA, and its members, navigate new risks and emerging opportunities in the second half of 2025.
National Employers Association