The DEI Divide: How US and Irish multinationals can reconcile diverging DEI requirements

It’s been impossible to escape reporting of the introduction by the new United States (US) Government administration of a series of US Executive Orders (EO) which are aimed at scaling back diversity, equity and inclusion (DEI) initiatives in the federal government and private sector. These EOs have shifted the ground in respect of DEI both in the US and across its trading partners in Europe and elsewhere. 

Given Ireland’s position as the European headquarters for many US based multinationals, the developing DEI landscape presents a unique challenge for multinationals with operations in both the US and Ireland and is being closely monitored. In this article, we briefly explore the recent changes in the US, the tension they create with conflicting requirements under Irish law, and what organisations should consider when tasked with reconciling these divergent DEI practices.

The US landscape

Numerous measures have been introduced in the US since January 2025 to withdraw DEI initiatives across federal government and the private sector. EOs introduced include obligations to prevent the hiring of individuals based on their race, sex, or religion; terminate federal DEI mandates; revoke the concept of gender identity; rescind affirmative action mandates for federal contractors; require federal contractors not to engage in DEI initiatives which violate federal law; require private sector employers to end “illegal discrimination and preferences”; and revoke disparate impact liability in favour of a “merit-based America.”

The US Equal Employment Opportunity Commission (EEOC) and US Department of Justice (DOJ) have issued guidance on what DEI activities are considered unlawful, including the use of race, gender or any other protected characteristic to determine access to or exclusion from (i) training (ii) mentorship and networking groups; and (iii) to determine placement or exclusion from a recruitment process. 

This has impacted US companies and has led to a re-evaluation of the lawfulness of existing DEI policies and practices and, in some widely reported cases, a roll-back on previous DEI initiatives.

The Irish landscape

Ireland’s approach to DEI is largely premised on European law, which aims to enhance protections against workplace discrimination and can include the promotion of the principle of equality by positive action. A summary of relevant legal requirements in this space includes:

1. The Employment Equality Act 1998 (as amended) (the EEA) which provides for liability of employers for any acts of discrimination, harassment and sexual harassment in the workplace. It is a defence under the EEA for an employer to prove that they took reasonably practicable steps to prevent the person harassing or sexually harassing the complainant. This incentivises employers to implement measures to actively prevent harassment and discrimination in the workplace, such as the introduction of policies and procedures manage complaints and the provision of training to staff. In addition, the EEA also permits positive actions to be taken in favour of persons under any of the nine protected grounds (gender, civil status, family status, sexual orientation, religion, age, disability, race and membership of the Traveller community). This may include, for example, initiatives aimed at increasing representation of females in certain roles, or measures in favour of work life balance such as flexible working, reduced hours, part-time working or other work benefits connected to any of the nine protected grounds.

In light of the EO revoking the concept of gender identity, it is also worth noting that the Workplace Relations Commission (the WRC) has found that the EEA applies to transgender individuals on the gender ground.[1]

2. Under the Gender Pay Gap Information Act 2021 employers in Ireland with 50 or more employees are required to report and publish information on the difference in remuneration of women compared to men in their organisation. In their gender pay gap report, employers must also set out what measures they are taking, if any, to address their gender pay gap. While the legislation does not mandate the taking of measures to address the gender pay gap, it has, in practice, resulted in many employers doing so. 

3. The Corporate Sustainability Reporting Directive (CSRD) was transposed into Irish law by the EU (Corporate Sustainability Reporting) Regulations and the European Union (Corporate Sustainability Reporting) (No. 2) Regulations 2024. The CSRD requires in-scope companies to disclose sustainability information relating to their own workforce, including where they have specific policies aimed at eliminating discrimination, promoting equal opportunities and advancing DEI, and how these are implemented. This demonstrates the ongoing focus on progressing DEI initiatives in the EU and Ireland.

It is also noteworthy that the Irish regulatory landscape is set to broaden the scope of protections against discrimination further by way of the following anticipated legislation:

1. The EU Pay Transparency Directive is due to be transposed into Irish law by June 2026. This Directive will increase employee involvement in pay equity and contains potentially onerous requirements to conduct equal pay assessments. It is anticipated this will result in a rise in equal pay claims. In preparation for the implementation of the Directive, employers will be examining existing pay practices and taking steps to address any pay gaps and inequities.
2. The heads of bill for the Equality (Miscellaneous Provisions) Bill 2024 proposes to increase the time limit for bringing a claim under the EEA, from six months to twelve months. This will inevitably lead to an increase in the number of potential employment equality claims.
3. The government has taken steps to transpose the Gender Balance on Corporate Boards Directive, by introducing the European Union (Gender Balance on Boards of Certain Companies) Regulations 2025 on 30 May 2025. This Directive aims to have boards on which members of the underrepresented sex hold at least 40% of non-executive director positions or at least 33% of all director positions concern the overall gender balance among directors. These mandates are likely to be in tension with the US regime, which rescinds affirmative action.

These are just some examples of where organisations may find a conflict between their approach in Ireland / Europe and the US.

Steps to reconcile diverging DEI requirements

There is a clear contrast in DEI regulatory standards between Ireland and the US, and a dichotomy between the trajectory of the US and Europe regarding DEI. We are seeing a trend that organisations are actively reviewing and considering their approach to DEI and how to balance the US provisions with Irish and European requirements. To navigate and address divergent DEI practices, organisations may wish to consider some of the following practical steps:

1. Conduct a review of global DEI policies and procedures to ensure compliance with the legislation in each relevant jurisdiction. This may require companies to consider alternatives to a “one-size-fits-all” approach to global DEI policies and a move to a more bespoke model. Organisations should keep policies under active review in light of ongoing regulatory changes, both in the US and across the EU.  

2. Conduct a review of contractual arrangements: Organisations should review written arrangements with contractors, suppliers, service providers or clients and consider whether dual obligations may arise requiring compliance with US and Irish/European DEI provisions and the extent of any overlap. 

3. Reporting Obligations: Organisations should consider the extent to which US policy is impacted by their global reporting obligations under EU law and how best to manage the impact (if any). For example, under CSRD, non-EU parent companies and Irish branches of non-EU incorporated companies, depending on their size, may be in-scope for CSRD reporting. The recent shift in US DEI policies and practices will need to be considered in the context of CSRD reporting, particularly when disclosing workforce information in respect of gender representation, diversity policies, and equal opportunity measures. Consideration should also be given to how any statements in the CSRD report may impact or cut across US requirements.

The Irish Times recently reported that more companies in Ireland are continuing with existing DEI policies or even expanding them than is generally the case internationally. Others are rolling back, planning to eliminate or reframe DEI targets as a result of pressure from the US. This is representative of a growing divide we are observing in approaches to workplace diversity from employers.

In this shifting landscape, it is important that employers are prepared for upcoming regulatory changes in each jurisdiction and can navigate the ongoing divergence in approaches between Europe and the US.

Please reach out to a member of our employment team if you require advice navigating these challenges and limiting any potential risks for your business.