06-04-2025
The EEOC partially funds state and local civil rights agencies so that they may process and investigate discrimination claims under work-sharing agreements between these agencies. In mid-May, the agency sent a memo to these state and local agencies. The memo stated that the EEOC will stop paying for discrimination claims involving transgender workers or claims based on disparate impact. According to the New York Times, the new policy is retroactive to January 20, 2025. In 2024, the EEOC gave $31.5 million to state and local civil rights agencies, which “process about two-thirds of the tens of thousands of discrimination claims” that the federal agency receives each year.
Reducing funding will make it harder for state and local agencies to investigate these claims. Legal experts told the NYT that they anticipate court challenges to the policy. The EEOC’s memo is consistent with previous executive orders asserting that the federal government recognized two genders, male and female, and that federal agencies had to stop using “disparate-impact liability.“ The EEOC processed about 3,000 transgender and gay discrimination cases last year.
State and local civil rights laws still require their agencies to enforce claims for transgender discrimination and disparate impact. However, to the extent that they rely on the EEOC for funding, their efforts will be significantly hampered. Maine gets about one-third of its funding from the EEOC. However, California and New York receive only about 5% from the federal agency. Some local agencies may choose to “de-emphasize or ignore” gender identity cases or disparate-impact discrimination, former EEOC Commissioner Jocelyn Samuels told the NYT.