If your organization receives federal financial assistance, whether you are a university receiving research grants, a healthcare provider accepting Medicare/Medicaid, or a non-profit operating on federal funds, you need to be aware of a significant regulatory shift that occurred this month.
On December 10, 2025, the Department of Justice (DOJ) issued a Final Rule rescinding key portions of its regulations implementing Title VI of the Civil Rights Act of 1964.
For HR professionals and compliance officers accustomed to the landscape of employment law, this change creates a crucial divergence between how your organization interacts with its program beneficiaries versus how it interacts with its employees.
The Core Change: End of “Disparate Impact” under Title VI Regulations
For decades, HR professionals have been trained to watch out for two types of discrimination:
- Disparate Treatment: Intentional discrimination (e.g., specific hiring refusals based on race).
- Disparate Impact: Facially neutral policies that unintentionally have a disproportionately negative effect on a protected group (e.g., a physical strength test for a job that is not actually necessary for the role but screens out a high percentage of female applicants).
New Rule
The new DOJ rule explicitly removes regulatory language that prohibited practices having a disparate effect or impact under Title VI.
The DOJ’s stated goal is to align its regulations more closely with Supreme Court precedent, holding that the Title VI statute itself only prohibits intentional discrimination. Under these new rules, a neutral policy that results in unintended racial disparities in how your federally funded program delivers services to beneficiaries will likely no longer violate DOJ Title VI regulations.
Title VI vs. Title VII: The Critical Differences
To navigate this split effectively, HR must distinguish between these two statutes. While they share origins in the Civil Rights Act of 1964, they serve different purposes and now carry different liability standards.
- Title VI. Title VI applies to organizations receiving federal financial assistance and protects program beneficiaries, such as students, patients, or housing applicants from discrimination based on race, color, or national origin. Under the new DOJ rule, Title VI compliance is now generally limited to preventing intentional discrimination. It typically does not cover employment practices unless the federal funding is specifically designated for providing employment (e.g., a work-study grant).
- Title VII. Title VII, in contrast, governs the employment relationship. It applies to employers with 15 or more employees and protects workers and applicants. The scope of protection is broader, covering race, color, national origin, religion, and sex (including pregnancy, sexual orientation, and gender identity). Most importantly, Title VII remains unchanged, and employers are still liable for both intentional discrimination and disparate impact, meaning neutral policies that disproportionately harm protected groups remain unlawful.
What This Means for Your Organization
This regulatory divergence creates two distinct compliance standards depending on whether you are interacting with your workforce or your program beneficiaries. When dealing with employees and applicants under Title VII, the status quo remains, and organizations are liable for both intentional discrimination and disparate impact. Human resource teams must continue to validate hiring tests, promotion criteria, and compensation structures, as neutral policies that create unjustified barriers for protected classes are still unlawful. Conversely, dealing with program beneficiaries under Title VI now involves a significant regulatory shift where liability is narrowed to intentional discrimination. The DOJ will no longer use its regulations to pursue organizations for program policies based solely on their disparate effects.
Next Steps for Employers
To ensure compliance with these changes, employers should:
- Avoid “Concept Creep:” Ensure your leadership and managers understand that this new “intent-only” standard applies only to the delivery of federally funded programs under Title VI regulations. It does not apply to your role as an employer under Title VII.
- Review Your Training: Staff involved in administering federal grants or running public-facing programs need to understand the new regulatory scope. However, hiring managers and HR staff must continue to be trained heavily on disparate impact risks in employment.
- Consult Legal Counsel: While the DOJ has changed its regulations, private plaintiffs may still attempt different legal avenues. Furthermore, state, or local laws may still impose disparate impact standards on public programs. Always consult with counsel before revising policies based on this federal change.
