- Federal laws that prohibit discrimination, such as Section 1981 of the Civil Rights Act of 1866, Title VII of the Civil Rights Act of 1964, the Americans With Disabilities Act, the Equal Pay Act, and others
BEAM TOOLKIT FOR I&D
Foundations of Legally Compliant Inclusion and Diversity
Your organization's I&D strategies should be based on a solid foundation of fairness and equal opportunity in order to be legally compliant and drive lasting cultural and financial impact. Grounded in SHRM's BEAM Framework, this resource equips organizations to build fair, merit-based workplaces where every employee can contribute and succeed.
Introduction
At the core of inclusion and diversity work is the belief that a workplace based on fairness and equality enhances performance and supports merit-based decision-making. Inclusion in this context means creating structures within which every employee — regardless of role or background — can contribute, be heard, and succeed based on merit and performance. Diversity means reflecting a wide range of backgrounds and identities.
In today’s evolving social, economic, and legal landscape, legally compliant inclusion and diversity (I&D) practices are strategic imperatives for employers. However, expectations for I&D are not static. Legal rulings, social expectations, and global workforce dynamics consistently shift and evolve, and organizations must be prepared to shift and evolve along with them.
Choosing to stay the course on legally compliant I&D is not only an affirmation of commitment but a deliberate business decision that will build trust, strengthen talent retention, and reinforce a long-term strategic vision. SHRM’s Belonging Enhanced by Access Through Merit (BEAM) Framework for I&D strengthens accountability, helping organizations avoid exclusionary practices and remain responsive to evolving legal standards.
The information included here can help HR professionals and others make the case to leaders that advancing this work lawfully and effectively can create meaningful and lasting impact on both the cultural and financial health of your organization.
BEAM Framework Principles
Inclusion
Opportunities open to all, without regard to a person's sex, race, or any protected status and without excluding any protected group.
Access for All
Initiatives designed to engage talent without regard to a person’s protected status, ensuring people from all backgrounds can access opportunities.
Merit-Driven
Opportunities based on job-related qualifications and requisite skills, knowledge, or performance without unlawful preferences or quotas.
Inclusive and Accessible Information
Initiatives clearly and consistently communicated through inclusive and broad-reaching channels.
Skills-First Optimization
Providing or supporting skill-building to help all eligible people improve skills, qualifications and relevant experience.
Drafting the Future of Inclusion & Diversity.
Louisville, KY | October 26-29
The Benefits of Legally Compliant I&D
One point remains constant: Organizations that actively embed legally compliant I&D into their business strategies benefit from workforce unity along with real business accretive outcomes such as stronger innovation, increased employee engagement, better decision-making, and sustainable growth.
Embedding legal, merit-driven I&D into company strategies is a pivotal step for companies aiming to align with the evolving workforce and market dynamics. Research has shown that companies with diverse workforces — those that that reflect a wide range of backgrounds and identities — benefit in myriad business areas:
Financial performance
Organizations among the top one-fourth in terms of workforce diversity were 39% more likely to outperform all expectations and 27% more likely to outperform financial expectations, McKinsey found in its 2023 diversity survey.
Talent acquisition and retention
Four-fifths of workers surveyed in August 2024 by The Conference Board said they support their organization’s I&D efforts, and two-thirds said they would not work for a company that doesn’t take I&D seriously or would only do so reluctantly.
Employee engagement and performance
Research published in 2024 in the International Journal of Multidisciplinary Scientific Research and Development found that organizations with strong I&D initiatives reported higher engagement and innovation levels.
These advantages underscore why inclusion must be viewed both as a compliance obligation and as a core driver of performance and competitive advantage.
Establishing New I&D Initiatives or Strategies
Not all organizations are at the same stage in their I&D journey. In fact, many HR professionals are tasked with advancing legal I&D work despite having limited guidance, resources, or a clear foundation to build upon. A practical, step-by-step framework will help you design and implement compliant, performance-driven I&D strategies from the ground up.
How to Develop a Legally Compliant I&D Initiative
- Identify business objectives. Begin by defining clear business goals that align with the organization’s vision to ensure the I&D program supports overall strategic priorities.
- Compile data. Gather and analyze relevant workforce, market, and industry data to establish a baseline and uncover meaningful insights for your I&D efforts.
- Identify needs and focus areas. Assess current gaps, obstacles, and challenges as well as opportunities within the organization to pinpoint where I&D initiatives can drive the most impact.
- Procure buy-in and support. Securing executive leadership support is critical for I&D initiatives because it sets the tone, resources, and accountability. Engage key stakeholders and executives with a well-crafted business case that links legally compliant I&D initiatives to measurable outcomes and organizational success.
- Audit I&D-related policies and practices. Conduct a thorough review of current policies, practices, and programs to identify areas for growth and improvement and ensure alignment with I&D goals.
- Establish policies and procedures that don’t currently exist. Consider the unique needs, perspectives, and cultural nuances of your organization to ensure the programs are effective, inclusive, and support equal opportunity and fairness in the workplace.
- Check for legal compliance. Use the BEAM Framework and legal counsel to ensure all I&D initiatives align with local, state, and federal laws.
- Implement and communicate the initiatives. Roll out the legally compliant I&D program with clear communications to employees, reinforcing the organization’s commitment to inclusion and equal opportunity.
- Measure the impact. Track progress through key metrics and feedback to evaluate how effectively the initiatives are achieving their objectives.
- Review and calibrate. Regularly assess the program’s effectiveness and make necessary adjustments to address challenges and improve outcomes.
Pro Tip
It’s important that the organization’s I&D goals are tied to business outcomes, such as improved innovation rates, faster hiring, or stronger customer satisfaction.
Advancing I&D Initiatives
As I&D strategies mature, leading organizations shift focus from intent to impact by aligning initiatives with measurable outcomes, legal soundness, and accretive business value. Advancing existing I&D programs requires a self-assessment of where your organization is on the journey and how the initiatives align with organizational goals and legal requirements.
It’s equally important to ensure these legally compliant I&D efforts are built to last. Integrating measurement frameworks into current programs, reassessing outdated policies, and anchoring strategies in strong legal and compliance practices enable organizations to innovate responsibly while upholding integrity.
Measuring the Impact of I&D Programs
To evolve beyond commitment statements, organizations must treat I&D as a measurable strategy and business imperative. Options that assess the effectiveness of an existing initiative include:
- Adopt a legally sound scorecard: Use return on investment metrics such as employee retention, engagement scores, and leadership pipeline opportunities.
- Behavior change metrics: Evaluate whether training and programs are resulting in inclusive behaviors using manager evaluations, peer feedback, and pulse surveys.
- Look beyond headcount: Analyze all employee demographic groups to see if a wide range of talent is being hired, developed, promoted, and retained.
Pro Tip
To ensure long-term success, treat your I&D initiative as a dynamic process rather than a one-time project. Regularly revisit your framework, adapt to evolving organizational needs, and leverage employee feedback to continuously refine and enhance your strategy.
Embedding Legally Sound Practices into I&D Strategy
As I&D programs evolve, compliance with local and federal laws and obligations must remain a foundational element — not a final checkpoint. Ensuring that your initiatives are legally compliant, defensible, and aligned with business goals strengthens their long-term credibility and impact. This means involving legal/compliance, HR, and risk teams early in the process, staying agile amid shifting laws and litigation risks, and grounding all strategies in evidence-based, measurable practices.
By embedding legal rigor through practices such as structured interviews, pay equity audits, and the BEAM Framework, organizations can build legally compliant I&D programs that are not only inclusive but also resilient, responsible, and strategically aligned.
What Is Legal I&D?
Legally compliant I&D refers to any initiative, policy, communication, or decision aimed at promoting equal opportunity, fairness, merit, and inclusion for all without favoring or excluding anyone based on a protected characteristic.
Importantly, legal I&D does not mean giving unlawful preference to one group over another. As emphasized by the U.S. Equal Employment Opportunity Commission (EEOC), all employer programs, including I&D programs, must comply with federal anti-discrimination laws and ensure that a person’s protected status is not a factor in granting or denying an opportunity to the person or subjecting the person to a benefit or harm.
Legally compliant I&D is not merely the absence of discrimination — it is the presence of fairness, merit, respect, and equal opportunity in employment practices, processes, and employment decision-making. It requires taking actions that are unrelated to a person’s protected status while embedding inclusion into the employer’s policies, practices, and culture.
Related Laws, Policies, Executive Orders, and Guidance
It is essential to understand the legal landscape surrounding I&D. Including foundational federal laws that prohibit workplace discrimination and early 2025 executive orders (EOs) affecting how I&D initiatives are structured and evaluated, today’s leaders must navigate a dynamic and often complex compliance environment.
Important federal laws, regulations, court rulings, and guidance to know include:
- Memorandum from the Attorney General: Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination.
- EEOC Memorandum: What You Should Know About DEI-Related Discrimination at Work.
- EEOC Technical Assistance Document: What to Do if You Experience Discrimination Related to DEI at Work.
- Office of Personnel Management Memo: Includes guidance on lawful ERGs or affinity groups.
Knowing these laws is essential for employers because in early 2025, the U.S. attorney general directed the U.S. Department of Justice to pursue investigations of private-sector companies if it suspects their I&D practices do not comply with federal law.
In addition to monitoring federal changes, it is equally critical for HR professionals to stay informed about state and local compliance requirements, which may differ or evolve independently. A thorough understanding of these regional regulations ensures that I&D initiatives remain both effective and legally sound across all jurisdictions in which an organization operates.
Pro Tip
Collaborate proactively with legal and compliance teams from the outset to identify potential risks and ensure alignment with anti-discrimination laws. This partnership will help you design initiatives that are both inclusive and legally defensible, minimizing exposure to litigation while maximizing strategic impact.
Pro Tip
Stay ahead of evolving legal landscapes by conducting regular compliance audits and monitoring changes in federal, state, and local regulations. Use tools such as the BEAM Framework and legal counsel to ensure your I&D programs remain resilient, adaptive, and compliant in all jurisdictions where your organization operates.
Additional Requirements for Federal Contractors
Recent EOs issued by President Donald Trump have created confusion and compliance challenges for federal contractors navigating shifting regulations. Federal contractors must stay informed about current laws and EOs to ensure their I&D initiatives align with legal requirements while fostering inclusive workplaces and equal opportunity. Remaining adaptable and consulting legal experts can help organizations balance compliance with meaningful I&D efforts.
Federal Contractor Obligations Scope and Applicability*
| Section 503 of the Rehabilitation Act of 1973 | Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) | |
|---|---|---|
| Basic Coverage (General nondiscrimination provisions) | A federal contract or subcontract of $15,000 or more | A federal contract or subcontract of $150,000 or more |
| Plan Development (Requirements to develop and maintain equal opportunity plans) | A contract of $50,000 or more and 50 or more employees | A contract of $150,000 or more and 50 or more employees |
*Requirements under Section 503 and VEVRAA do not apply to federally assisted construction contractors.
Veterans in the Workplace
The Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) requires federal contractors and subcontractors with a contract worth $150,000 or more to provide information on open positions to the appropriate Employment Service Delivery System (ESDS), also known as a State Job Bank. Among other compliance obligations, federal contractors must engage in efforts to identify and attract qualified protected veterans through various channels including partnerships with veterans organizations and outreach to local American Job Centers. The full list of VEVRAA regulatory requirements may be found at 41 CFR Part 60-300.
Annual reporting obligations: Complete VETS-4212 Report annually between Aug. 1 and Sept. 30) and develop equal opportunity plans for protected veterans if the above contract threshold is met.
Persons with Disabilities in the Workplace
Section 503 of the Rehabilitation Act of 1973 requires federal contractors and subcontractors with contracts of $15,000 or more to take action to employ and advance in employment qualified workers with disabilities. Compliance obligations include outreach and positive recruitment activities reasonably designed to effectively recruit qualified workers with disabilities. Contractors must also ensure accessibility in application processes and reasonable accommodations. The full list of Section 503 regulatory requirements may be found at 41 CFR Part 60-741.
Annual reporting obligation: Develop equal opportunity plans for people with disabilities if the above contract threshold is met.
SHRM Webinar
Pro Tip
The Department of Labor has proposed eliminating the Office of Federal Contract Compliance Programs in its 2026 budget. If this change happens, the agencies responsible for enforcing Section 503 and VEVRAA might change. Watch SHRM's Employment Law and Compliance coverage to stay up-to-date.
Expert Advice
SHRM is producing a series of webinars to help companies understand the impact of the recent executive orders and ensure compliance with federal regulations. They are valuable training tools for HR pros and other leaders within organizations.
Webinar
DEI Executive Orders 101
Delve into the implications of the executive orders and learn how SHRM’s BEAM Framework can guide your organization through these changes.
Webinar
First 100 Days
Recap of key administrative and legislative actions from the first 100 days and their direct impact on HR and workplace policies.
Webinar
Impacts on Gender
One of the orders recognizes only two sexes — therefore, it’s crucial to understand the implications for workplace inclusion and gender pay equity.
Webinar
Preparing Your Workplace for Immigration Enforcement
Learn how to proactively manage and support your workforces amid evolving immigration policies and U.S. Immigration and Customs Enforcement (ICE) actions.
Webinar
Navigating I&D Compliance
Get practical steps to review and modify your hiring, promotion, and training procedures to prevent unintentional preferential treatment.
Webinar
Changes to Disparate Impact
Learn about how changes to the government's enforcement approach to the legal doctrine of disparate impact affects employers.