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- Key upcoming changes in 2025 include updates to overtime rules, pay transparency requirements, and more.
- Companies must review policies related to remote work, employee rights, and job posting requirements to align with new legislative mandates.
- Ongoing monitoring of state-specific laws and global labor regulations is essential as businesses adapt to a changing legal environment.
As 2025 approaches, human resources leaders face a complicated environment of changing employment laws and regulations that will directly impact how companies hire, compensate, manage remote work, and safeguard employee rights.Â
From updated overtime pay rules to anti-discrimination laws, businesses must proactively prepare for these significant changes to stay compliant and avoid costly penalties.
Here’s what HR leaders need to know and do now to stay ahead of key employment law changes coming in 2025.
Overtime Pay Rule Changes (U.S.)
HR leaders need to adjust their strategies following a recent court decision that vacated the 2024 Overtime Rule. This rule would have raised salary thresholds for the Fair Labor Standards Act’s (FLSA) executive, administrative, and professional (EAP) exemptions, as well as the highly compensated employee (HCE) exemption.Â
However, with the court ruling, the salary thresholds revert to those set by the 2019 Overtime Rule. Specifically, the EAP salary threshold is $684 per week ($35,568 annually), and the HCE exemption is set at $107,432 annually.
This means that the anticipated salary increases, which would have impacted millions of workers, will no longer take effect. HR leaders should remain cautious and ensure that any changes made to employee classifications or compensation, in anticipation of the 2024 increase, are in compliance with the 2019 thresholds.
What HR Leaders Need to Do Now:
1.Reassess employee classifications
Ensure current salary structures align with the 2019 Overtime Rule thresholds ($684/week for EAP, $107,432 annually for HCE).
2.Consult legal counsel
If any changes were made in anticipation of the 2024 increase, consult legal experts to ensure compliance.
3.Stay vigilant about state requirements
Monitor state-specific salary thresholds, as they may differ from federal standards.
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4.Verify FLSA exemption criteria
Ensure compliance with FLSA’s broader exemption criteria, including job duties and the basis of salary payment.
5.Watch for future changes
Stay informed, as the DOL has appealed the decision, and further changes may be on the horizon.
California Employment Law Updates
California has long been at the forefront of progressive employment laws, and 2025 will see several changes that HR leaders in the state need to prepare for. Key updates include the expansion of anti-discrimination laws, new social compliance audit requirements, and restrictions on the use of driver’s licenses in job postings.
What HR Leaders Need to Do Now:
1.Update Anti-Discrimination Policies
California’s new anti-discrimination laws expand the definition of race to include traits historically associated with race, such as hair texture and hairstyles (e.g., the CROWN Act). HR leaders should ensure that workplace discrimination policies reflect these expanded definitions and provide training on their implications.
2.Social Compliance Audits
Employers in California will be required to undergo regular social compliance audits. These audits assess compliance with labor laws, health and safety regulations, and employee rights protections. Specifically, starting January 1, 2025, AB 3234 mandates that employers who choose to conduct a “social compliance audit” to assess potential child labor in their operations must publish the audit results on their company website. HR departments should familiarize themselves with audit requirements and start preparing to meet these obligations.
3.Review Job Posting Requirements
New rules will restrict the use of driver’s licenses as a requirement for job applications unless the license is directly relevant to the position (e.g., delivery roles). Beginning January 1, 2025, job postings, applications, and other pre-employment materials cannot require a driver’s license unless specific conditions are met. HR leaders should ensure that job postings are compliant and only request necessary documentation.
4.Conduct Equity Audits
As part of California’s broader push for diversity and inclusion, businesses should begin conducting equity audits to assess how workplace practices may unintentionally perpetuate inequality and discrimination.
Pay Transparency and Reporting
In recent years, several states and regions have enacted laws requiring employers to be more transparent about pay scales and salary information. In 2025, expect more stringent regulations surrounding pay transparency to be implemented in jurisdictions across the U.S. The aim is to close the gender pay gap and create more equitable workplaces by requiring companies to disclose pay ranges in job listings and provide pay gap reports.
What HR Leaders Need to Do Now:
1.Revise Compensation Policies
Employers should revisit their compensation structures to ensure they comply with new pay transparency regulations. HR teams should work with legal counsel to ensure job descriptions and salaries are aligned with disclosure requirements.
2.Implement Pay Equity Audits
Regularly conduct internal pay equity audits to assess whether pay disparities exist within the company. If discrepancies are found, HR should work with leadership to develop strategies to close the gaps.
3.Communicate Pay Information Clearly
HR leaders should be prepared to communicate pay ranges openly with job candidates and employees to comply with new reporting requirements and foster a culture of transparency.
Remote Work Policies and Employee Rights
The rise of remote and hybrid work has introduced a host of new challenges, particularly in the areas of employee rights, workplace safety, and data protection. As more companies embrace remote work, governments are introducing new laws to address these issues.Â
Considering many companies are now hiring across borders, being aware of international law changes is key.Â
For example, in Ontario, Canada, the Occupational Health and Safety Act (OHSA) currently does not apply to work performed at a private residence. However, Bill 190, the Working for Workers Five Act, 2024, which is still moving through the legislature, proposes changes that would extend the OHSA to telework conducted at a private residence.Â
This amendment would ensure that all workers who work remotely are subject to the same health and safety standards as those working in traditional workplaces.
What HR Leaders Need to Do Now:
1.Review Remote Work Policies
HR should ensure that remote work policies are up to date, covering issues such as health and safety, data protection, and equipment provision. Employers must also consider the mental and physical wellbeing of remote employees and provide adequate support.
2.Data Security and Privacy
With remote work becoming more prevalent, HR leaders must work closely with IT to implement robust data security measures to protect sensitive information, particularly in sectors that handle confidential data. This includes ensuring employees are aware of their responsibilities when working remotely.
3.Cross-Border Work Considerations
As remote work becomes more global, HR must be aware of the challenges and legal implications of managing a geographically diverse workforce. This includes understanding tax implications, labor laws, and benefits regulations in different countries.
With the new regulations coming into effect in 2025, HR leaders must act now to ensure compliance and prepare their organizations for changes in hiring practices, pay transparency, remote work policies, and employee rights.Â
By staying informed, updating policies, and training employees, HR can not only avoid penalties but also embolden a more inclusive, transparent, and supportive work environment that aligns with changing legal requirements.Â
The key is to be proactive: anticipate these changes, address them early, and continue to adapt in the face of ongoing legislative changes.
