Top 2025 Employment Law Updates What Employers Need To Know

Bonisiwe Shabane

-Oct 31, 2025, 4:46 AM

top 2025 employment law updates what employers need to know

Employers entered the third quarter of 2025 facing a familiar challenge: keeping up with accelerating legal change. This quarter delivered not only new legal requirements, but also deeper operational risks. From tightened fair chance protections in Philadelphia and Washington to expanded salary disclosure mandates in Massachusetts and Cleveland, employers were forced to reexamine how they evaluate candidates, structure compensation, and manage workplace risk. At the same time, state lawmakers doubled down on regulating AI in employment, clarified cannabis testing restrictions, and added new layers to I-9 and E-Verify procedures. What was once a series of policy updates has become a coordinated shift in how compliance must be integrated into hiring workflows. Below is your Q3 2025 Compliance Playbook.

Each development may require operational changes in the way employers hire, vet, and retain talent. Beginning January 6, 2026, Philadelphia employers must implement new lookback periods and procedural protections when using criminal history in hiring. Misdemeanor convictions are limited to a four-year lookback window, and summary offenses are excluded altogether. Expunged and sealed records must not be considered even if reported. The amended ordinance also requires employers to issue a written notice before taking any adverse action based on a criminal record. That notice must include a summary of rights under the Philadelphia Fair Criminal Record Screening Standards Ordinance, a statement that the employer will consider evidence of error, rehabilitation, or mitigation, and instructions for submitting...

Employers must then provide the applicant ten business days to respond before finalizing the decision. Personal care assistants, or PCAs, are vital to providing comprehensive care for patients. They... Comprehensive background checks can alert employers to potential issues with prospective... As an HR or talent management pro, you know background checks are valuable in protecting your... The second half of 2025 is bringing some of the most impactful employment law changes we’ve seen in recent years.

From expanded pay transparency mandates to evolving leave laws and wage thresholds, staying ahead of these updates isn’t just smart—it’s essential for avoiding costly compliance risks. Our recent 2025 Legislative Update Webinar brought together MP’s HR and compliance experts to break down the changes employers need to know and the actions to take now. This blog recaps the top takeaways from the session. Several states—including Illinois, Minnesota, New Jersey, Vermont, and Washington—have new pay transparency requirements taking effect mid-year. These laws affect not only local employers but also companies hiring remotely into those states. States like Alaska are raising both their minimum wage and exempt salary thresholds as of July 1, 2025.

Employers must ensure payroll systems are updated and that exempt employees meet the new salary test to avoid misclassification. Paid sick leave requirements are expanding, with some states mandating accrual from day one of employment. Leave policies must be updated to meet both state and local standards, particularly in jurisdictions like Alaska and Washington. The U.S. District Court for the Eastern District of Texas has vacated the Department of Labor's rule raising the salary threshold for exempt workers. This means we’ve now returned to the 2019 rule with a threshold of $684 per week.

This situation mirrors what happened during Trump's first term when an Obama-era salary threshold increase was vacated, followed by a more modest increase in 2019. Employers should be prepared for a potential moderate increase in the salary threshold at some point during this administration. The Trump administration is not expected to appeal a Texas District Court’s decision to stop the Federal Trade Commission (FTC) from banning non-compete agreements. This ban was slated for September 2024, but instead, non-compete regulation has shifted to the state level, with many states introducing their own legislation on the issue. Even with an administration that appears unwilling to enforce the FTC non-compete ban, there may still be scrutiny from the agency focused on employment matters. At a Feb.

24 event, new FTC Chairman Andrew Ferguson announced a task force to investigate corporate actions that harm workers in ways that violate antitrust and consumer protection laws. He indicated this will be a top priority. For now, employers should have legal counsel review their existing agreements with restrictive covenants to ensure that the covenants are narrowly tailored and enforceable. Several 2024 Fourth Circuit and U.S. Supreme Court decisions provide employers with additional guidance on hard-to-navigate issues around FMLA, ADA, mental health, and taking adverse actions against employees. In Muldrow v.

City of St. Louis, the Supreme Court unanimously ruled that a job transfer can be an adverse employment action under Title VII even if the employee maintains the same rank and pay. If the transfer results in loss of certain benefits, perks or standing, it can be considered adverse. Employment law is constantly evolving, and 2025 is no exception. Starting September 1, 2025, several new federal and state laws will go into effect, impacting how businesses hire, pay, and manage their teams. If you’re an employer, it’s time to review your policies and ensure compliance.

In this blog, we’ll break down the key changes and how they may affect your business. Corri Fetman & Associates, Ltd., a trusted Chicago employment law attorney, is here to help you navigate these updates. The U.S. Department of Labor has introduced a new six-factor test under the Fair Labor Standards Act (FLSA) to determine who qualifies as an independent contractor. This expanded test replaces the simpler two-factor guidelines, meaning more workers may now be classified as employees. This reclassification is critical since employees are entitled to overtime pay and benefits, unlike independent contractors.

Employers should take proactive steps to avoid misclassification claims by updating contracts and policies. States like Illinois are expanding paid sick leave and family leave laws in 2025. Employers must update their leave policies to align with these changes or risk penalties, disputes, and lawsuits. Reviewing and adjusting your internal policies with the help of an attorney will save time and reduce risks. The new year is all about fresh starts and celebrations—but for HR professionals, it also kicks off the busiest season for employment law compliance. Starting January 1, 2025, over fifty new employment laws took effect across the U.S.

For multi-state employers, keeping track of all these changes can feel overwhelming. But don’t stress—we’re here to help you stay ahead of the game. Pay transparency is gaining momentum nationwide. In 2025, two more states have joined the movement, requiring employers to disclose salary ranges in job postings. This trend pushes organizations to reevaluate compensation strategies, improve internal pay equity, and ensure compliance with state-specific requirements. Beyond pay transparency, here are a few major changes employers need to prepare for:

Minimum Wage Increases – Several states and cities are raising their minimum wages. Employers must review and adjust employee pay rates to stay compliant. As we move further into 2025, the employment law landscape continues to evolve rapidly, driven by significant regulatory changes and emerging workplace dynamics. For employers and counsel, staying ahead of these trends is crucial for effectively advising clients and mitigating risks. Here are the key employment law trends to watch in 2025: The new presidential administration has brought a wave of changes, particularly through executive orders and agency actions.

The focus has shifted toward reducing federal oversight and regulatory burdens on businesses. However, states are stepping in to fill the gaps, potentially increasing enforcement at the state level. This dual dynamic requires employers to stay vigilant and compliant with both federal and state regulations. The Equal Employment Opportunity Commission (EEOC) has undergone significant leadership changes, impacting its enforcement priorities. The EEOC is now focusing less on systemic discrimination and more on individual cases. Additionally, there is a renewed scrutiny on Diversity, Equity, and Inclusion (DEI) programs, with the potential for increased reverse discrimination claims.

Employers should review their DEI initiatives to ensure they comply with current legal standards. Artificial intelligence (AI) is set to revolutionize workplace operations, particularly in white-collar sectors. The Trump administration has adopted a more open approach to AI, encouraging its integration to enhance efficiency. However, this technological shift brings legal challenges, including potential job displacement and the need for new regulatory frameworks. Employers must navigate these changes carefully to avoid litigation related to AI implementation. The post-pandemic era has seen a push for employees to return to physical workplaces.

While remote and hybrid work arrangements have become the norm, some industries are demanding a return to traditional office settings. This shift can lead to disparate impact claims, particularly from employees with disabilities or caregiving responsibilities. Employers should implement return-to-work policies that consider these potential legal implications.

Top 2025 Employment Law Updates What Employers Need To Know

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