Compliance Corner: An Employer’s Compass for Navigating 2025 HR Laws and Trends

As we move through 2025, employers face a dynamic landscape of human resources (HR) laws and trends that demand attention and adaptation. From evolving regulations to the implications for diversity, equity, inclusion and belonging (DEI&B) initiatives, staying informed and proactive is crucial. Here is a brief overview of what employers need to know—and ways to best navigate a turbulent time effectively.

Key HR Regulations and Compliance Changes

Pay Transparency Laws

Pay transparency continues to gain momentum across the United States. In 2025, several states, including Illinois, Minnesota, New Jersey, Vermont and Massachusetts, have enacted laws requiring employers to disclose salary ranges in job postings. This trend aims to promote fairness and reduce pay disparities based on gender, race and ethnicity. Employers must ensure their compensation practices are transparent and compliant with these new regulations.

Artificial Intelligence (AI) and Generative AI Regulations

The rise of AI in HR processes brings both opportunities and challenges. New regulations are emerging to address concerns around bias, privacy and ethical use of AI. Employers implementing AI tools must stay updated on these regulations to avoid potential legal pitfalls and ensure fair and unbiased HR practices.

Fair Labor Standards Act (FLSA) Changes

The Fifth Circuit Court of Appeals ruled in late 2024 that the Department of Labor (DOL)’s final regulation to increase the salary threshold for overtime exemptions may be revisited. The DOL proposed FLSA update raises the salary threshold for overtime exemption from $43,888 to $58,656 annually. This change impacts compensation structures, particularly for middle management and professional roles. Employers need to audit exempt positions and consider salary adjustments or reclassifications to comply with the new threshold.

Return-to-Work Policies

Return-to-work policies continue to evolve, reflecting changes in workplace dynamics and employee expectations. Employers may need to consider structured hybrid models, office mandates, flexibility, employee autonomy and adjusting company policies. Review, adapt and find what works best for your organization and workforce.

DEI&B Implications for Private Employers

The environment for DEI&B initiatives continues to evolve and be challenged, particularly in the private sector. Recent executive orders and policy shifts have significant implications for DEI&B programs. Here are some things to know:

Executive Orders and Policy Shifts

In early 2025, two executive orders were issued, marking a shift in the federal government’s stance on DEI&B initiatives. These orders eliminate DEI&B programs within federal agencies, revoke affirmative action requirements for federal contractors and impose new compliance obligations. Private employers, especially federal contractors and grant recipients, must reassess their strategies to align with these changes.

Increased Scrutiny and Legal Risks

The Department of Justice (DOJ) has announced plans to investigate and penalize illegal DEI&B mandates in the private sector. Employers must ensure their DEI&B programs comply with anti-discrimination laws and avoid practices that could be perceived as preferential treatment. This includes reevaluating policies that tie compensation to diversity targets or require diverse interview pools.

Merit-Based Inclusion

Organizations are increasingly adopting merit-based inclusion frameworks that prioritize individual performance and qualifications over demographic considerations. This approach aligns legal requirements with business objectives, focusing on creating equitable opportunities for all employees while avoiding practices that could be seen as preferential.

EEO-1 Reporting

While federal contractors are no longer required to file EEO-1 reports, private employers should continue to collect and analyze workforce demographic data. This practice helps monitor hiring trends and ensure nondiscrimination, supporting compliance efforts and promoting a fair workplace.

Navigating the evolving HR landscape requires employers to stay informed and proactive. By understanding and adapting to new regulations and DEI&B implications, businesses can foster a compliant, fair and inclusive workplace. Employers should regularly review and update their policies, engage in continuous learning and seek legal counsel when necessary to ensure they remain ahead of the curve.

What specific HR challenges are you facing this year? Let’s discuss how you can address them effectively! Looking for additional guidance on how to traverse constantly changing compliance requirements? Get in touch with isolved HR Services today!