Labor Laws 2025: Key Changes, Wage Hikes & Compliance Updates
We update this article annually. Explore our previous labor law updates for 2024, 2023, 2022 and 2021.
As 2025 kicks off, a fresh wave of labor laws and regulations is reshaping workplaces across the country. With a new presidential administration at the helm and evolving societal priorities, businesses face a dynamic legal environment that requires adaptability and vigilance. Staying ahead of these changes isn’t just about avoiding penalties—it’s about fostering a compliant, inclusive, and forward-thinking workplace that attracts and retains top talent.
This year brings significant updates, from minimum wage hikes and expanded worker protections to new rules on digital privacy and the use of AI in the workplace. While this article covers some of the most important labor laws taking effect this year, it’s not an exhaustive list—especially when it comes to the many minimum wage updates happening across the country. Our goal is to keep you informed, not to provide legal advice, so be sure to check with a legal expert to understand how these changes may impact your organization.
Here’s a breakdown of the important labor law changes to watch in 2025:
An Increase in Minimum Wages
Beginning on January 1, 2025, 21 states and 48 cities and counties increased their minimum wages. In many places, the wage floor reached $15 an hour. In two states and 38 other localities, the wage floor increased to $17 an hour for some or all employees. Five other states and 23 more localities will follow suit later in 2025, lifting their minimum wages to $15 an hour or more.
Updated Guidance on the Equal Employment Opportunity Commission’s “Protected Characteristics”
The EEOC’s updated guidelines give employees specific, factual examples of what constitutes unlawful workplace harassment. The examples include common scenarios such as unwanted advances at holiday parties and commenting on an employee’s natural hair. The updated guidelines can give employers insight into how the EEOC enforces the standards of harassment and employer liability under Title VII, ADA. Employers should note the EEOC’s “protected characteristics” and what workplace behavior that rises to the level of harassment.
Fair Labor Standards Act (FLSA) Rule Vacated
Last April, the Department of Labor updated the criteria for overtime exemption under the Fair Labor Standards Act (FLSA). This January update would have increased the minimum salary thresholds for certain employees to qualify for overtime exemptions. However, a federal district court vacated the rule in November, just two months before the increase was to take effect. As of January 2025, the salary level returns to what it was prior to the update. Employers, too, can roll back any increases they made in response to the initial passing of the rule.
Enhanced Requirements for H-2A Visas
On January 17, the Department of Homeland Security introduced enhanced requirements for the H-2A nonimmigrant visa program. The final rule strengthens worker protections and imposes stricter penalties on employers charging prohibitive fees or violating labor laws. It also enhances the flexibility for H-2A participants.
California Strengthens its California Consumer Privacy Act (CCPA)
Employers are dealing with multiple updates to the CCPA that took effect on January 1, 2025. Updates include an amended definition of “personal information” to include various “artificial intelligence systems … capable of outputting personal information,” includes traits like hair texture and protective hairstyles into its definitions of “race,” and added “neural data” to its definition of sensitive and personal information.
California Prohibits Forced Use of Employee Digital Replicas
Starting January 1, 2025, employees cannot create and use a digital replica of an individual’s voice or likeness to do labor that the individual would otherwise have performed in person.
Illinois Protects Employees from Mandatory Religious or Political Meetings
A state senate bill made it illegal for employers to discharge or discipline employees who refuse to attend mandatory employer-sponsored meetings “on religious or political matters.” Illinois joins states like Connecticut, Maine, Minnesota, New York, and Oregon in protecting employees from retaliation for refusing to attend meetings that could include employer-sponsored meetings about unions or labor organizing.
Things to Watch in 2025
In 2017, the Department of Labor issued an employer-friendly rule regarding worker classification, allowing businesses more leeway in classifying workers as independent contractors. This ruling was reversed in 2024, though it remains to be seen if a new presidential administration will return the policy to its previous 2017 version.
Last October, a U.S. district court backed the Federal Trade Commission’s ban on non-compete clauses. The proposed ban would invalidate most existing non-competes and prohibit them in the future. The relevant cases remain in the courts. Employers should keep an eye on any outcomes that might affect their own contracts.
As labor laws and regulations continue to change, employers should regularly review and update HR policies to ensure compliance. Staying informed about the shifting legal landscape will help businesses and organizations avoid legal problems and maintain a safe, equitable, and welcoming work environment. Leveraging tools like Shiftboard’s workforce scheduling software can further protect your organization by automating compliance with labor laws, such as overtime rules, rest breaks, and scheduling transparency. Streamlining these processes not only reduces the risk of non-compliance but also supports a well-organized, productive, and engaged workforce.
