HR Compliance Trends to Watch in 2025

Pay transparency

Conversations around pay transparency have been gaining traction over the past few years. Thirteen states have already enacted laws requiring employers to disclose pay ranges in job descriptions and during the hiring process, and in 2025, expect more states, cities, and counties to join this movement.

This trend also reflects a greater shift to more transparent hiring practices, which companies embrace to build trust with candidates and current employees. Many younger applicants have even said they won’t consider applying for a job without a salary listed!

Even if your state hasn’t passed pay transparency laws yet, it’s worth adopting these practices to stay competitive and appeal to today’s workforce.

Artificial intelligence (AI) policies

Another trend from 2024 that will bleed into 2025 is AI. HR teams are already learning how to embrace AI in their software solutions and day-to-day operations to boost productivity while also trying to guide their organizations on the proper ways to utilize this tool safely and compliantly.

While we know the AI boom is not slowing down anytime soon, expect to see more regulations surrounding AI, especially when it comes to recruitment, since there are concerns about how effectively AI can avoid discrimination and maintain fairness in hiring.

HR professionals should consider implementing their own AI policies to provide guidelines for protecting candidate and employee data, along with examples of appropriate use cases to ensure compliance and prepare for any future legal changes.

Overtime rules

Overtime rules will be an evolving topic for employers in 2025, but unfortunately, there may be some waiting to do before we find out precisely what changes will be made.

Under the Biden administration, the Department of Labor (DOL) raised the salary threshold to $58,656, which would include roughly an additional 4 million workers under overtime coverage. This rule was planned to go into effect on January 1st, 2025.

As of November 15th, a federal judge in Texas blocked the rule, so now it is back up in the air what will happen and if there will be any increase. If it’s anything like Trump’s previous term, where a similar situation occurred with an Obama-era overtime rule, then there will still be an increase but a much smaller one.

In the meantime, some states are also considering removing state income tax on tips and overtime, and even Trump has called for ending taxes on overtime pay as part of his overall tax reform plans.

I-9 compliance

I-9 compliance is one area where HR professionals need to be proactive if they aren’t already taking the proper steps to maintain and document compliance since we know that a new presidential term will likely shake things up.

Thankfully, we can look back at Donald Trump’s previous term as president to help shed some light on what I-9 compliance could look like in 2025 under his new administration. When we do so, we see that the number of I-9 audits conducted during his last presidency spiked compared to other recent presidents as a result of greater immigration and employment law enforcement.

Given that his stance on immigration and employment law enforcement has not shifted much since then, we can anticipate a similar increase in audits this time around.

Remote work

Remote work isn’t going away, and neither are the compliance challenges associated with it. In 2025, employers will face an increasing need to manage state-by-state compliance requirements for remote employees. This includes ensuring correct tax withholdings, benefits eligibility, and adherence to local labor laws.

Additionally, employers will need to tighten up their onboarding processes for remote employees to maintain compliance by ensuring timely completion of employment forms, conducting compliant background checks, and delivering consistent training experiences across locations.

Establishing these best practices now will be essential to staying organized and avoiding letting risk slip through the cracks.

Background screening regulations

There will be many moving pieces when it comes to background screening compliance in 2025. A lot of it will come down to the state level, with laws like “ban the box” continuing to see momentum.

However, significant nationwide changes are also taking shape, driven by technological advancements. AI and automation can revolutionize background screening, transforming it into a faster, more accurate, and candidate-friendly experience by making it easier to quickly read and analyze data, reducing human error, and allowing for greater transparency.

The only issue is that the regulations surrounding AI and its ability to help make hiring decisions are still being determined, as we mentioned earlier. Since background screening is such a sensitive step in the hiring process, there will likely be some concern for the safety and protection of candidate data.

There’s also the question of ethics when it comes to social media screening and whether organizations will be incorporating it as a standard practice or choose to avoid the risk of stumbling across protected class information and ending up in muddy waters. Ultimately, the courts may be the ones who decide for companies, but we will see if evolving privacy laws end up restricting social media screening capabilities.