August Legal Updates
This month brought a wave of legislative and regulatory updates that employers across the U.S. should keep on their radar. From independent contractor benefits to new PTO rules and AI in hiring, here’s what’s changing—and what it means for your organization.
Independent Contractor Bill Introduced in Senate
Three Republican senators—Bill Cassidy (R-LA), Rand Paul (R-KY), and Tim Scott (R-SC)—have introduced legislation aimed at modernizing labor laws for independent contractors. These bills propose:
- Voluntary Benefits for ICs: Employers can offer health and retirement benefits without reclassifying contractors as employees (Cassidy).
- Retirement Access: ICs may participate in retirement plans (Cassidy).
- Worker Classification Clarity: A single employment test under the Fair Labor Standards Act (Scott).
- Association Health Plans: Small businesses and gig workers could join together for coverage under ERISA (Paul).
Big Beautiful Bill: Tip & Overtime Income Deductions
A new tax bill offers income deductions for tipped and overtime workers starting in 2025.
- Eligibility:
- Individuals earning ≤ $150K; couples ≤ $300K
- Applies 2025–2028 (unless extended)
- Tip Deduction: Up to $25,000 for reported cash tips in eligible occupations (list due by Oct. 2, 2025)
- OT Deduction:
- Up to $12,500 (individuals) or $25,000 (joint)
- Applies only to the premium portion of OT wages
See your tax advisor or the firm's client alert for more.
Maine’s New PTO Law
Effective September 24, 2025, Maine's LD 55 allows employees to carry over unused PTO without affecting new accruals.
- Old Cap: PTO balance limited to 40 hours (carryover reduced new accrual)
- New Rule:
- Carryover allowed plus full 40-hour annual accrual = max 80 hours
- Employers may still limit use to 40 hours per year
Action Step: Update policies and prepare for compliance.
Kentucky OSHA & Judicial Review Updates
Effective June 27, 2025:
- HB 398: Aligns KY OSHA with federal standards, including:
- New “de minimis” violation class
- Legal cost recovery for employers
- Statute of limitations for citations
- SB 84: Replaces Chevron deference with de novo judicial review for agency decisions
Public hearings scheduled for August 21 and September 22
Virginia Employer Liability Expansion
New law effective July 1, 2025 expands employer liability for employee misconduct involving “vulnerable victims” (e.g., patients, disabled individuals, care facility residents). Courts will now assess whether the employer could have reasonably controlled the risk.
Employers should revisit hiring, training, and supervision policies.
New York COVID-19 Paid Emergency Leave Ending
New York’s Paid Emergency Leave for COVID quarantine ends July 31, 2025. As of August, employees must use:
- NY Paid Sick Leave
- Paid Family Leave
- Earned Sick and Safe Time
Texas NDA Ban in Sexual Abuse Cases
“Trey’s Law,” effective September 1, 2025, voids NDAs related to sexual abuse in workplace or settlement agreements—even retroactively. Confidentiality on other settlement terms (e.g., amount) is still allowed.
Texas Employment Law Updates
- PEO Grace Period (SB 1254): PEOs retain co-employer status up to 18 months after license expiration
- Unemployment Redefinition (HB 3699): Clarifies “last work” to reduce fraud (effective Jan. 1, 2026)
- Reproductive Health Parity (SB 1257): Requires coverage for post-transition care in all TX health plans
E-Verify Changes: Increased Burden for Employers
As of June 23, 2025, E-Verify no longer auto-notifies of revoked work authorizations. Employers must manually review “Status Change Reports” and reconcile A-numbers.
Ensure HR is trained and compliance procedures are updated.
California: Total Ban on Handheld Phone Use While Driving
The People v. Porter (2025) ruling confirms that even holding a phone for GPS use violates California's hands-free law. Employers should update mobile policies for any employee driving on the job.
Rhode Island Employment Updates
Effective June 24, 2025 – January 1, 2026:
- Menopause Protections: Anti-discrimination law now includes menopause-related symptoms.
- Wage Notice Law (Jan 2026): Employers must give all new hires a detailed pay and benefits notice.
- Minimum Wage Increases:
- $16/hour in 2026
- $17/hour in 2027
FTC Noncompete Rule in Limbo
The FTC has paused its appeal to defend the noncompete ban after a Texas judge blocked the rule. Leadership changes may affect whether the agency continues pursuing it.
OSHA Rulemaking Updates
- Withdrawn: MSD column from OSHA 300 logs
- Proposed: Remove COVID-specific recordkeeping for healthcare
- Comments due: September 2, 2025
Missouri Sick Leave & Minimum Wage Repealed
As of August 28, 2025:
- Repeals state-mandated sick leave
- Reverses Prop A’s minimum wage increases
Employers can set their own policies but must comply with federal and local laws.
OFCCP Closure Letters & Clarifications
As of July 2, 2025, the OFCCP:
- Ends paused audits (Section 503 & VEVRAA)
- Will send Administrative Closure Letters to affected contractors
- Compliance still required—just no current evaluations
California: New AI Use Rules in Employment
Effective October 1, 2025, California will regulate the use of AI and automated decision systems (ADS) in hiring and employment.
Employers must:
- Notify applicants/employees when ADS is used
- Retain related records for 4 years
- Conduct bias testing and provide accommodations
Maryland Court: “De Minimis” Rule Applies to Wage Claims
Maryland’s Supreme Court has ruled that trivial time periods (e.g., waiting in line for under 5 minutes) may not be compensable. Helpful precedent for employers defending minor wage claims.
DOL Proposes Repealing 60+ Regulations
The Department of Labor is reviewing over 60 workplace rules for repeal or revision—impacting:
- Overtime for home health and disabled workers
- H-2A migrant worker protections
- OSHA enforcement scope
Public comment period is underway.
Cleveland Salary History Ordinance
Effective October 27, 2025, covered employers may not:
- Ask about salary history
- Use it to set offers or compensation
- Must disclose salary range in job postings
Fines range from $1,000 to $5,000.
Pittsburgh Paid Sick Leave Expanded
Effective January 1, 2026:
- Accrual rate improves: 1 hour per 30 hours worked
- Larger employers: 72 hours max
- Smaller employers: 48 hours max
Trump’s NLRB Picks Signal Shift
President Trump has nominated two Republicans—Scott Mayer and James Murphy—to the NLRB. If confirmed, the board would regain a Republican majority and could reverse recent pro-union decisions.
Rhode Island Captive Audience Law
Rhode Island now bans mandatory employer meetings on union or political topics. Employees who opt out cannot be penalized and may sue for violations.
Puerto Rico Employment Law Updates
- Legal Representation: Employees now have government-supported representation in arbitration (Act 37-2025)
- Veteran Hiring Preference: Expanded across job types (Act 26-2025)
If you’d like help assessing the impact of these changes on your business—or developing compliant policies—reach out to our team.
