As we enter fall, significant federal and state developments are reshaping the HR and employment law landscape.
Below is a summary of key updates employers need to know.
On July 23, 2025, the House Committee on Education and the Workforce approved the Save Local Business Act, aimed at creating a clear and narrow joint employer (JE) standard under both the NLRA and the FLSA.
Highlights:
A business is a joint employer only if it exercises “direct, actual, immediate, and significant” control over another employer’s employees.
Control must cover essential conditions like hiring, firing, wages/benefits, supervision, and scheduling.
Designed to stabilize years of fluctuating JE standards tied to presidential administrations.
Impact:
Franchisors, staffing agencies, PEOs, and industries with complex employment relationships would face less risk of joint employer liability. Labor advocates oppose the bill, citing reduced worker protections.
Outlook:
Senate prospects remain uncertain, and ongoing litigation over the Trump-era NLRB rule adds to the legal haze.
On July 31, 2025, the Senate Appropriations Committee advanced its FY26 funding bill, allocating $13.7 billion to the Department of Labor—a 3% increase over FY25—and rejecting proposed cuts to job training and enforcement programs.
Preserved Programs Include:
Job Corps
Senior Community Service Employment Program
Office of Federal Contract Compliance Programs
Enforcement agencies like WHD, OSHA, and EBSA remain funded at current levels. The bill also backs the President’s apprenticeship expansion goals and restores Job Corps oversight measures.
A July 29, 2025 memorandum clarifies that federally funded programs—regardless of “Diversity, Equity, and Inclusion” labels—must comply with federal antidiscrimination laws.
Caution Areas Include:
Race-based scholarships or internships excluding others
Hiring preferences based on protected characteristics or proxies
Facilities/resources restricted to specific demographics
Risk:
False Claims Act liability and potential loss of federal funding for violations.
The DOL proposes reinstating pre-2013 FLSA exemptions for third-party home healthcare providers. If finalized, agencies could again classify certain workers as exempt from minimum wage and overtime.
Status:
Public comments are due by September 2, 2025. Enforcement of the 2013 rule is currently suspended.
An August 7, 2025 Executive Order directs the SEC and DOL to expand access to alternative assets (private equity, real estate, crypto, etc.) in employer-sponsored retirement plans. Guidance and fiduciary safe harbors are pending.
Launched July 24, 2025, SALUTE offers proactive technical guidance to help employers comply with USERRA before disputes arise—particularly around reemployment rights and benefit protections.
PWFA Accommodations for Elective Abortion Struck
A Louisiana federal court invalidated EEOC rules requiring accommodations for elective abortions under the PWFA, citing statutory overreach.
MI Supreme Court: Employment Contract Limitations Require Reasonableness Review
Standardized, non-negotiable agreements shortening filing periods must undergo judicial review for fairness before enforcement.
MA High Court: Non-Solicitation with Forfeiture OK
Forfeiture clauses in non-solicitation agreements do not trigger the Massachusetts Noncompetition Agreement Act (MNAA).
CT: Remote Work Not Reasonable if It Removes Essential Duties
A CT appellate court held that full-time remote work is not a reasonable accommodation if in-person tasks are essential.
NY Federal Court Applies Loper Bright to ADA RTS Letters
The court ruled that early EEOC Right-to-Sue letters cannot override statutory waiting periods, signaling broader scrutiny of agency regulations post-Loper Bright.
CA AI Regulations Approved
New rules under the Fair Employment and Housing Act limit use of AI/ADS in employment decisions, require anti-bias testing, and mandate data retention for four years.
CA Minimum Wage Rising in 2026
Expected to increase to $16.90/hour. Exempt salary threshold will exceed $70,000/year.
CA Strengthens Tip Protections
SB 648 mandates full gratuity remittance, timely payment, and recordkeeping—with civil penalties and private actions effective January 2026.
CO Special Session to Revisit Sweeping AI Law
Governor Polis reconvenes lawmakers August 21, 2025, to reconsider SB 205, which could impose the nation’s strictest AI employment rules.
LA Extends Separation Notice Deadline
Employers now have 10 days (up from 3) to file electronic separation notices.
IL Creates Paid Military Funeral Honors Leave
Eligible employees receive up to 40 paid hours/year to participate in funeral honors details.
ME Enacts Shift-Change Compensation Law
Employers with ≥10 employees must pay up to 2 hours’ wages if a scheduled shift is canceled or shortened without adequate notice.
NE Paid Sick Leave Effective October 1, 2025
Nebraska’s Healthy Families & Workplaces Act begins accruing leave; employers must distribute required notices by September 15, 2025.
AK Considering Paid Sick Leave
Proposal under review would mandate PSL based on employer size, with optional front-loading.
RI Clarifies Sunday & Holiday Premium Pay Rules
New regulations define retail vs. non-retail employer obligations and premium pay stacking rules.
OSHA Penalty Reductions Expanded
Small employers may receive greater fine reductions based on size, safety history, and corrective actions.
Form I-9 Violation Definitions Updated
New HSI memo clarifies substantive vs. technical violations, elevating risk for late or incomplete forms.
E-Verify Revocation Reporting
Employers must use the Status Change Report to identify employees with revoked EADs and reverify work authorization accordingly.
TPS EAD Validity and Fees Revised
EADs now valid for up to one year with new fees and shortened auto-extension periods, requiring updated I-9 tracking.
IRS Drafts New W-2 Fields
Employers must prepare to report qualified tips and overtime compensation under the “Big Beautiful Bill.”
Maine’s Workplace Surveillance Law Pending
If not vetoed, the law will require advance written notice of electronic surveillance and limit tracking on personal devices.
Monitor pending legislation like the Save Local Business Act and AI laws in CA and CO.
Update policies on DEI, surveillance, paid leave, AI usage, and meal period waivers.
Prepare for new wage thresholds, IRS reporting, and TPS/E-Verify changes.
Train HR and management teams on new state-specific leave, wage, and notice requirements.