Every year brings new employment regulations that companies must navigate. Add a new administration and companies can expect more changes as the year evolves. While we do not know exactly what 2025 will bring, here are some predictions:

Federal Laws 

Republicans will control the White House and both houses of Congress, with a Supreme Court that tends to be more conservative-leaning. Many expect legislative and executive actions that will undo or reverse the direction taken under the Biden administration. Based on President-elect Donald Trump's platform during his campaign, many expect his administration to be pro-employer, reduce the tax burden of corporations and high net-worth individuals, crack down on immigration, and implement tariffs. 

Some expected impacts include: 

Minimum wage. During a recent interview, Trump said that he supports increasing the federal hourly minimum wage from $7.25 to $15.00, as long as it does not hurt small businesses. However, most Republicans and companies are not in favor of wage increases. 

With the Department of Labor (DOL) minimum salary threshold struck down by a Trump-appointed federal judge, initiatives that provide higher wages for lower-waged employees are not expected. 

Employee protections. While Biden's administration implemented and strengthened new protections for employees, Trump is likely to direct his administration to be more employer-friendly by either rolling back some protections or only pursuing enforcement for the most egregious situations. Additionally, diversity protections and requirements may be rolled back and enforcement of claims could be minimally pursued. 

Immigration. We can expect a crackdown on immigrants coming into the country and companies that rely on low-wage workers for labor may find a shortage of people to fill such positions. In white-collar jobs, reduced visa opportunities for employees and their families may make it harder for employers to entice foreign workers to join their firms. 

Some experts are also expecting that this will be one area where enforcement will increase, with more U.S. Immigration and Customs Enforcement (ICE) visits, Form I-9 audits, and perhaps additional E-Verify requirements. 

Labor relations. Trump is expected to replace the current, staunchly pro-union general counsel with a more employer-friendly counsel, as well as fill an open seat on the National Labor Relations Board (NLRB). While the NLRB will still consist of a Democratic majority, the general counsel sets the direction for the NLRB, so the board is expected to refocus on reducing the power of unions and protections for employees and is not likely to enforce the cases pursued in the past four years. 

Independent contractors. These rules have vacillated over the past three administrations. While the test for independent contractors often relies on an “economic realities" test, the standards for that test could change again. The current rule relies on the totality of the relationship based on six factors. It is expected that the new administration will go back to using two factors as it did in the past.  

Restrictive covenants. The Federal Trade Commission's (FTC) plan to ban most noncompete agreements in 2024 was overturned by a Trump-appointed federal judge. Since most employers want the protections of noncompete agreements and other restrictive covenants—such as non-solicitation and non-disparagement clauses—many do not expect this type of ban to be reintroduced.

State Laws 

In recent years, states have taken the lead on key policy initiatives. While this gridlock may ease, states will continue prioritizing measures that resonate with their constituents. The 2024 election-day ballot initiatives reflect this trend, with voters weighing in on several important issues. 

Minimum wage increases. Voters in Alaska passed a measure to increase the state minimum wage to $15 per hour by July 1, 2027. Additionally, the measure included a provision that if the federal minimum wage is increased, the state's minimum wage will automatically increase to $2 per hour more than that rate. 

Voters in Missouri voted to increase their minimum wage to $15 per hour by 2026. However, California voters did not pass a similar measure. Its minimum wage will continue to increase as previously established. As of Jan. 1, 2025, the minimum wage increased in 22 states. 

Paid sick leave. Three states passed new paid sick leave laws that will go into effect in 2025. Alaska employees will be able to accrue up to 40 or 56 hours each year, depending on the size of the employer, beginning July 1, 2025. Additionally, Missouri employees will be able to accrue up to 40 or 56 hours each year, depending on the size of the employer, beginning May 1, 2025. Nebraska employees will accrue up to 40 or 56 hours each year, depending on the size of the employer, beginning Oct. 1, 2025. 

Marijuana. While three states failed to pass marijuana legalization, Nebraska's legalization of medical marijuana is set for later in 2025.  

As federal and state laws evolve this year, most employers will need to manage other workplace challenges—including a continuing reduced labor pool due to factors such as immigration and generational shifts; increasing operational costs; employees under personal financial pressures which may require them to look for other opportunities; and workplace tensions as the country continues to experience division. 

Paige McAllister is vice president, HR compliance, The Workplace Advisors. The Workplace Advisors is the endorsed HR partner of Big “I" Hires, the Independent Insurance Agents of Virginia, Big I New York, and Big I New Jersey. 

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