With 2025 about to arrive, small businesses should take a moment to make sure they’re ready for some HR changes that are about to happen. While some of these changes have been known about for months, other changes involve new developments. Because penalties for violations can be significant, it’s important to prepare for these HR reforms as soon as possible.
5 Changing HR Laws To Prepare for in the New Year
From pay transparency laws to I-9 updates, there are a number of HR changes in the works. As a small business, prepare early for the following five HR developments that will happen during the upcoming year.
1. Sudden Reversal on Salaries for FLSA Exempt Workers
For HR professionals, one major surprise came in November when a federal court in Texas halted changes to the FLSA. The first stage of scheduled salary increases already occurred in July 2024, and the next stage of salary increases was supposed to take place at the start of 2025.
Because of the judge’s ruling, the FLSA salary increases will not happen. While this ruling could be appealed, it is unlikely that the rule will end up getting reinstated.
For workplaces, this sudden reversal presents a tricky dilemma. According to the previous FLSA changes, you should have already given executive, administrative, professional, and highly compensated employees a salary increase. The easiest option for employers is to keep the July changes and communicate to workers that future changes are no longer happening. Because many workers are already planning on the 2025 increase, it’s important to be transparent.
Some workplaces responded to the July FLSA rules by switching exempt workers to a nonexempt status. For these workers, it’s possible to change them back to overtime exempt. However, you must do this with consistency and transparency to avoid confusion and unintentional discrimination issues.
2. Pregnant Workers Fairness Act (PWFA)
While the Pregnant Workers Fairness Act (PWFA) went into effect on July 27, 2023, the Equal Employment Opportunity Commission (EEOC) didn’t issue its final ruling until April 15, 2024. If your organization hasn’t adopted PWFA-friendly policies yet, it’s time to start thinking about them.
Under the PWFA, you are required to offer accommodations for pregnancy-related conditions. These accommodations may include providing shift changes, allowing workers to come in late, letting them have additional bathroom breaks, and making similar adjustments.
It is not the worker’s responsibility to let you know if they need accommodations. As soon as you or one of your managers find out that the worker is pregnant, you should offer accommodations.
Additionally, you should not force workers to accept any accommodations they don’t want. This could be seen as discriminatory. Instead, the appropriate accommodations should be interactively agreed upon between your company and the employee. To avoid PWFA missteps, you should train managers about their PWFA obligations and add a section on the topic to your employee handbook.
3. Updated I-9 Forms
Small businesses need to be extra careful about updating their I-9 forms. The current forms say they don’t expire until July 31, 2026. However, there are new forms coming out that expire in May 2027. You must switch to the new form, even though the old form hasn’t technically expired yet.
There are only a few minor changes in the actual I-9 form, but the instructions have been shortened to just eight pages. However, your company must be using the updated form or you could potentially be fined.
To avoid potential I-9 fines, it’s important to conduct internal audits on a regular basis. Each individual mistake on a form can lead to a fine, so it pays to be cautious. On a recent Mission to Grow podcast on “HR Laws Changing: What Small Businesses Should Expect in 2025,” Mary Simmons, Asure’s vice president of HR consulting and compliance, discussed how to make I-9 corrections correctly.
“You make a note to the file about what you found, and you make those corrections. Don’t try and hide your corrections,” Simmons says, “Whiteout will be an automatic fine. You’re very evident about the changes that you make.”
In the coming months, internal I-9 audits will be an increasingly important penalty prevention tool. “We already have past information about our new administration. They did 6,500 I-9 audits a year on average. And the current administration did half that many,” Simmons says, “We have that information to go on so that we can make a very educated guess that I-9 audits are going to double.”
4. Adjustments to the Minimum Wage
While the federal minimum wage is still set at $7.25 per hour, many states and municipalities have minimum wages set higher than the federal minimum. Once 2025 arrives, many of these minimum wage standards will increase. As a small business owner, it’s important to stay on top of upcoming minimum wage changes so that you don’t end up inadvertently breaking wage and hour laws.
5. Paid Sick Leave
Similarly, some states are changing paid sick leave laws, so businesses in these states should be prepared. It’s also important to keep in mind that your company’s obligations will likely change as you grow. While some states mandate sick leave for every employer and employee, other states only require paid leave when an employer has a certain number of employees. If you’re approaching that threshold, it’s time to start preparing for your new obligations.
How You Can Prepare for Major HR Changes
Before 2025 arrives, there are a few important things you can do to prepare for upcoming HR changes.
- Learn About New Policies in Advance: By staying informed, you can learn which changes are about to happen. In turn, this gives you more time to get ready for them.
- Talk to an HR Company: At a professional HR firm, you can learn about upcoming changes and the best methods for navigating them. Instead of spending your organization’s time and money on these changes, you can outsource your HR compliance for an easier, more efficient experience.
- Prepare New Policies: Depending on the HR change, you may need to create a new policy for your employee handbook. A policy ensures standardization and consistency. As a result, it can prevent lawsuits and improve morale.
- Train Managers: Once you have a policy prepared, the next step is training your managers on it so that they are enforcing the latest HR laws. You may also need to create separate training sessions for HR staff and team members.
- Be Transparent: No matter what your HR policies are, you should clearly communicate them to your team members. Transparency prevents misunderstandings and ensures everyone is on the same page.
Get Your Business Ready for the New Year
By preparing for these major HR changes, you can make sure your company is ready for the new year. If you’re uncertain about how these changes will impact your company, Asure can help. Each state has different requirements to navigate, and federal employment laws are constantly being changed. To avoid penalties, lawsuits, and other employment issues, you need to work with someone who has a thorough understanding of HR laws and regulations.
To learn more about upcoming HR changes, reach out to our team of small business payroll and HR experts today.