2025 Year In Review Compliance Advisory
- By Harri Insider Team | December 30, 2025
Disclaimer: Please note this advisory is intended for summary purposes only. Any guidance or materials provided do not constitute legal advice and cannot be substituted for the advice of legal counsel. If you have any questions about how these updates impact your business, you should contact counsel.
FEDERAL UPDATES
IRS Reporting: Penalty Relief for “No Tax on Tips” and “No Tax on Overtime”
On July 4, 2025, President Trump signed the “One Big Beautiful Bill Act” (OBBBA) into law. This legislation establishes two significant, temporary federal income tax deductions designed to provide relief for workers in the service and industrial sectors. While popularly referred to as the “No Tax on Tips” and “No Tax on Overtime,” these provisions function as “above the line” deductions that reduce a taxpayer’s federal taxable income but do not eliminate Social Security, Medicare, or state tax obligations.
Recognizing that the OBBA was enacted mid-year, the Internal Revenue Service (IRS) announced penalty relief for the 2025 tax year concerning “No Tax on Tips” and “No Tax on Overtime” reporting. This relief aims to assist employers in transitioning to new reporting standards without facing immediate punitive measures for inadvertent errors during the implementation phase.
Legislation/Ruling: IRS Guidance for Tax Year 2025
Effective Date: Tax Year 2025
Key Requirements:
Provides penalty relief for specific reporting errors related to tip and overtime taxation.
Employers must still make good-faith efforts to comply with reporting obligations.
DOL Field Assistance Bulletin: Suspension of Liquidated Damages in Pre-Litigation Investigations
The Department of Labor’s (DOL) Wage and Hour Division (WHD) issued a Field Assistance Bulletin aiming to foster early resolution of wage disputes. The bulletin instructs WHD staff to refrain from seeking or collecting liquidated damages (double damages) during pre-litigation administrative investigations or settlements, encouraging employers to cooperate and correct issues without the immediate threat of liquidated damages.
Legislation/Ruling: Field Assistance Bulletin No. 2025-X (June 27, 2025)
Effective Date: June 27, 2025
Key Requirements:
WHD will not pursue liquidated damages in pre-litigation administrative settlements.
The focus shifts to recovering back wages and providing compliance assistance
Employers can leverage Harri’s compliance logs and document storage features to maintain thorough records of wage payments and hours worked, facilitating smoother cooperation with any potential administrative audits.
STATE REGULATORY CHANGES
CALIFORNIA
Statutory Update: 2026 Minimum Wage & Exempt Salary Threshold Increases
California continues its scheduled adjustments to the minimum wage and exempt salary thresholds. These increases affect both the general state minimum wage and specific industry sectors, requiring employers to adjust payroll and budget forecasts accordingly for the upcoming year.
Legislation/Ruling: Annual Statutory Adjustment
Effective Date: January 1, 2026
Key Requirements:
Increases the state minimum wage (amount to be confirmed by final CPI).
Adjusts the minimum salary threshold for exempt executive, administrative, and professional employees to reflect the new state minimum wage.
Clients can utilize TeamLive’s wage management settings to schedule automatic wage updates for affected employees, ensuring payroll accuracy upon the effective date.
Workplace “Know Your Rights Act” Notice Requirements
California enacted the “Know Your Rights Act,” mandating specific updates to workplace postings. Employers must display updated posters that clearly outline employee rights under state law, including recent changes to leave and discrimination protections.
Legislation/Ruling: Know Your Rights Act
Effective Date: February 1, 2026
Key Requirements:
Post updated “Know Your Rights” notices in conspicuous workplace locations.
Ensure notices are accessible to the workforce, potentially including digital distribution for remote workers.
Employers may use Harri’s CommsHub or Document Management tools to distribute new notices to employees and track digital receipt acknowledgements.
FEHA Amendments: AI & Automated Decision Systems Regulations
The California Office of Administrative Law has approved new regulations from the Civil Rights Council regarding Artificial Intelligence (AI) and Automated Decision Systems (ADS). The regulations define ADS broadly to include any computational process, including those using AI or machine learning, that makes or facilitates employment decisions. This includes tools used for resume screening, targeted job advertisements, and analyzing facial expressions or word choice in interviews.
Legislation/Ruling: FEHA Amendments (Title 2, CA Code of Regs)
Effective Date: October 1, 2025
Key Requirements:
Prohibits discriminatory use of AI/ADS in employment decisions.
Mandates preservation of personnel records, applications, and ADS data for four years.
Clients using Harri’s Talent Acquisition suite can leverage system features designed to support non-discriminatory hiring practices and to centralize data retention to meet the four-year record-keeping mandate.
Supreme Court Ruling: Good Faith Defense in Wage Claims
The California Supreme Court ruled that employers must demonstrate “active steps” to comply with legal obligations to establish a “good faith” defense against liquidated damages in minimum wage violations. Ignorance of the law is no longer a sufficient defense; employers must prove proactive compliance efforts.
Legislation/Ruling: Laurance Iloff v. Cynthia LaPaille et al.
Effective Date: Immediately
Key Requirements:
Employers must document the proactive measures they have taken to understand and comply with wage laws.
Failure to prove “active steps” may result in automatic liquidated damages in wage claims.
Equal Pay Act Reforms (SB 642): Expanded Definitions and Transparency
Senate Bill 642 expands the California Equal Pay Act to promote greater transparency and equity. The amendment broadens the definition of “wages,” extends the statute of limitations for violations, and adds protections for nonbinary employees. It also tightens requirements for pay scales in job postings to prevent vague or speculative ranges.
Legislation/Ruling: SB 642
Effective Date: January 1, 2026
Key Requirements:
“Wages” definition expanded to include benefits and non-salary compensation.
Pay scale in job postings must be definitive, preventing employers from undercutting transparency with speculative ranges.
Adds protections for nonbinary employees.
Employers may use Harri’s Talent Acquisition platform to configure compliant job postings that include precise pay scales and comprehensive benefit descriptions.
Pay Data Reporting & Mandatory Penalties (SB 464)
Senate Bill 464 significantly expands pay data reporting requirements. Employers with 100 or more employees must now report data for 23 job categories (up from 10). The law also imposes mandatory civil penalties for non-compliance upon request by the Civil Rights Department (CRD).
Legislation/Ruling: SB 464
Effective Date: January 1, 2027
Key Requirements:
Report pay data across 23 specified job categories.
Mandatory civil penalties for failure to submit required reports.
COLORADO
Wage Claim Act Amendment (HB 25-1001): Increased Deduction Limits
House Bill 25-1001 amends the Colorado Wage Claim Act regarding deductions. The law increases the threshold for permissible minimum wage deductions, stating that the limit must be calculated based on the applicable state or local minimum wage rather than the federal minimum wage.
Legislation/Ruling: HB 25-1001
Effective Date: 2025
Key Requirements:
Deductions must ensure the employee continues to receive the applicable state or local minimum wage.
Privacy Act Expansion & Biometric Data Regulations
The Colorado Privacy Act has been expanded to include stringent requirements for biometric data. Any employer collecting biometric identifiers (such as for time clocks or security) must now meet specific notice and consent obligations defined by the Department of Law.
Legislation/Ruling: Colorado Privacy Act / Department of Law Final Rule
Effective Date: 2025
Key Requirements:
Provide clear notice and obtain consent before collecting biometric data.
Implement data retention and destruction protocols.
Clients using biometric time clocks with TeamLive can leverage the platform’s consent workflows to present biometric privacy notices to employees and capture necessary consent during onboarding or clock-in.
ILLINOIS
Pay Transparency Act: Mandated Pay Scale Disclosures
Illinois joins the growing list of states mandating pay transparency in job postings. Employers must disclose pay scales and benefits in job advertisements to promote equity in the hiring process.
Legislation/Ruling: Pay Transparency Act
Effective Date: January 1, 2025
Key Requirements:
Include pay scale and benefits in all job postings.
One Day Rest in Seven Act (SB 3180): Retaliation Prohibited
Senate Bill 3180 amends the One Day of Rest in Seven Act (ODRISA) to explicitly prohibit retaliation against employees who exercise their rights to a 24-hour rest period. Violations now carry civil penalties.
Legislation/Ruling: SB 3180
Effective Date: March 21, 2025
Key Requirements:
Prohibits adverse action against employees requesting their mandated day of rest.
Civil penalties apply for retaliation.
Employers may utilize TeamLive’s “Day of Rest” settings to alert managers when an employee has not been scheduled for a 24-hour rest period, ensuring operational compliance and mitigating risk of retaliation claims.
INDIANA
HB 1125: Earned Wage Access Act
House Bill 1125 establishes the Indiana Earned Wage Access Act. This law regulates providers of earned wage access (EWA) services and clarifies that these transactions are not loans, provided they meet specific criteria.
Legislation/Ruling: HB 1125
Effective Date: 2025
Key Requirements:
Sets compliance standards for EWA providers.
Allows consumers to access earned but unpaid wages before scheduled pay dates.
MASSACHUSETTS
“An Act Relative to Salary Range Transparency”: Pay Range Disclosures
Massachusetts enacted “An Act Relative to Salary Range Transparency,” requiring employers with 25 or more employees to disclose pay ranges in job postings and when offering promotions to current employees.
Legislation/Ruling: An Act Relative to Salary Range Transparency
Effective Date: October 29, 2025
Key Requirements:
Disclose pay ranges in all external job postings.
Provide pay range information to employees offered a promotion or transfer.
MICHIGAN
Child Labor Law Revised (H.B. 5594): New Registration System
House Bill 5594 overhauls Michigan’s youth employment system. The responsibility for issuing work permits will shift from schools to the Department of Labor and Economic Opportunity (DLEO), which will create a centralized registration system for minors and employers.
Legislation/Ruling: H.B. 5594
Effective Date: October 2, 2026
Key Requirements:
DLEO to establish a registration database for minors and employers.
Eliminates school-issued work permits in favor of the state system.
MINNESOTA
Pay Transparency Law: Salary Range Disclosures
Minnesota now requires employers to include pay ranges in job postings. This move aligns with the state’s broader efforts to close wage gaps.
Legislation/Ruling: Pay Transparency Law
Effective Date: January 1, 2025
Key Requirements:
Include minimum and maximum salary/hourly pay in job postings.
MINNESOTA SF 17: Paid Meal and Rest Break Requirements
SF 17 mandates paid rest breaks for employees. Employers must provide a paid rest break of at least 15 minutes for every four hours of work, or enough time to use the restroom, whichever is longer. Additionally, employees who work six or more consecutive hours are entitled to a paid 30-minute meal break. Employees who are not provided their entitled breaks are entitled to liquidated damages.
Legislation/Ruling: SF 17
Effective Date: 2025
Key Requirements:
Paid 15-minute rest break every 4 hours.
Paid 30-minute meal break for shifts of 6+ hours.
Employers can use TeamLive’s break settings to configure automated rules for paid rest and meal breaks, ensuring schedules and timecards reflect these new mandates.
MONTANA
H.B. 226: Mandatory E-Verify/I-9 Employment Verification
Montana House Bill 226 mandates that most private employers use E-Verify or collect Form I-9 to verify employment eligibility. The law provides a safe harbor from penalties for employers who rely on E-Verify results.
Legislation/Ruling: H.B. 226
Effective Date: July 1, 2025
Key Requirements:
Use E-Verify or Form I-9 for verification.
Penalties of $500–$2,500 per violation for non-compliance.
Clients can leverage Harri’s integrated I-9 and E-Verify tools during the onboarding process to seamlessly verify employment eligibility and store required documentation.
NEVADA
AB 215: Expanded Child Labor Protections and Hour Reductions
Assembly Bill 215 amends Nevada’s child labor laws, reducing the maximum work hours for minors under 16 and adding night work restrictions for high school students aged 16–19.
Legislation/Ruling: AB 215
Effective Date: October 1, 2025
Key Requirements:
Weekly hour cap for minors under 16 reduced from 48 to 40 hours.
Prohibits work between 11:00 PM and 6:00 AM on school nights for unemancipated minors (16-19) enrolled in high school.
Employers may use TeamLive’s Minor Rules settings to configure age-specific scheduling constraints to prevent violations of the new hour caps and curfew restrictions.
NEW HAMPSHIRE
Lactation Accommodation: Reasonable Unpaid Breaks
New legislation requires employers with six or more employees to provide reasonable unpaid breaks for nursing employees. Employers must also make reasonable efforts to provide a private space other than a bathroom.
Legislation/Ruling: Lactation Accommodation Law
Effective Date: July 1, 2025
Key Requirements:
Reasonable unpaid break time for expressing milk (approx. 30 mins per 3 hours).
Provide a private, non-bathroom space.
NEW JERSEY
Pay Transparency Law: Mandated Salary Range Disclosures
New Jersey enacted legislation requiring employers to disclose salary ranges in job postings, further expanding the transparency trend in the Northeast.
Legislation/Ruling: Pay Transparency Law
Effective Date: June 1, 2025
Key Requirements:
Include salary ranges in all job listings.
NEW YORK
Significant Reforms to Frequency-of-Pay Damages
New York amended the Labor Law to scale back liquidated damages available to employees for “Frequency-of-Pay” violations. The reform addresses the surge in litigation following court rulings that allowed “manual workers” (often including restaurant and retail staff) to seek 100% liquidated damages even when they received their full pay on a biweekly basis rather than the required weekly schedule.
Legislation/Ruling: New York Labor Law § 198(1-a)
Effective Date: May 9, 2025
Key Requirements:
For a first-time violation, if an employer pays wages on a regular payday at least semi-monthly, recovery is limited to 100% of the lost interest rather than 100% of the late-paid wages.
Employers subject to a previous final order for the same violation remain liable for liquidated damages equal to 100% of the late wages.
Scheduled Minimum Wage and Tip Credit Adjustments
New York’s minimum wage and corresponding tip credits for the hospitality industry will increase annually through 2026, followed by future adjustments tied to the Consumer Price Index (CPI).
Legislation/Ruling: New York State Minimum Wage Act
Effective Date: January 1, 2025, and January 1, 2026
Key Requirements:
Standard Minimum Wage (2026): Increases to $17.00 for New York City and surrounding counties, and $16.00 for the rest of the state.
Tipped Food Service Workers (2026):
Downstate: $11.35 cash wage/$5.65 tip credit.
Upstate: $10.70 cash wage/$5.30 tip credit.
Exempt Salary Threshold Increases (NYC vs. Rest of State)
New York continues its tiered increase of exempt salary thresholds, with distinct rates for New York City, Long Island, and Westchester compared to the rest of the state.
Legislation/Ruling: Labor Law Section 652
Effective Date: January 1, 2026
Key Requirements:
Increases minimum salary for exempt administrative and executive employees.
Child Labor Law Violations (SB S3006C): Increased Penalties & New Database
Senate Bill S3006C significantly increases civil penalties for child labor violations and mandates the creation of a digital database for minor employment.
Legislation/Ruling: SB S3006C
Effective Date: 2025
Key Requirements:
First violation penalty increases to up to $10,000 (previously $1,000).
Employers and minors must register in a new state database.
Minors can apply for working papers electronically.
NORTH DAKOTA
SB 2047: Prohibition on Tax Withholding Without Consent
Senate Bill 2047 protects employees from unauthorized tax withholdings. Employers are prohibited from withholding or deducting income taxes from wages without the employee’s explicit consent.
Legislation/Ruling: SB 2047
Effective Date: 2025
Key Requirements:
Prohibits income tax withholding without employee consent.
OHIO
Pay Stub Protection Act: New Written/Electronic Access Requirements
The Pay Stub Protection Act establishes strict requirements for the provision of pay stubs. Employers must provide written or electronic access to pay stubs containing specific information.
Legislation/Ruling: Pay Stub Protection Act
Effective Date: April 9, 2025
Key Requirements:
Provide pay stubs (written or electronic).
Employers have ten days to comply with a written request for missing statements before violations can be reported.
CLEVELAND & COLUMBUS Local Pay Transparency Ordinances
Both Cleveland and Columbus have enacted local ordinances requiring pay transparency.
Legislation/Ruling: Cleveland Ordinance No. 104-2025 / Columbus Ordinance
Effective Date: Cleveland: Oct 27, 2025 | Columbus: Dec 3, 2025
Key Requirements:
Include pay scale/salary range in job postings for positions within city limits.
OREGON
SB 906: Requirement for Explanation of Wages at Hire
Senate Bill 906 requires transparency regarding potential earnings and deductions at the time of hire.
Legislation/Ruling: SB 906
Effective Date: January 1, 2026
Key Requirements:
Provide written explanation of wage statements, pay rates, and deduction codes to employees upon hire.
Clients can update their digital onboarding packets in Harri to include the required wage statement explanations, ensuring every new hire receives and acknowledges the information.
RHODE ISLAND
HB 5679 / SB 70: Written Notice of Employment Conditions
New legislation requires employers to provide specific written notices regarding conditions of employment to all new hires.
Legislation/Ruling: HB 5679 / SB 70
Effective Date: 2025
Key Requirements:
Provide written notice of specific employment conditions upon hire.
VERMONT
Pay Transparency Law: Mandated Compensation Range Disclosures
Vermont enacted a pay transparency law requiring employers to disclose compensation ranges in job advertisements.
Legislation/Ruling: Pay Transparency Law
Effective Date: June 1, 2025
Key Requirements:
Include compensation ranges in job postings.
WASHINGTON
2026 Minimum Wage & Exempt Salary Thresholds (Annual Adjustment)
Washington State continues to adjust its minimum wage and exempt salary thresholds based on CPI data.
Legislation/Ruling: Annual Adjustment (RCW 49.46)
Effective Date: January 1, 2026
Key Requirements:
Increases state minimum wage and corresponding exempt salary thresholds
Pay Transparency: Litigation Risk & Cure Periods
Recent developments have altered the landscape of the Equal Pay and Opportunities Act (EPOA). A “cure period” has been established, allowing employers a temporary safe harbor to correct non-compliant postings without penalty.
Legislation/Ruling: SB 5408 / Branson v. Washington Fine Wine & Spirits
Effective Date: July 27, 2025 (Cure Period)
Key Requirements:
Safe harbor: Employers have five business days to correct non-compliant postings after receiving notice.
“Job applicant” definition broadened by Supreme Court ruling.
HB 1308: Enhanced Rights to Personnel Records
House Bill 1308 expands the definition of “personnel file” and mandates strict timelines for employer responses to inspection requests.
Legislation/Ruling: HB 1308
Effective Date: July 27, 2025
Key Requirements:
“Personnel file” now includes application records, evaluations, disciplinary records, leave records, and payroll records.
Employers must respond to requests within 21 days.
S.B. 5217: Pregnancy Accommodations & Lactation Break Pay
Senate Bill 5217 updates pregnancy accommodation laws to explicitly include lactation. Employers must now pay employees for break time used to express milk.
Legislation/Ruling: S.B. 5217
Effective Date: January 1, 2027
Key Requirements:
“Pregnancy” includes the need to express milk.
Employers must pay for break and travel time to express milk (in addition to meal/rest periods).
Employers can leverage TeamLive’s paid break settings to ensure lactation breaks are compensated correctly in accordance with the new law.
(TUKWILA) Minimum Wage Consolidation & Rate Increase As of July 1, 2025, the distinction between Large and Mid-Size employers in Tukwila has been eliminated. The minimum wage for Mid-Size employers increased to match the Large Employer rate, creating a single city-wide minimum wage.
Legislation/Ruling: Tukwila Municipal Code Chapter 5.63
Effective Date: July 1, 2025
Key Requirements:
Mid-Size employer minimum wage increased to $21.10 (matching Large Employers).
A single minimum wage rate applies to all covered employers going forward.
The unified minimum wage rate will increase to $21.65 per hour effective January 1, 2026.
Harri, your partner in compliance. As employment regulations continue to evolve, Harri stands by your side, ready to help you manage these changes. Recognized for our expertise in employer technology solutions, we focus on equipping you with the tools and insights you need to support your compliance efforts. Choose Harri as your partner in compliance.
