Labor and Employment in 2025: Navigating an Uncertain Regulatory Landscape

A second Trump administration entered the White House this month, and many business leaders are anticipating major changes—and uncertainties—in labor and employment law.

Federal Regulatory Rollbacks: What Employers Can Expect

To start with the obvious: there will likely be efforts to weaken and refocus the federal government, including agencies like the Civil Division of the Department of Justice; the Department of Labor (DOL) and its Office of Federal Contract Compliance Programs (OFCCP), Wage and Hour Division; the Occupational Safety and Health Administration (OSHA); the Equal Employment Opportunity Commission (EEOC); the National Labor Relations Board (NLRB); and the Federal Trade Commission (FTC).

Some prominent Biden-era workplace regulations and initiatives—like the DOL’s rules around overtime pay and independent contractor status, the EEOC’s data collection efforts and broadening of diversity, equity, and inclusion (DEI) and environmental, social, and governance (ESG) initiatives, and the FTC’s prohibition of noncompete agreements—are expected to be overturned, refocused, or slowed down.

State and Local Governments: Leading the Charge on Workplace Protections

The above may take time given the timelines of leadership changes and continued potential for gridlock in Congress. In the interim, certain (i.e., “blue”) state and local governments will continue to pick up the slack, be it via new measures to increase the minimum wage, a raft of proposals to regulate pay transparency and artificial intelligence (AI), or legal challenges using state laws. In 2025, substantial action is expected to take place in the judiciary, putting the resources of state courts and employees to the test. The Plaintiffs Bar is also expected to continue vigorously pursuing litigation.

In particular, employers should be on the lookout for a spike in lawsuits related to reverse discrimination, anti-DEI, rights of American citizens for jobs (vis-à-vis alleged preference to hire foreign workers), and religious freedom.

Pay equity and transparency litigation, especially in states such as Washington, is expected to continue. On the immigration front, I-9 audits will increase, and the specter of dawn raids by Immigration & Customs Enforcement should sound the alarm for those in hospitality, construction, and other vulnerable sectors. Consequent efforts to get employees to disclose their immigration status on the spot also could lead to allegations of harassment and discrimination.

Proactive Strategies for Employers: Preparing for Risk and Laying the Compliance Foundation

Fortunately, employers can take steps now to prepare. Undertaking an internal review of employment eligibility (even for just a statistically valid sample of employees) is a good start.

Should the number of available H-1B visas be drastically reduced, conducting a labor cost analysis may be of great interest to the C-suite. The same goes for reviewing and implementing AI use policies and guidelines and conducting an independent audit of AI tools for potential bias. Meanwhile, those who care about DEI and ESG will (and should) continue to do so, albeit under different monikers.

The uncertainty for US employers is real. Staying ahead of potential risks and laying a strong compliance foundation is more important than ever.