By Nicholas Kowalczyk, Vice President, Chief Risk, Compliance, and Privacy Officer at Kelly
Falling out of compliance isn’t an option, but keeping up with constantly changing labor laws can feel Sisyphean for HR professionals. Regulations that stem from federal, state, and local levels—often with conflicting priorities—create real challenges for organizations who want to achieve and maintain compliance without disrupting operations.
Fortunately, there’s no reason for businesses to face these challenges alone, and expert guidance can make all the difference. Here are a few practical strategies for effectively monitoring, interpreting, and implementing regulatory changes to protect your organization from compliance risks.
Labor laws are foundational to employer-employee relationships. They influence everything from workplace safety and wages to discrimination protections and leave policies. But these regulations aren’t static; they evolve in response to economic conditions, political shifts, and emerging workplace challenges. In order to stay compliant, employers need to be aware of not only the letter of the law, but shifting enforcement priorities at the federal, state, and local level.
For a better sense of how these laws change over time, let’s take a look at how they have evolved over the last century. The Department of Labor itself was developed in 1913 to “foster, promote, and develop the welfare of working people, to improve their working conditions, and to enhance their opportunities for profitable employment.” Since then, a few landmark legislative milestones have shaped labor compliance.
In 1938, the Fair Labor Standards Act (FLSA) laid the foundation for fair minimum wage and overtime protections. Just over 30 years later, the Occupational Safety and Health Act (OSHA) established workplace safety standards. The Family and Medical Leave Act (FMLA) introduced job-protected leave in 1993, and recent laws such as pay transparency mandates and AI hiring regulations continue to expand compliance obligations.
Beyond statutory changes, enforcement priorities also shift under different political administrations. For example, the Trump administration has heightened scrutiny surrounding immigration compliance, while the Biden administration emphasized pay equity and workplace diversity initiatives.
These changes create uncertainty, so HR leaders need to proactively track not only updates to regulations but also shifts in how they are enforced. At Kelly, we provide subject matter expertise that can help your organization stay compliant in the face of highly nuanced regulatory changes.
Organizations face a complicated tapestry of overlapping labor laws, from the federal level down to local regulations. Federal laws establish baseline standards, but state and local governments often implement stricter requirements.
Take minimum wage, for instance. At the federal level, it remains $7.25 per hour, but many states and municipalities have established significantly higher rates. For multi-state businesses—made more common by the increase in remote or hybrid positions—these variations mean there is no one-size-fits-all solution to compliance.
The risks of noncompliance are substantial. Organizations may face statutory penalties, class action lawsuits, and reputational damage. If your company provides staffing or outsourcing services, the risks expand to include contract violations.
Clients expect rigorous compliance, and failure can lead to irreparable damage to business relationships. Companies with government contracts may even face debarment from future opportunities. Kelly’s approach to compliance alleviates these concerns. We assume key responsibilities for our employees, so it’s our job to make sure all legal obligations are met.
Regardless of what type of organization you have, to prevent minor violations from turning into major financial and operational hits, you’ll need to determine how federal, state, and local regulations apply to you, as well as any relevant industry standards. One way is to work with a dedicated team like ours that can help you develop a compliance plan while keeping an eye on pending and recently implemented bills.
On the heels of a presidential election and during a time of rapid technological advancement, 2025 is shaping up to be a significant year for state-level labor laws, particularly as blue states respond to changes at the federal level.
Shifts in the political landscape impact labor law enforcement. As we have transitioned to the Trump administration, we’re already seeing noticeable shifts in federal enforcement priorities that will shape compliance for years to come.
Let’s return to immigration regulations for a moment. It has become a major focus area, and increased enforcement is already underway. Employers should anticipate heightened scrutiny regarding I-9 documentation and employment verification processes, and review procedures now to make sure they can withstand this scrutiny.
Meanwhile, pay transparency is gaining momentum at the state level. Over a dozen states now have some form of salary transparency requirements. These laws generally require employers to disclose salary ranges in job postings, during interviews, or upon request. We expect this trend to continue, especially as blue states respond to federal policy shifts.
Paid sick leave requirements are also expanding, primarily through state and local legislation. Upwards of 20 states and dozens of municipalities have now implemented mandatory paid sick leave laws—another trend I expect will continue through 2025, particularly in states with progressive labor strategies.
As the new administration settles in, we’re also seeing the rollbacks of several Biden-era policies, including:
As with any administration change, updates to labor laws are unlikely to be uniform across the country. We’re witnessing tension between federal and state-level enforcement priorities. While federal agencies may pull back on certain enforcement activities, blue states are likely to intensify their regulatory oversight and even introduce new worker protections in response. Businesses, particularly those operating in multiple states, are therefore responsible for staying vigilant and tracking these developments as they arise.
Emerging technologies are also creating new compliance challenges. The rise of artificial intelligence in the workplace has prompted regulatory responses, especially as it pertains to hiring practices. Several have introduced bills to address AI-related discrimination, privacy concerns, and disclosure agreements. Since this technology is evolving so rapidly, this is an area to keep an eye on as legislation catches up.
To create an effective compliance monitoring system, you’ll need dedicated resources and deliberate, clear processes. Based on my experience leading compliance efforts at Kelly, here are some practical strategies to keep pace with changing labor laws.
Assign specific individuals or teams responsible for tracking regulatory developments. Depending on the size and needs of your organization, this could look like:
No matter what structure you land on, what’s important is having a centralized point of contact. Without clear ownership, critical updates could fall through the cracks.
Seek out the many free resources available that consolidate information about labor law updates. Some useful resources include:
These aggregators can help you identify trends and stay ahead of developments, even with limited resources. Just be sure to keep an eye out for reputable sources. If you’d like a more hands-on approach instead, Kelly offers expert consulting services, including insights and actionable strategies.
Create a structured process for moving from awareness to action:
Documented implementation processes improve compliance while creating valuable evidence of good-faith compliance efforts in the event of audits or investigations, but a clear workflow is also good for your day-to-day operations. It will help you make sure nothing falls through the cracks as you manage multiple regulatory changes simultaneously.
Audits may feel like an obligation, but they’re a useful tool for organizations to verify compliance and identify potential issues before they become damaging. To make the most of an audit:
In my experience, wage and hour compliance remains one of the most commonly overlooked areas. It’s worth noting that small, individual issues can quickly multiply across your workforce. For example, seemingly minor misclassifications of exempt versus non-exempt employees can result in substantial overtime liabilities when multiplied across dozens, or even hundreds, of workers.
Since COVID, remote work has become increasingly prevalent, as have all the complications that come with it. To maintain compliance:
Begin with comprehensively mapping your workforce so that you have a clear picture of which jurisdictions apply to your operations. From there, you can prioritize your compliance efforts accordingly. Since you’ll need the information for tax purposes regardless, it’s worth putting in the effort now for compliance planning.
Now and in the future, adaptability will be the key to regulatory compliance. The increasing divergence between federal and state-level policies will likely accelerate, creating both challenges and opportunities for forward-thinking organizations.
There’s no need to feel daunted. Just remember to be proactive. Businesses that establish solid monitoring systems, leverage expert guidance, and implement clear workflows will be best positioned for success. By following this blueprint, you can not only mitigate risk, but position your organization for success in an evolving regulatory environment.
The stakes are high, but the right strategies—and the right partners—can make compliance manageable. If you’re ready to see how Kelly’s expert guidance can help your business face pending regulatory shifts, reach out for a consultation today.