HR leaders didn’t get a breather in 2025.

Between sweeping federal legislation, major ACA reporting changes, shifting enforcement priorities, influential court rulings, and an explosion of state-level laws, compliance became more complex—and more fragmented—than ever. For employers, the risk wasn’t just missing a deadline. It was assuming the rules hadn’t changed when, in reality, they had.

This year-end HR compliance debrief breaks down the most impactful shifts from 2025 and what employers need to focus on before closing the books.

• Part 1: The 2025 HR Compliance Debrief: The Big Shifts Employers Can’t Ignore
• Part 2: ACA + 2025 Federal Updates: What Employers Must Do Now to Avoid Penalties
• Part 3: State Law Surge in 2025: Pay Transparency, Leave, Privacy, and the Patchwork Problem

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2025 Was a Compliance Turning Point for Employers

The defining theme of 2025 was change without consistency.

While federal agencies signaled deregulation in certain areas, states moved quickly to fill the gaps—introducing new wage rules, pay transparency requirements, leave laws, privacy protections, and non-compete restrictions. At the same time, employers faced meaningful federal updates tied to the Affordable Care Act (ACA), tax reporting, and agency enforcement.

The result: more rules, more variation, and less room for error.

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Federal Legislation: New Rules with Long-Term Impact

One of the most significant federal developments in 2025 was the passage of the One Big Beautiful Bill (OBBB), which introduced changes affecting tipped income and overtime taxation.

Key employer takeaways included:

• New tax deductions for tips and overtime premiums, subject to income caps and reporting requirements
• Clarification that tips must be “customarily and regularly” received and are distinct from service charges
• Advance planning requirements for job codes, payroll systems, and W-2 reporting beginning in 2026

While 2025 reporting remained unchanged, employers were expected to use 2025 as a transition and planning year, not a wait-and-see period.

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ACA Compliance: Less Relief, More Accountability

ACA compliance tightened significantly in 2025.

Employers saw:

• Higher penalties for affordability and failure-to-offer violations heading into 2026
• Adjustments to the affordability percentage, impacting plan design decisions
• The elimination of “good faith” and transition relief under new reporting laws

At the same time, the Paperwork Burden Reduction Act and Employer Reporting Improvement Act changed how Forms 1095 are distributed—removing mandatory distribution in some cases but increasing documentation and notice requirements.

The message from regulators was clear: flexibility in distribution does not mean flexibility in accuracy.

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Federal Agencies Shift Direction—but Enforcement Still Matters

2025 brought noticeable changes across federal agencies, including the DOL, EEOC, NLRB, and ICE.

Highlights included:

• Increased ICE workplace inspections, putting I-9 compliance back in the spotlight
• A deregulatory agenda at the DOL paired with renewed reliance on opinion letters
• Shifting EEOC enforcement priorities and upcoming PWFA-related changes
• NLRB reversals on prior guidance related to non-competes, severance agreements, AI, and captive audience meetings

Even where enforcement narrowed, employers were cautioned not to assume reduced risk—especially as states stepped in to regulate aggressively.

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Courts Continued to Shape HR Best Practices

Courts played a growing role in defining employer obligations in 2025.

Several high-profile cases influenced how employers approach:

• Discrimination and disparate impact claims
• Wage and hour interpretation
• Religious accommodations and exemptions
• Public-sector and healthcare employment practices

For HR teams, court decisions reinforced the need to review policies, not just laws, and to avoid relying on outdated interpretations.

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The State Law Surge: Compliance Became Local

Perhaps the most challenging shift of 2025 was the rapid expansion of state and local employment laws.

Dozens of new laws took effect mid-year, including:

• New minimum wage and exempt salary thresholds
• Pay transparency requirements
• Expanded paid sick and family leave laws
• Privacy and biometric data protections
• Non-compete bans and restrictions

With federal deregulation placing more authority in the hands of states, employers—especially those operating in multiple jurisdictions—faced a growing patchwork of obligations.

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What Employers Should Focus on Before Year-End

As 2025 comes to a close, the most effective employers are prioritizing:

• ACA reporting readiness and penalty exposure
• Wage and hour audits at both the federal and state level
• I-9 and personnel file audits, especially for electronic compliance
• Pay transparency alignment, even where not yet required
• Monitoring courts and state legislatures—not just federal agencies

Compliance in 2025 wasn’t about reacting faster. It was about planning smarter.

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Final Thought: 2025 Set the Tone for the Future of HR Compliance

The biggest lesson from 2025 is simple: compliance is no longer centralized, predictable, or static.

Employers who succeed will be the ones who treat compliance as an ongoing strategy—not a year-end task—and who partner with experts that can translate constant change into clear, actionable guidance.

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Want a practical way to close out 2025?

Download MP’s 2025 HR Compliance Year-End Checklist or schedule a brief compliance review to identify risk areas before they become costly.

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