The start of a new year is always a great time to revisit your goals—both personal and professional. Maybe last year, you set out to finally tackle that reading list or master the art of keeping your plants alive.
Some goals can fall by the wayside. Others? Not so much.
When it comes to your workplace, staying ahead of employment law changes is not optional.
January 1, 2025, marks the start of significant employment law updates that every employer needs to know. From federal updates and state minimum wage hikes to new paid leave rules and other key developments, this guide will help you stay on track and start 2025 strong.
Federal Employment Law Updates for 2025
Federal changes set the foundation for employment laws across the country. In 2025, there are a few important updates you’ll want to know about:
IRS Mileage Reimbursement Rate
Beginning January 1, 2025, the IRS mileage reimbursement rate increases to 70 cents per mile, up from 67 cents in 2024.
This applies to all vehicle types, including electric and hybrid vehicles, and is widely accepted as the standard reimbursement rate for employees using personal vehicles for work-related travel.
EAD Automatic Extension Period
The Department of Homeland Security's final rule permanently extends the automatic renewal period for Employment Authorization Documents (EADs) to 540 days. This rule takes effect on January 13, 2025, and applies to certain renewal applications filed on or after May 4, 2022.
If you employ individuals on EADs, this change reduces the risk of work interruptions while renewals are processed.
Federal Contractor Minimum Wage
If you’re a federal contractor, be aware of the new minimum wage rates based on the applicable executive order:
- EO 13658: $13.30/hour ($9.30/hour for tipped workers).
- EO 14026: $17.75/hour for all workers.
If you’re in this category, make sure your payroll team is on top of these updates.
State Minimum Wage Changes for 2025
Minimum wages are rising in many states this year. State minimum wage laws often go above and beyond federal requirements, with some states implementing higher regional or city-specific rates.
These increases are designed to help workers keep up with the cost of living, but they also mean businesses need to adjust.
Alaska
- $11.91/hour for all workers.
Arizona
- $14.70/hour statewide.
- Flagstaff: $17.85/hour.
California
- $16.50/hour statewide, with higher rates in cities like Mountain View ($19.20/hour) and Sunnyvale ($19/hour).
Colorado
- $14.81/hour statewide; Denver: $18.81/hour.
Connecticut
- $16.35/hour statewide.
Delaware
- $15/hour statewide.
Illinois
- $15/hour ($9/hour for tipped workers).
Maine
- $14.65/hour statewide; Portland: $15.50/hour.
Michigan
- $10.56/hour on January 1, increasing to $12.48/hour on February 21.
Minnesota
- $11.13/hour statewide; Minneapolis and St. Paul: $15.97/hour.
Missouri
- $13.75/hour ($6.88/hour for tipped workers).
Montana
- $10.55/hour statewide.
Nebraska
- $13.50/hour statewide.
New Jersey
- $15.49/hour statewide; sector-specific rates include $18.49/hour for long-term care employees.
New York
- $16.50/hour in NYC, Suffolk, Nassau, and Westchester Counties; $15.50/hour elsewhere.
Ohio
- $10.70/hour ($5.35/hour for tipped workers).
Rhode Island
- $15/hour statewide.
South Dakota
- $11.50/hour ($5.75/hour for tipped workers).
Vermont
- $14.01/hour ($7.01/hour for tipped workers).
Virginia
- $12.41/hour statewide.
Paid Leave Updates by State
Paid leave policies continue to evolve, reflecting the growing demand for workplace flexibility and support for employees managing personal responsibilities. Several states are introducing or expanding leave programs to give workers more time for caregiving, health, or family events.
Oregon: Paid Leave Oregon (PLO): Expands to cover foster and adoption placements. Employers should amend policies to reflect this change.
Maine: Paid Family and Medical Leave (PFML): Payroll contributions begin January 1, 2025. Employees can take up to 12 weeks of leave starting May 2026.
Delaware: Payroll contributions for the Paid Leave program also begin January 1, 2025.
Rhode Island: Temporary Caregiver Insurance (TCI) benefits increase to 7 weeks per year.
Miscellaneous State Changes
Beyond wages and leave policies, states are implementing other important employment law changes. These updates range from new pay transparency rules to expanded protections for employees.
Illinois
- Job Postings: Employers with 15+ employees must disclose pay scales and benefits.
- EEO Policy Updates: Expanded to include reproductive health decisions and family responsibilities.
- Pay Stubs: Employers must provide detailed pay stubs, including hours worked, wages, and deductions.
New York
- Paid Prenatal Leave: Pregnant employees can take up to 20 hours of paid leave annually for healthcare services.
California
- Victim Protection Law Updates: Strengthens protections for victims and their family members.
- Paid Sick Leave: Expanded to include jury duty and victim-related leave.
- Driver’s License Requirements: Prohibited in most job postings unless essential to the job.
Minnesota
- Job Postings: Employers must include pay ranges and benefits in all job postings.
How to Prepare for 2025 Employment Law Changes
Employment law updates are more than just compliance requirements—they’re opportunities to improve your workplace policies and demonstrate your commitment to employees. Here’s how you can prepare:
- Audit Your Policies: Review your employee handbooks, payroll practices, and job postings to ensure alignment with new regulations.
- Train Your Team: Educate HR and management teams on updates to avoid compliance errors.
- Communicate Early: Share changes with employees well in advance to avoid confusion and highlight the benefits of these updates.
Proactive preparation not only protects your business but also reinforces a culture of fairness, transparency, and trust.
Leave Confusion and Missed Opportunities in the Past
The new employment laws might seem like a lot to take in, but they’re really about building better workplaces. Whether it’s fair pay, more flexibility, or better protections, these updates give businesses the chance to make a positive impact on their teams.
Take this opportunity to refresh your policies, strengthen employee communication, and set the tone for a successful year ahead.
One of the easiest ways to get tripped up by these updates is through your employee handbook. A poorly written or outdated handbook can lead to confusion, compliance issues, and even legal trouble.
Want to make sure your handbook
doesn’t hold you back?
Check out our guide on the 5 Mistakes to Avoid in Your Employee Handbook so your handbook is clear, compliant, and helpful for your team.
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