HR Insights
Deep Dive
December 30, 2024

2024 U.S. HCM compliance trends: AI continues to prompt discussion and action

In 2024, learn how U.S. organizations took on new compliance complications in the form of AI, overtime rules, wage transparency, and more.  

Share

In looking back on 2024, many of the predicted trends we discussed in last year’s Taylor Swift-themed article continued to keep employers up at night, including minimum wage, overtime rules, and paid leave. 

Perhaps the most prevalent of these, and the one that continued to dominate the news, social media, and broader discussions, was artificial intelligence (AI). (Well, Taylor Swift also continued her global dominance). AI’s ubiquity was also true in the HCM space.  

In fact, AI may even be influencing this blog, and not just from a topical perspective. It’s entirely possible this entire article has been AI-generated – or it could have been written by a human being with a fast-approaching content deadline. As long as the details add up, maybe the difference doesn’t matter. After all, if I, the author, claimed to be human, could you be certain it’s a truthful statement, or could I simply be a very acquiescent generative AI tool telling you what you want to hear? By the way, that sweater looks great on you! 

Oh, but where were we? Right, a look back at the key compliance developments over the past year, plus a little sneak peek into the future.  

Well, year-end is approaching, so let’s get started – I’m JessBot, and I’m here to answer your questions about HCM compliance trends in the United States!  

“Hey, JessBot: I’m interested in AI, but I’m also a little scared of it. Can you give me some tips?” 

2024 was a year in which we saw a lot of activity around regulating AI. On a global scale, the European Union’s AI Act, which is often touted as the world’s first comprehensive AI law, entered into force. The EU AI Act’s provisions have various effective dates, and in general, the law applies to AI used in the EU, EU deployers, and AI output used in the EU.  

The Act, which may serve as a model for other AI laws around the world, uses a tiered, risk-based legal framework to classify AI systems. Basically, the higher a tool’s risk, the stricter the rules governing it. Generally, workplace AI tools will be considered “high-risk,” and there are obligations for high-risk AI systems, high-risk AI systems providers, and high-risk AI systems deployers.  

We also saw AI legislative activity closer to home as well. Although there may be a difference of opinion on the exact number of AI-related bills that were introduced across the United States in 2024, it’s clear there were a lot of them. Although many of these bills didn’t pass, or weren’t directly related to the workplace, some significant legislation did make it through the process.  

Utah’s Artificial Intelligence Policy Act (AI Policy Act) became effective May 1, 2024, and is one of the first state laws on AI in the U.S. aimed at the private sector. The law has general generative AI (GenAI) use disclosure requirements that are applicable to businesses using GenAI to interact with customers. More specifically, a person who uses, prompts, or otherwise causes GenAI to interact with a person in connection with any act administered and enforced by Utah’s Division of Consumer Protection, must clearly and conspicuously disclose to the person with whom the GenAI interacts, if asked or prompted by the person, that the person is interacting with GenAI and not a human. There are more strenuous requirements for certain regulated occupations. 

Not to be outdone by Utah, Colorado’s Artificial Intelligence (AI) Act, effective February 1, 2026, is the country’s first comprehensive AI law that has sweeping requirements for both AI developers and deployers (e.g., employers and businesses), including requiring them to protect consumers (i.e., Colorado residents) from algorithmic discrimination. The law is designed to target the development and use of “high-risk AI systems,” particularly the use of such systems to make “consequential decisions” (e.g., hiring and firing in the employment context). 

Employers that meet the definition of a deployer under the law will have extensive requirements, including, for example, ones related to:  
 

  • Risk management policies and programs; 

  • Impact assessments; 

  • Consumer notice and disclosure requirements; 

  • Website disclosures; and 

  • Discovery of algorithmic discrimination. 

Although most of the Colorado law is designed to address high-risk AI systems, it also requires disclosures to consumers when any AI system is used. More specifically, a deployer or other developer that deploys, offers, sells, leases, licenses, gives, or otherwise makes available an AI system that is intended to interact with consumers must ensure it discloses to each consumer who interacts with the AI system that the consumer is interacting with an AI system. 

Another state took a slightly different approach and, effective January 1, 2026, Illinois will add provisions to the Illinois Human Rights Act designed to protect employees from discrimination resulting from the use of AI in the workplace. The law also requires employers to be transparent about their use of AI for employment-related decisions. More specifically, “with respect to recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or the terms, privileges, or conditions of employment,” an employer cannot use:  
 

  • AI that has the effect of subjecting employees to discrimination on the basis of protected classes; or  

  • Zip codes as a proxy for protected classes. 

Employers are also required to provide notice to employees that they are using AI for recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure, or the terms, privileges, or conditions of employment. 

This won’t be a surprise, but a lot of AI activity is expected again in 2025, even in states that were less aggressive in 2024. For example, Connecticut and Texas both appear poised to pursue AI legislation in 2025.  

“JessBot: What is the minimum wage I have to pay my workforce?”  

Unfortunately, inflation was still a lingering problem in 2024, and it was often a factor behind minimum wage rate increases in many states and locales. There were numerous increases and cost-of-living adjustments in July, and more are coming in January 2025. Several states and quite a few localities now have minimum wages set at $15 or more!  

Many U.S. jurisdictions with increases effective January 1 have established schedules for raising minimum wage rates in order to reach a certain amount by a set date. For example, states with gradual increases effective at the beginning of 2025 include Delaware, Missouri, Nebraska, and Rhode Island. 

Minimum wage also entered the chat in the November election. For example, voters in Missouri and Alaska approved minimum wage increases via ballot measures.  

“JessBot: I’m confused about the DOL’s final overtime rule – what happened?” 

New overtime final rule, we hardly knew you!  

There was also plenty of drama this year surrounding the U.S. Department of Labor’s (DOL’s) final rule to update and revise regulations issued under the Fair Labor Standards Act (FLSA). The final rule, which partially took effect on July 1, 2024, amended the regulations that implement the exemption from minimum wage and overtime pay requirements for executive, administrative, and professional (EAP) employees. Some of the most significant changes included: 
 

  • Raising the standard salary level, effective July 1, 2024, to $844 per week ($43,888 per year) from the prior $684 per week ($35,568 per year);  

  • Further increasing the standard salary level, effective January 1, 2025, to $1,128 per week ($58,656 per year).  

  • Increasing the highly compensated employee total annual compensation threshold on July 1, 2024, and on January 1, 2025; and 

  • Providing for “future updates of these levels every three years to reflect current earnings data.” 

But that wasn’t the end of the story. On November 15, 2024, a federal district court in Texas struck down the DOL final rule, vacating the rule nationwide. The court’s ruling not only blocks future increases, but it also vacates the increase that went into effect July 1, 2024, setting the threshold back to the prior $35,568 amount. The US DOL has appealed the ruling, but it is unclear how the new incoming administration will handle the matter.  

“JessBot: I'm trying to increase wage transparency. Can you help me?" 

The pay transparency law trend continued to flourish in 2024, with even more jurisdictions targeting wage inequality by requiring pay information in job postings. 

Several new states enacted laws with salary disclosure requirements. Effective June 30, 2024, the District of Columbia amended its Wage Transparency Act of 2014 to add new disclosure provisions. The amendments included provisions requiring employers to include minimum and maximum salary or hourly pay information for all job advertisements or job postings and to disclose the existence of healthcare benefits before the first interview. Effective October 1, 2024, covered employers in Maryland must disclose, in each public or internal posting for a position, the wage range and a general description of benefits and any other compensation offered for the position.  

Additionally, several other states have passed pay transparency laws that will become effective in 2025, including Illinois, Minnesota, Vermont, Massachusetts, and New Jersey

Since it appears that this trend is not slowing down, employers may wish to begin gathering and providing this information regardless of jurisdiction, since it may simplify further compliance with new laws as they arise. 

“JessBot: Were there any other new trends in 2024 related to recruiting and hiring?” 

In addition to many jurisdictions passing laws related to pay transparency, the trickle of ban-the-box laws slowed, but didn’t end entirely. For example, Los Angeles County, California, established a very extensive Fair Chance Ordinance, and Lehigh County, Pennsylvania, enacted a Human Relations Ordinance addressing various hiring practices.  

Hiring in 2025 will also bring a few additional administrative requirements, such as increased notice requirements for Illinois employers using E-Verify and expanded new hire reporting data requirements in Indiana. It seems somewhat unlikely that federal pay data reporting will resurface any time soon, but more states may consider their own versions, joining California, Illinois, and now Massachusetts

“JessBot: Were there developments on paid leave in 2024?” 

I’m fairly sure a personable AI might actually chuckle at this question because unsurprisingly, there was a lot of activity around paid leave this year.  

Action started early in 2024 with a few localities (e.g., Cook County, Illinois, Saint Paul, Minnesota, and San Diego, California) providing paid sick leave updates by adopting amendments and new guidance at the beginning of the year.  

A few other jurisdictions updated leave laws, with Minnesota adopting earned sick and safe time (ESST) amendments and Connecticut significantly expanding its existing paid sick leave law. Additionally, New York became the first state to establish a standalone paid leave entitlement specifically allocated for prenatal needs.  

In 2024, new paid leave requirements didn’t always come about through traditional processes. Three ballot initiatives (Alaska, Missouri, and Nebraska) and one court ruling (Michigan) established four new paid leave entitlements for 2025!  

“JessBot: What benefits were employees interested in this year?”  

A lot of the 2024 benefits trends looked similar to the ones in 2023. Employee well-being continued to be a top priority for many employers, especially with buzzwords like  workcation, polyworking, rage-applying, and “acting your wage” popping up in conversations about the state of the workforce in 2024. To better address work-life balance and provide benefits that workers say they want and need, many organizations expanded:
  

  • Flexible work options (e.g., work-from-anywhere arrangements, hybrid work environments, reduced workweeks) 

  • On-demand pay (also known as earned wage access);  

  • Upskilling and professional development.  

These are trends that aren’t likely to go away soon, so don’t be surprised to see them continue into 2025.  

“JessBot: What are some things I might expect from the new administration? How about in 2025 in general?” 

A new presidential administration taking office always ushers in many changes in both policy and enforcement. Although it’s hard to predict (even for AI), employers will most likely see a lot less regulation coming from the federal government. However, generally, when federal regulation slows down, there is usually a significant uptick in state and local activity and complexity. So, expect to continue to see more states and localities addressing issues like AI, minimum wage, paid leave, pay transparency, pay data reporting, etc. that are discussed above. 

Other potential changes could include:  
 

  • Tax proposals that could affect payroll tax withholding (including possibly eliminating taxes on tips or overtime);  

  • Heavier I-9 enforcement;  

  • Adjustments to the guidance around the classification of independent contractors.  

As far as general 2025 predictions go, we’ll probably continue to see a lot of similar trends we saw in 2024 (e.g., AI, paid leave, pay equity). However, considering that AI was barely a topic of discussion just a few years ago, given how quickly trends can change, don’t be surprised if some new HCM-related curveballs arise!  

“JessBot: Wow, that’s a lot. Is that everything I need to know?”  

This is another question that might cause your AI resource (or your friendly employment/HR lawyer) to malfunction. And if there is one thing that applies universally, regardless of whether this blog was written by a real-life human attorney or a generative AI program, it’s that it is intended for informational purposes only and should not be a substitute for a comprehensive source of legal, tax, or HR advice. That’s what your personal advisors are for!  

You may also like:

Ready to get started?

See the Dayforce Privacy Policy for more details.

Subscribe to our Blog