2025 U.S. HCM compliance trends: A retro rewind

Did much of 2025 feel like pure chaos? It did to me, and I think many in the HCM compliance space would agree.  

To soothe some of our frayed nerves as we move into 2026, I thought we would shift this year’s article from last year’s high-tech JessBot piece and go a bit old school with some Xennial nostalgia. I mean, who doesn’t need some Lisa Frank stickers, an Oasis reunion, Nirvana t-shirts, and a Tamagotchi to bring a smile to your face? And aren’t Labubus just a hybrid of a Popple, a Monchhichi, and a troll doll?  

Although many of the usual suspects we discussed in last year’s article (e.g., AI, minimum wage, paid leave, pay transparency, etc.) remained on the list of top employer concerns, there were some new ones this year.  

New administration changes are as unexpected as Blockbuster's late fees 

Policy, regulatory, and enforcement changes that occur after a new presidential administration takes office are as unexpected as Blockbuster charging late fees (i.e., everyone saw them coming). But to say this administration hit the ground running might be a bit of an understatement.  

The first week of the administration was a whirlwind of executive orders (EOs) and declarations. Although the rate of executive action has slowed down since January, the administration has continued to issue EOs, including those that could affect employers and workplaces.  

So far, the new administration’s actions have had an impact on employment issues in many areas, and 2026 appears likely to bring more of the same. 

OBBBA troubleshooting might involve a little more than blowing into NES cartridges 

And speaking of changes from the new administration, on July 4, 2025, the United States enacted H.R. 1 — the One Big Beautiful Bill Act (OBBBA). The 870-page bill includes hundreds of provisions on a wide array of topics, but most of the bill focuses on fiscal and tax changes. For example, it permanently extends the individual tax rates established by the 2017 Tax Cuts and Jobs Act and increases the limit for tax deductions for state and local taxes. 

A new tax deduction for qualified overtime compensation and a new tax deduction for qualified tips are two of the most impactful provisions for both employers and employees. Navigating these new developments might be slightly more complicated for employers than blowing into Nintendo Entertainment System cartridges before booting up Super Mario Bros. Employers will need to determine whether these provisions apply to their employees and what obligations they might have.  

AI regulations, Tamagotchi-style: Blink and you’ve missed an update 

This year was like 2024 in that we continued to see significant activity in the AI regulatory space. On a global scale, the European Union’s (EU's) AI Act, the world’s first comprehensive AI law, continued to make headlines worldwide.  

Not to be outdone, the United States continued to be highly active on AI regulation. Although many proposed bills didn’t pass or weren’t directly related to the HCM space, some significant legislation, regulations, and guidance did emerge this year.  

In a surprising move, Texas was one of the states to pass a state AI law, the Texas Responsible Artificial Intelligence Governance Act (TRAIGA). Maine passed “An Act to Ensure Transparency in Consumer Transactions Involving Artificial Intelligence,” which requires applicable organizations to disclose the use of an AI chatbot (and other relevant computer technology) in certain circumstances. 

While California passed several AI-related laws this year, some of the state’s most significant requirements were implemented by modifying existing regulations.  

First, the California Civil Rights Council amended existing employment discrimination regulations under the Fair Employment and Housing Act (FEHA) to address automated-decision systems (ADSs) in the workplace.  

Then, the California Privacy Protection Agency amended regulations under the California Consumer Privacy Act (CCPA) to update existing provisions and address new topics. The new sections of the regulations address automated decision-making technology (ADMT) (including employers’ use of ADMT for employment-related decisions), risk assessments, cybersecurity audits, and insurance companies. 

Some states also amended the AI laws they passed in 2025. For example, effective May 7, 2025, Utah updated its Artificial Intelligence Policy Act (AIPA). Colorado delayed the effective date of its comprehensive AI law. 

And just like a Tamagotchi digital pet dying the moment you turned your back on it, it won’t be a surprise that more AI regulatory activity is expected in 2026. But we could see the federal government battling it out with the states next year after the White House issued an Executive Order seeking to prevent state and local regulation of AI.  

I made you a mixtape of all my favorite new minimum wage rates 

Minimum wage increases this year could fill an entire mixtape: July updates on repeat, with January 2026 new releases already in the queue. Inflation continued to play a role in a lot of these increases. 

While in many U.S. jurisdictions, minimum wage annual rate changes are tied to cost-of-living indexes, other places with increases effective January 1 have established schedules for raising minimum wage rates to reach a certain amount by a set date.  

At the federal level, the White House issued Executive Order 14236, revoking Executive Order 14026. This had increased the minimum wage for federal contractors. 

Think of pay transparency requirements as the clear Game Boy of compensation 

I was once desperate for a clear Game Boy, which revealed the wiring and mechanics of the handheld game console. And isn’t the pay transparency law trend designed to do much of the same thing for compensation?  

We began the year with pay transparency laws in Illinois and Minnesota taking effect on January 1, 2025. Under the Illinois law, employers with 15 or more employees need to include the pay scale and benefits for a position in any specific job postings. The law also created new requirements related to promotional opportunities for current employees. The Minnesota law requires employers with 30 or more employees at one or more sites in Minnesota to make certain pay transparency disclosures in all job postings. 

More laws took effect later on in 2025, including ones in New Jersey, Vermont, the City of Cleveland, and Massachusetts. And several new jurisdictions enacted pay transparency laws, including Delaware and Columbus, Ohio. California also updated its existing pay transparency requirements. 

There’s something for everyone in hiring and recruiting updates (just like the Scholastic Book Fair) 

Growing up, my favorite day of the school year was when the Scholastic Book Fair came to town. There was always something for everyone: the glossy poster rack, the futuristic gadget books with holographic colors, or the latest book in your favorite series.  

The wave of new hiring and recruiting developments in 2025 reminded me a bit of that book-fair variety. For example, new hire notices seemed to be trending with Rhode Island, Oregon, and California adding new compliance requirements. A new Oregon law makes it an unlawful employment practice for employers to require or request disclosures of certain age-related information during the early stages of the hiring process. The federal government also made updates to Form I-9 and E-Verify.  

And the ban-the-box law trend is still going strong, with at least a couple of jurisdictions updating their existing laws (e.g., Washington and Philadelphia).  

Finally, although it seems unlikely that federal pay data reporting will be a priority of this administration, at least one new jurisdiction (New York City) is joining the list of places with their own versions. 

Across the HR river: New leave rights, no wagon lost 

Oregon Trail was brutal. You were crossing a river, and bam! Suddenly, you’ve lost an ox, a wheel, and half your rations. And when misfortune struck without warning on the trail, leave benefits were nonexistent. Fortunately, the leave landscape in 2025 is much kinder to employees. 

New paid sick leave laws took effect this year after state voters approved measures in the November 2024 election. Beginning July 1, 2025, covered Alaska employers are required to provide eligible employees with at least one hour of paid sick leave for every 30 hours worked. Nebraska voters also approved the creation of a new statewide minimum paid sick leave benefit. Likewise, Missouri voters approved the creation of a new statewide minimum paid sick leave benefit, but the state repealed the law. 

Other jurisdictions revised their existing leave laws. For example, New York City amended its Earned Safe and Sick Time Act (ESSTA) and Temporary Schedule Change Act (TSCA). The changes, which generally expand employees’ access to leave, will take effect on February 22, 2026. Earlier this year, the city also adopted administrative rules requiring covered employers to provide paid prenatal personal leave. Also, places like Pittsburgh, Philadelphia, Maine, St. Paul, and Minneapolis amended their paid leave laws in 2025.  

The above examples are just some of the laws enacted or amended this year. There were numerous other developments related to leave-related laws, regulations, and guidance across the U.S. on various leave topics, including paid family and medical leave, paid leave insurance programs, leave for blood and organ donation, military leave, school conference leave, and leave for childbirth, postpartum care, and infant appointments. 

It’s not quite Lisa Frank, but benefits still brighten employees’ days 

Once upon a time, your childhood definition of “must-have essentials” might have started with Lisa Frank folders, unicorn stickers, and school supplies so bright they required heart-shaped sunglasses. In 2025, the adult version of those neon necessities might be a little less colorful, but competitive employee benefits continued to be a priority for both employees and employers. 

One of the biggest trends this year involved employees’ desire for more personalized and flexible benefits packages. Employees appear to be interested in having much more of a choice of benefits based on what matters most to them, from different healthcare options to other lifestyle benefits. Gen Z has reportedly even developed a new buzzword for this: benefitmaxxing.  

Some of the other major benefits trends we saw this year involved:
  

• Mental health and well-being benefits 
• Flexible work and life support options 
• Holistic wellness 
• Financial wellness programs 
• AI-enhanced benefits administration 
• On-demand pay 
• Real-time upskilling 

With these benefits trends gaining momentum, 2026 might shape up to offer a more colorful palette, even if it’s not quite to the level of Lisa Frank rainbow leopards yet.  

That’s the story of 2025, morning glory!  

This year was quite a whirlwind. So, what’s ahead for 2026? We’ll likely keep seeing familiar themes on repeat, including minimum wage hikes, an evolving pay equity landscape, expanding leave rights, and the continued rise of AI. We are also likely to see increased state and local regulatory activity if the federal government is less active in passing laws and regulations. But if the past few years have taught us anything, it’s that workplace trends can shift faster than a surprise drop on a ’90s mixtape, so don’t be shocked if 2026 brings a few unexpected HCM tracks.