10 Big Employment Law Trends to Watch This Year

Employment Law in 2025: Key Legal Risks HR Needs to Watch

As workplace laws evolve, HR professionals must brace for a surge in legal challenges. A recent survey highlights the biggest risks employers may face in 2025, making HR compliance training more critical than ever.

1. Discrimination & Harassment Lawsuits on the Rise

Half of the respondents predict an increase in discrimination and harassment claims, fueled by backlash against DEI programs and a growing number of reverse discrimination lawsuits. A key case to watch: Ames v. Ohio Department of Youth Services, with oral arguments set for Feb. 26, 2025.

2. Employee Data Privacy Under Scrutiny

Nearly 48% foresee legal challenges related to data privacy, a sharp rise from last year. Cybersecurity threats and evolving compliance rules are driving concerns, making data protection a top priority for employers.

3. Gig Worker & Independent Contractor Rules in Flux

With a new administration in place, worker classification laws could shift again. If Trump reinstates employer-friendly rules, expect changes in how independent contractors are classified.

4. Wage & Hour Disputes: Pay Transparency Matters

With pay transparency laws expanding, compliance will be critical.  Employers must stay updated on new legislation to avoid costly lawsuits. This includes ensuring proper payroll compliance training for all relevant personnel.

5. AI in Hiring: Legal Risks Grow

AI-driven hiring tools are under fire, with 36% of respondents fearing increased litigation. A class-action lawsuit against Workday accuses the company of AI-based discrimination, setting the stage for more legal battles.

6. Disability Accommodations Remain a Hot Topic

The EEOC reported that 43% of its lawsuits in 2024 involved disability claims. Employers must ensure compliance with ADA regulations to avoid legal action.

7. Tougher Regulatory Scrutiny Ahead

With regulatory uncertainty post-Chevron, 73% of respondents believe enforcement will become more unpredictable, adding complexity to compliance efforts.

8. Paid Leave Laws Expand

Three more states—Alaska, Missouri, and Nebraska—will implement paid sick leave laws in 2025, increasing compliance challenges for multi-state employers.

9. Multi-Jurisdiction Compliance Gets Trickier

More states are enacting employment laws, making it harder for employers to maintain compliance across multiple jurisdictions. Pay transparency laws in Illinois and Minnesota are just the beginning.

10. Unionization & Collective Bargaining Pressure Builds

With union activity rising, 22% of employers expect more legal disputes. However, Trump’s return may shift NLRB policies in favor of businesses.

HR leaders must stay proactive to navigate these legal risks in 2025. Keeping up with evolving regulations, especially in areas like taxation and payroll training, will be key to staying compliant and avoiding costly litigation. Investing in ongoing training programs can help businesses ensure compliance with the latest tax and payroll laws.