In this month’s update, we highlight significant employment law changes and practical compliance insights to keep your business compliant, minimize risk, and empower a productive workforce. Need a customized, legally compliant employee handbook? Visit our Handbook page to build yours in just a few clicks.
HR & Legal Updates
Federal: The Corporate Transparency Act is Irrelevant Once Again
- On February 18, 2025, the U.S. District Court for the Eastern District of Texas in the case of Smith, et al. v. U.S. Department of the Treasury, et al., reinstated the beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA), and FinCEN extended the compliance deadline to March 21, 2025.
- However, on March 2, 2025, the Treasury Department released a statement confirming that they will not enforce any “penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either.”
- While the CTA is still technically alive, US companies no longer need to follow its requirements. Foreign businesses will still need to collect the appropriate information and make their reports once the Treasury Department releases an updated rule.
Federal: Department of Education Sends Dear Colleague Letter
- On February 14, 2025, acting Assistant Secretary for Civil Rights in the Department of Education, Craig Trainor, published a “Dear Colleague” letter claiming that “educational institutions have toxically indoctrinated students with the false premise that the United States is built upon ‘systemic and structural racism’ and advanced discriminatory policies and practices.” Trainor states that supporters of discrimination have used diversity, equity, and inclusion (DEI) as pretext to advance their discriminatory ideology and practices. Claiming that efforts and practices to promote diversity, equity, and inclusion are illegal, Trainor advises educational institutions to: “(1) ensure that their policies and actions comply with existing civil rights law; (2) cease all efforts to circumvent prohibitions on the use of race by relying on proxies or other indirect means to accomplish such ends; and (3) cease all reliance on third-party contractors, clearinghouses, or aggregators that are being used by institutions in an effort to circumvent prohibited uses of race.”
Federal: Department of Justice to Investigate Private Sector DEI Practices
- On February 5, 2025, U.S. Attorney General Pam Bondi published a memorandum requiring the Civil Rights Division and the Office of Legal Policy to submit a joint report with recommendations on how to end DEI practices by private employers who receive federal funds, including possible criminal investigations. However, the memo includes a footnote stating that only practices “that discriminate, exclude, or divide individuals based on race or sex” are the targets of this enforcement, and that “observances that celebrate diversity, recognize historical contributions, and promote awareness without engaging in exclusion or discrimination” are not prohibited. The presence of that footnote means, essentially, that employers must continue to follow existing law, as the practices being scrutinized under this memo are already unlawful. Employers should review their DEI practices and ensure they stay current with this administration’s continuing assault on diversity, equity, and inclusion.
Federal Court Temporarily Blocks Trump’s Anti-DEI Executive Order
- In response to Executive Order (EO) 14173 titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” which targets DEI practices and labels them illegal, the National Association of Diversity Officers in Higher Education and others filed a lawsuit challenging the EO. On February 21, 2025, a federal judge issued a nationwide preliminary injunction blocking enforcement of the EO, stating that the order and related agency enforcement threats are unconstitutionally vague and run contrary to the first amendment. Until further notice, enforcement of EO 14173 is halted.
Federal: NLRB GC Rescinds Pro-Labor Memos
- On February 14, 2025, National Labor Relations Board Acting General Counsel William Cowen rescinded multiple memos issued by the Biden-era GC, Jennifer Abruzzo. These memos did not have the force of law, and neither does their rescission. However, the fact that the content of the rescinded memos was decidedly in favor of worker protection signals a shift in the direction of the NLRB’s stance on employer-employee relations. In particular, these memoranda restricted the use of non-competes with employees and provided for greater employee recovery for improper non-compete use. Their rescission indicates that this NLRB will be more friendly to non-competes.
D.C. Raises Non-Compete Wage Threshold
- Washington D.C. law states that non-compete agreements may only be enforced against employees who earn over a certain threshold (based on the Consumer Price Index). That salary threshold was updated on February 12, 2025, from $154,200 generally and $257,000 for medical specialists to $158,364 and $263,939, respectively. Employees earning below those thresholds may not have non-competes enforced against them.
Florida Introduces New E-Verify Bill
- On February 17, 2025, Florida legislators introduced a bill (SB 782) to require all employers in the state to verify new hire immigration status and employment eligibility using the federal E-Verify system, not just those with 25 or more employees as is currently the case. No action has been taken yet aside from the bill’s initial filing.
Idaho Introduces New E-Verify Bill
- Idaho introduced legislation on February 14, 2025 that would require all Idaho employers to use the federal E-Verify system to verify the legal employment status of all new employees within 3 days of hire. So far, no further action has been taken.
Michigan Updates Minimum Wage Schedule
- Michigan minimum wage law has been in flux in recent months. Review our special update about Michigan minimum wage and sick leave laws for the latest information.
Michigan Updates Sick Leave Law
- The Michigan legislature came to a last-minute compromise on minimum wage and sick leave updates that were scheduled to take effect February 21, 2025. Review our recent special update about Michigan minimum wage and sick leave laws for the latest information.
Missouri Requires New Sick Leave Notice
- On November 5, 2024, voters approved Proposition A, which provided new sick leave benefits for employees. Under the new law, employers must provide employees with written notice about earned paid sick time within 14 days of hire or by April 15, 2025, whichever is later. The notice must include information on how employees will accrue paid sick leave, their right to use it, and protections against retaliation. Employers must also begin displaying a sick leave informational poster in the workplace by April 15, 2025. The Department of Labor has yet to release a model notice or poster.
Missouri: Kansas City Adds Criminal History to List of Protected Characteristics
- Kansas City, Missouri recently passed an ordinance that adds criminal histories to the list of protected characteristics, making it illegal to discriminate against people with criminal histories. The ordinance specifically prohibits the city from discriminating in hiring and employment decisions based on a person’s criminal history, but it is not clear whether that prohibition applies to private employers. Because of this ambiguity, private employers should consider not using a person’s criminal history as a deciding factor in making hiring or employment decisions.
New York Postpones Retail Worker Safety Act
- On September 4, 2024, Governor Hochul signed the Retail Worker Safety Act into law, requiring employers with at least 10 retail employees to develop a workplace violence prevention policy and workplace violence prevention training. Employers may develop their own policies and training or use the model plans to be released by the NYDOL. Further, beginning January 1, 2027, employers with 500 or more retail employees nationwide must provide access to panic buttons for employees to immediately contact police.
- Originally, the law required employers to have their workplace violence prevention plans in effect by March 4, 2025. However, the Governor signed an amendment on February 14 that pushes the effective date to June 2, 2025.
North Carolina Proposes Retirement Plan For Small Businesses
- On February 10, 2025, the North Carolina legislature introduced a bill that would allow employees of small businesses to save for retirement even when their employer doesn’t provide a plan. If passed, this bill would require employers to facilitate the withholding of funds from employee paychecks to make contributions to the voluntary retirement program. Employers would not be required to contribute. No further action has been taken on this bill.
Ohio Implements New Pay Stub Requirements
- Ohio recently passed HB 106, which adds new pay stub requirements to Ohio Revised Code Section 4113.14. Beginning April 9, 2025, employers must include all the following information on employee paystubs, which must be provided every pay period:
- The employee’s name;
- The employee’s address;
- The employer’s name;
- The total gross wages earned by the employee during the pay period;
- The total net wages paid to the employee for the pay period;
- A listing of the amount and purpose of each addition to or deduction made that pay period;
- The date the employee was paid and the pay period covered by that payment;
- For hourly employees:
- The total number of hours the employee worked in that pay period;
- The hourly wage rate at which the employee was paid;
- The employee’s hours worked in excess of forty hours in one workweek.
Ohio Proposes Non-Compete Ban
- On February 5, 2025, Ohio legislators introduced a bill (SB 11) to ban post-employment non-competes in the state. This bill would void any non-compete executed or amended after the effective date. There has been no additional action taken regarding this bill so far.
Rhode Island Publishes New Veterans Benefits Employment Poster
- Rhode Island published a new veterans benefits poster. Employers should replace their existing posters. We’ve added the updated version to the 50-State Hiring Kit.
Texas Introduces Ban-The-Box Legislation
- Texas saw the introduction of a new ban-the-box bill in the legislature on February 5, 2025. This bill would prohibit employers from asking about applicants’ criminal histories until they have invited the applicant for an interview. That prohibition would also apply to employers who include criminal history inquiries on initial applications. No further action has been taken regarding this bill so far.
Washington Court Limits Anti-Moonlighting Agreements
- Washington law prohibits anti-moonlighting agreements with employees who earn less than twice the minimum wage ($33.32/hr) but provides an exception where those kinds of agreements can be enforced against low wage workers if they are necessary to ensure the employee follows their common law duty of loyalty to the employer. However, a new decision from the Washington Supreme Court requires that the exception allowing anti-moonlighting provisions with low-wage employees must be narrowly construed. Employers should ensure that any anti-moonlighting agreements they have in place are with employees who earn at least $33.32/hr or are truly necessary and drafted so that they only prohibit employee actions that truly infringe on the employer’s legitimate interests.
Disclaimer: The information in this HR & Legal Update is provided for general educational purposes only and does not constitute legal advice. Akamai HR Solutions, LLC is not a law firm, and no attorney–client relationship is created by your use of this content. Laws may change or apply differently to your business. For legal guidance tailored to your specific circumstances, please consult a qualified attorney.