Key Changes HR Leaders Need to Know for 2025

In the realm of labor and employment laws, HR leaders are facing new challenges and opportunities. Staying compliant with emerging regulations is crucial—not only to minimize risks but also to attract and retain top talent. At Next Level Impacts, we’re dedicated to empowering organizations with insights and strategies to keep up with these changes. Here, we break down three major regulatory shifts that could impact your recruitment strategy in the coming year and offer resources for staying ahead.

1. Pay Transparency Laws

The proposed federal Pay Transparency Act aims to increase salary transparency by requiring employers to disclose wage ranges in job postings. This legislation, if enacted, would amend the Fair Labor Standards Act and promote fairness and equity by eliminating pay disparities based on race and gender.

The proposed law aligns with a growing trend towards pay transparency, with at least 11 states and numerous cities and counties already implementing such regulations. As a result, job seekers are increasingly seeking positions with transparent salary information, impacting recruitment strategies for employers.

How This Impacts Recruitment:  
Organizations that proactively adopt pay transparency demonstrate a commitment to fairness and may appeal to job seekers who value transparency and equity. However, this shift also calls for a careful review of compensation ranges to ensure competitiveness and consistency across roles.

• Conduct Market Research: Use compensation surveys and benchmarking tools to understand where your salaries stand in relation to industry standards.
• Evaluate Internal Pay Equity: Regular pay audits can help you ensure that employees in similar roles with comparable experience are compensated fairly.
• Educate Hiring Managers: Equip hiring managers with guidelines on communicating pay transparency during interviews to strengthen the candidate experience.

2. FTC's Non-Compete Clause Ban

The Federal Trade Commission's (FTC) nationwide ban on noncompete agreements, originally scheduled to take effect on September 4, 2024, is currently paused. This delay follows an August ruling by a federal judge in Texas, who blocked the FTC’s rule that would have rendered most noncompetes unenforceable.

Noncompetes restrict employees from leaving a job and joining a competitor within a specific geographic area or timeframe. Today, nearly 18% of American workers are subject to noncompete clauses, which limits their ability to pursue new and potentially better job opportunities.

The Texas lawsuit, filed by the U.S. Chamber of Commerce and other plaintiffs, challenged the FTC’s authority to enforce this rule. Proponents of the ban argue that removing noncompetes would foster a job market where employees have greater freedom to advance their careers, while employers would need to adjust recruitment and retention strategies accordingly.

The outcome remains uncertain. The FTC may appeal the Texas court’s ruling, and, given the high stakes on both sides, the U.S. Supreme Court could eventually weigh in on the issue. HR professionals should stay alert for updates as the situation continues to develop.

How This Impacts Recruitment:  
If enacted, this ban could open the doors for talent mobility, enabling candidates to move more freely between companies and industries. While this may increase competition for high-level talent, it also calls for revised contract language to protect proprietary information.

• Update Employment Agreements: Focus on strong non-solicitation and confidentiality clauses to safeguard company interests.
• Promote Internal Mobility: Offering clear career growth opportunities can help retain valuable employees, minimizing the impact of increased competition.
• Monitor Legal Developments: Staying up-to-date on the status of this ruling is essential to ensure your contracts remain compliant.
• Identify Exceptions: Inform any employee who falls under the ruling’s “senior executive” exception, which would apply to less than 0.75% of workers

3. Affirmative Action & DEI&B Policy Changes

The recent Supreme Court ruling on affirmative action has sparked a broader conversation about diversity, equity, inclusion, and belonging (DEI&B) initiatives in over 30 states. This decision, coupled with a surge of state-level legislation restricting or regulating DEI&B programs, is creating a complex landscape for employers.

Furthermore, increasing pressure from shareholders and legal challenges from special interest groups has compelled many companies to reconsider or even abandon their DEI&B policies. This shift in the regulatory and social environment presents significant challenges for organizations committed to fostering diverse and inclusive workplaces.

How This Impacts Recruitment:  
Companies may need to adjust DEI&B efforts to align with state laws while still promoting inclusivity. In states with restrictive policies, HR might need to shift from public-facing DEI&B programs to internal strategies focused on fostering a diverse and inclusive culture.

• Internalize DEI&B: Move DEI&B initiatives toward internal programs like mentoring, leadership development, and inclusive hiring practices.
• Collaborate with Legal Counsel: Regularly review policies with legal experts to ensure compliance with state laws.
• Communicate with Transparency: Clearly communicate your organization’s stance on inclusivity and diversity to candidates, showing a genuine commitment to fostering a positive culture.

How Next Level Impacts Can Support Your Hiring Team

At Next Level Impacts, we’re dedicated to helping organizations navigate the ever-changing landscape in recruitment. Our team provides customized recruitment solutions that align with industry best practices and standards. By partnering with us, you can confidently adapt to changes while continuing to attract top talent in a way that’s fair, transparent, and sustainable.

Interested in learning more? Contact Next Level Impacts to explore how we can help your business stay ahead of the curve in talent acquisition.