The PrestigePEO Perspective – February 2025

A competitive retirement plan doesn’t just help your employees—it strengthens your business. With PrestigePEO’s 401(k) solutions, you gain access to high-quality retirement plans at lower costs, thanks to our partnership with Slavic401k. We handle compliance, administration, and investment guidance, so you can focus on growing your business while offering a valuable benefit that attracts and retains top talent.

Managing payroll in-house can be time-consuming, complex, and risky—but it doesn’t have to be. With PrestigePEO, you gain a trusted payroll partner that ensures accuracy, compliance, and efficiency. Our certified payroll experts handle everything from tax filings to direct deposits, so you can focus on growing your business. Plus, with integrated time tracking and self-service employee access, payroll management has never been easier. Let us handle payroll so you can focus on your business. Contact us today to learn more!

Staying compliant with ever-evolving employment laws can be challenging for business owners. PrestigePEO’s Essential Compliance Insights for the Northeast Region webinar, led by our VP of General Counsel Elisabeth Shaw and Associate General Counsel Carrie Pilon, provides key updates on federal regulations, state laws in New York, New Jersey, and beyond, and emerging employment law trends. Gain the knowledge you need to protect your business and stay ahead of compliance changes.

Navigating evolving employment laws across California, Oregon, and Washington is essential for business success. PrestigePEO’s Navigating West Coast Employment Law in 2025 webinar, led by our compliance experts Megan Siegel and Alexandra Sankin, provides key updates on new regulations, case law developments, and emerging workplace trends. Stay informed and ahead of compliance risks with expert insights tailored for West Coast businesses.

The speed at which the political environment seems to be shifting can leave employers wondering what to anticipate as we move into 2025.  We have already witnessed a number of changes that while predicted, were not expected this early in the new administration.

Several of these changes included those to the National Labor Relations Board (“NLRB”). The National Labor Relations Board is an independent federal agency that enforces the National Labor Relations Act. The NLRB is focused on employee and union rights and does so by investigating charges, facilitating settlements, deciding cases, conducting union elections, and enforcing court orders. The NLRB also engages in rulemaking efforts to further its commitment to safeguarding employee and union rights. In order to accomplish its purpose, the NLRB is comprised of many departments and divisions but is led from the top by The Board, which may be comprised of a total of five Members, and The General Counsel.

Shortly after taking office, President Donald Trump dismissed the National Labor Relations Board General Counsel Jennifer Abruzzo and surprisingly unseated Board Member Gwynne Wilcox, as well.  This removal of Wilcox has reduced the Board’s membership to a two-person board.  The NLRB requires a three-person quorum in order to legislate and issue decisions, thus resulting in the suspension of the Board’s ability to adjudicate cases, set new legal precedent, or engage in general rulemaking. The President’s removal tactics have ignited legal challenges and will likely result in increased legal scrutiny pertaining to executive control over independent agencies.

Employers are left to wonder about the future of the NLRB’s overall reach with labor law enforcement.  Should the Board be restocked with a Republican majority, employers can likely expect a reversal of many Biden-era priorities such as joint employer status, worker classification, and protected concerted activity.  With this shift in enforcement priorities, legal experts agree that the result could potentially be less aggressive prosecution of alleged unfair labor practices resulting from employee activities such as workplace protests and mandatory meeting.  There may also be a shift in the worker classification definition favoring independent contractor designations, otherwise returning to the more lenient rule issued during Trump’s first administration.  A shift to employer friendly non-solicitation and noncompete clauses is also expected.

In another first of its kind, President Trump has fired two seated members of the Equal Employment Opportunity Commission (“EEOC”), prior to the expiration of their appointed tenure, leaving only two EEOC Commissioners.  Similar to the NLRB, the EEOC requires a three-member quorum to create new regulation or issue legal directives. While a number of changes are expected to this agency, it is likely that Trump will fill at least one vacancy in the short term, with a Republican majority expected over time.

EEOC priorities are also expected to shift away from many programs including Diversity, Equity, and Inclusion (DEI) initiatives, with speculation that even private DEI programs may be regulated, the Pregnant Workers Fairness Act may be rescinded, there is expected expansion of employee’s religious rights that may impact LGBTQ+ workers’ ability to bring harassment or hostile workplace claims, as well as restriction of gender identity efforts, a conversative move towards employee’s bathroom access, and finally, it is expected that the EEOC will pursue “reverse discrimination” claims in the workplace.

Wage and Hour changes are also expected in the New Year.  It is anticipated that legal challenges to the overturned 2024 efforts to adjust the overtime requirements and increase the exempt salary threshold will be abandoned by the Department of Labor.  Modest increases to the salary threshold may take shape, however, as well as a push for slight increases to the federal minimum wage, as a result of campaign promises. As the federal government’s anticipated ease of enforcement efforts materialize, there is also expected increase enforcement activity at the local and state levels.  Employers are encouraged to stay updated as to the workplace rules and regulations in their worksite locations to better understand the impact these obligations will have in the near future.

PrestigePEO is monitoring these changes and is here to help.  Contact us today to learn how our HR solutions can keep your business protected and prepared.

As artificial intelligence (AI) continues to reshape the workplace, state and local governments are stepping in to regulate its use in employment decisions. In the absence of comprehensive federal legislation, employers must navigate a complex and rapidly changing regulatory landscape with a patchwork of state and local rules. Many of these new laws focus on mitigating the risk of algorithmic discrimination which occurs when AI-driven decision-making results in biased outcomes against protected groups.

State and Local AI Regulations Impacting Employers

• The Colorado AI Act, taking effect in 2026, requires businesses using AI in employment decisions to exercise reasonable care in preventing bias and mandates transparency for AI interactions.
• Illinois’ recent amendment to its Human Rights Act prohibits AI-driven discrimination and requires employers to notify employees when AI is used in hiring.
• New York City Local Law 144, already in effect, mandates annual bias audits for automated hiring tools and requires disclosure to job applicants.

Pending AI Employment Regulations

While some key AI employment laws are already in place, others are on the horizon.

• California is advancing multiple AI-related measures. The California Privacy Protection Agency (CPPA) is finalizing rules that would require businesses to notify individuals before using AI in employment decisions and allow them to opt out. Further, the California Civil Rights Council is proposing restrictions on AI screening tools, mandating anti-bias testing, and requiring employers to retain AI-generated hiring data for four years.
• In Texas, pending legislation would establish compliance requirements for high-risk AI systems, with steep penalties for non-compliance.

How Employers Can Prepare

Employers should conduct regular bias audits, ensure transparency in AI-driven decisions, and maintain human oversight in hiring and employment processes. Staying informed about evolving AI regulations minimizes legal risks and ensures compliance. As AI regulations develop, businesses must proactively adapt to emerging requirements, prioritizing fairness and accountability in their AI-driven employment practices.

PrestigePEO is here to support your businesses like yours. Contact us today to learn how our HR experts can help you navigate these changes with confidence.

In a much-anticipated decision, the Supreme Court of the United States (SCOTUS) has published its opinion on the E.M.D. Sales, Inc. v. Carrera, No. 23-217 (Jan. 15, 2025) case.  At issue in this matter was the Court’s consideration of which standard of proof applies to an employer’s burden when determining whether an employee is exempt from the minimum wage and overtime requirements under the Fair Labor Standards Act.  In an earlier United States Court of Appeals for the Fourth Circuit decision, it was ruled that the higher standard of proof, or that of “clear and convincing evidence” must be established by an employer in order to contend that an overtime exemption under the FLSA applies to an employee’s status.  The initial ruling specifically involved eligibility under the FLSA’s outside sales exemption, however the recent SCOTUS ruling applies to all FLSA exemptions.

The Supreme Court, in a unanimous decision, reversed the Fourth Circuit’s ruling that held the higher standard, or that of “clear and convincing evidence” was required in order for an employer to establish that the overtime exemption was applicable as an affirmative defense in cases involving claims of FLSA violations.  Rather, now an employer need only establish that an overtime exemption may be applicable through the lower “preponderance of the evidence” standard, which lessens the burden on the employer when establishing FLSA exemptions.

PrestigePEO is closely monitoring SCOTUS decisions that may impact businesses. Contact us today to learn how our HR experts can help you stay compliant and prepared.

As a reminder, California employers are entering the third year of the expanded California Pay Data Reporting requirements.  This annual Pay Data Report is due by May 14, 2025.  Employers are encouraged to start planning now for this deadline, to ensure compliance with the increasingly complex requirements.

This reporting requirement applies to all private employers of who “regularly employ” 100 or more employees and at least one (1) employee in California and/or employers who hired 100 or more workers through labor contractors and at least one (1) in California.  Employers will be required to submit Employers Reports and Labor Contractor Reports if they fall under both criteria and for employers with multiple establishments, a report must be submitted for each establishment. For employers with multiple legal entities and multiple establishments, the report must be submitted by legal entity for each establishment.

The California Pay Data reporting requirements are very fact specific.  Employers are encouraged to work with their various stakeholders soon to ensure that the necessary time is considered when planning for this May 14, 2025, deadline.

PrestigePEO is here to help businesses navigate California’s Pay Data Reporting requirements. Contact us today to learn how our HR experts can ensure your compliance with ease.