The PrestigePEO Perspective – March 2025

Staying on top of evolving employment laws is a challenge for businesses. With limited HR resources, managing compliance, payroll, and workplace policies can quickly become overwhelming—yet the risks of non-compliance are too big to ignore.

That’s where PrestigePEO comes in. Our team of HR and compliance experts helps SMBs navigate complex regulations, mitigate risk, and streamline payroll and tax administration—so you can focus on growing your business with confidence.

Offering a 401(k) plan is a powerful way to attract and retain top talent—but for many SMBs, high costs and administrative complexity can be barriers.

That’s where PrestigePEO comes in. Our PEO-sponsored 401(k) plans give SMBs access to high-quality, cost-effective retirement benefits that would typically only be available to larger companies. With expert investment advisors, simplified plan management, and reduced fees, you can provide your employees with a valuable retirement plan—without the hassle.

Managing HR internally can be time-consuming and costly for SMBs. PrestigePEO acts as your dedicated HR partner, providing expert support in employee relations, compliance, payroll, and benefits administration—all without the expense of an in-house HR team. Our SHRM and HRCI-certified professionals handle the complexities of HR, so you can focus on growing your business with confidence.

Running a business comes with countless HR challenges—from employee benefits and payroll to compliance and risk management. With PrestigePEO as your co-employer, you retain full control over your business while we handle the complexities of HR. Our partnership gives you access to premium employee benefits, expert compliance support, and streamlined payroll administration—helping you save time, reduce costs, and focus on growth.

Staying compliant with evolving employment laws is extremely important for businesses. Our expert-led webinar covered key legal updates across Midwest and Western states, including wage laws, paid leave mandates, and workplace compliance changes that could impact your business.

Don’t let regulatory changes catch you off guard—watch our recorded webinar for the latest insights, and contact PrestigePEO to ensure your business stays compliant.

In late February, the Supreme Court of the United States ruled on an Alabama case involving unemployed workers’ efforts to seek unemployment insurance (“UI”) benefits.  At issue was the state of Alabama’s requirement that workers pursuing unemployment claims must first exhaust all available administrative processes before they could avail themselves of any remedies afforded by pursuing federal due process claims in state court.  The state’s unemployment compensation process required that anyone pursuing UI benefits must first file an application with the state’s Department of Labor.  If the benefits were denied, the unemployed worker was required to seek a hearing before the department’s Hearings and Appeals Division and then the Board of Appeals.

The state rules preclude state courts from weighing in on any appeals from these administrative decisions until the decisions are final and all administrative remedies have been exhausted.  The unemployed workers in this case filed suit in state court alleging federal civil rights violations and unlawful delays in processing of their benefits claims and in the administrative appeals process, itself.  These claims purported that the state had otherwise violated their procedural due process rights and the Social Security Act, violations of the 42 U.S.C. §1983.  42 U.S.C. §1983 allows people to sue state government officials for violating their civil rights under federal law.

In a 5 to 4 decision, the Supreme Court agreed with the group of unemployed Alabama workers, renewing their civil rights claims under 42 U.S.C. §1983.  Justice Kavanaugh noted that the administrative exhaustion rule created a “catch-22” for the workers, as it prevented the workers from pursuing relief in state court while waiting on state processes.

Justice Brett Kavanaugh wrote in the majority opinion: “[T]hat ruling created a catch-22: Because the claimants cannot sue until they complete the administrative process, they can never sue under §1983 to obtain an order expediting the administrative process. This Court’s precedents do not permit States to immunize state officials from §1983 suits in that way.”

The Court concluded that while the workers may proceed with the federal due process claims and remanded the case for further proceedings not inconsistent with its opinion, the Court did not take a position on the merits of the underlying claims.

PrestigePEO is here to help. Our team of HR and compliance experts keeps you informed on critical legal updates and helps you mitigate risk. Contact us  today to learn how we can support your business and ensure compliance with evolving regulations.

Recent legal developments have created uncertainty around diversity, equity, and inclusion (DEI) initiatives, particularly for businesses that contract with the federal government. This year, the federal government scaled back its support for DEI initiatives and issued executive orders affecting federal agencies’ diversity, equity, and inclusion (DEI) programs. Since then, a federal court has temporarily blocked enforcement of specific provisions that restrict certain DEI initiatives. Meanwhile, attorneys general from numerous states have issued guidance on how businesses can maintain legally compliant DEI initiatives. While primarily targeting federal entities, these directives may influence private employers, especially those with federal contracts, to reassess their DEI strategies.

Key Considerations for Employers

With ongoing legal and regulatory changes, businesses should assess their DEI programs to ensure they align with federal and state laws. State-level guidance may differ, so employers should be aware of regulations that apply in their specific locations.

Federal and state anti-discrimination laws prohibit race- and gender-based quotas in hiring and promotions. Employers should ensure their DEI initiatives focus on expanding access and opportunity rather than mandating specific outcomes.

Employers can continue to promote diversity and inclusion while implementing legally sound DEI strategies by:

• Broadening recruitment efforts to attract diverse talent pools.
• Using structured, skills-based hiring processes to mitigate bias.
• Offering leadership development and mentorship opportunities equitably.
• Providing training on topics such as inclusive leadership and bias awareness.
• Maintaining inclusive workplace practices to help attract and retain top talent.

Moving Forward in the Evolving Landscape

The blocked executive orders may still face appeals or revisions, and other legal challenges related to DEI policies are ongoing. Employers doing business with the federal government should stay updated on compliance obligations tied to grants and contracts. While legal challenges continue, companies can foster inclusive workplaces by focusing on lawful, well-structured DEI initiatives.

Given the evolving landscape, PrestigePEO keeps a close watch on these developments and provides expert guidance to help you navigate compliance while maintaining inclusive workplace practices. Contact us today to ensure your DEI initiatives align with the latest legal requirements.

In step with many of the new Trump administration decisions, the Acting General Counsel for the National Labor Relations Board has reversed course on a number of policy priorities of the former administration.  The Acting General Counsel, William Cowen, appointed by President Trump on February 3, 2025, has ushered in a new wave of priorities for the new administration, by enacting his first General Counsel Memorandum 25-05. General Counsel Memorandums are memos that outline the NLRB’s current policies and priorities on various employment related issues and influence related litigation and resulting NLRB rulings.

Memorandum 25-05 directly outlines that many of the prior interpretations of federal law would no longer be pursued, leaving many of the most influential memos from the previous administration no longer in effect.  Importantly, these include the opinions outlining that most non-compete agreements violate federal law, that stay or pay provisions are potentially permission (subject to state law), modifications to employer’s ability to require attendance at “captive audience,” and others.  While this memo does not change current labor law or the application of recent NLRB rulings, it will inevitably alter the course of future rulings.

Experts agree that change occurs slowly at the NLRB.  It is important for employers to note that this most recent memo is not binding law, and it will take time for the NLRB to reverse precedent already set in labor law decisions.

PrestigePEO provides expert HR and compliance support to help you navigate evolving labor regulations and mitigate risk. Contact us today to ensure your business is prepared for these changes.

A new bill advancing through the New York State Legislature could significantly alter the way employers handle severance agreements. The No Severance Ultimatums Act passed the state Senate on March 4 and now awaits review in the Assembly. This legislation would impose stricter requirements on how severance agreements are presented and executed, aiming to prevent employers from pressuring employees into signing unfair terms.

Under the proposed law, all employees in New York would be entitled to at least 21 business days to review a severance agreement before signing. Additionally, once an employee signs the contract, they would have seven days to revoke it, and it would not become effective until that revocation period expires. Employers would also be required to notify employees of their right to consult an attorney before signing. If passed, the law would take effect immediately. Employees could waive the 21-business-day review period and sign the agreement earlier, but the seven-day revocation period would remain mandatory.

Federal and state laws provide similar protections, but only in specific circumstances.

Employees over 40 already receive a 21-day review period and seven-day revocation period under the Older Workers Benefit Protection Act (OWBPA). New York law also grants these rights to employees resolving discrimination, harassment, or retaliation claims when the agreement includes a non-disclosure clause. The proposed law would extend these protections to all employees, regardless of age or claim type. Additionally, the review period under the new law would be counted in business days rather than calendar days, effectively giving employees more time to evaluate their agreements.

If the bill is enacted, employers must update their severance agreements and internal processes to align with the new requirements. Failure to comply could result in invalid contracts, increasing the risk of legal challenges. Employers should also review their policies to ensure they are prepared for changes.

If passed, this new legislation could require significant updates to severance agreements and internal policies. PrestigePEO helps businesses stay ahead of evolving employment laws, ensuring compliance and reducing legal risks. Contact us today to learn how we can support your business in navigating these changes.