HR Compliance 2025: The Evolving Role Of HR

4 areas HR needs to act decisively to mitigate risks

Shaped by new labor laws, emerging technologies, and shifting cultural norms, the 2025 human resources (HR) compliance landscape is constantly evolving. HR professionals need to stay informed to steer organizations through an increasingly complex environment where legal compliance and ethical leadership go hand in hand. 

As compliance expectations rise globally, HR's role is expanding, particularly in areas like data privacy, artificial intelligence (AI) governance, and anti-corruption oversight. This article explores four critical areas where HR teams need to act decisively to maintain compliance and manage risk in the year ahead.

 

1. Rethinking Pay Transparency and Labor Law Compliance

Pay equity is no longer just a best practice. It is becoming a law in many jurisdictions. In Illinois, for example, employers with 15 or more workers are now required to include salary ranges and benefits in job postings, part of a package of employment laws that took effect in January 2025. Similar legislation in Minnesota, New Jersey, Vermont, and Massachusetts reflects a push to close gender and racial pay gaps by increasing visibility into compensation practices.

HR teams should regularly review their compensation practices to ensure compliance and competitiveness. That means looking beyond just base pay, including bonuses, benefits, and how promotions are handled. If any pay gaps or inconsistencies show up, it is best to fix them early before they turn into legal issues. Job postings should also be consistent across all platforms, clearly showing pay ranges and benefits to set a tone of transparency and build trust with candidates from the start.

Hiring managers also need to be brought into the process. Training them on the nuances of pay transparency laws ensures they do not unknowingly undermine compliance efforts during interviews or negotiations. Done well, these measures not only reduce legal risk but also help build a more inclusive and trustworthy employer brand.

2. Governing the Use of AI in HR Functions

AI is now embedded in everything from applicant tracking systems to performance reviews. But as the tools grow more powerful, so do the risks. In states like Colorado and Illinois, new regulations are requiring employers to scrutinize their use of algorithm-driven technology, especially in hiring. These laws are part of a shift toward ethical tech governance prompted by concerns over bias and transparency. 

To address this, HR leaders need to subject AI-driven systems to strong vetting and oversight. That begins with a clear, written policy outlining how AI tools are implemented and monitored across HR processes. Regular audits, ideally in collaboration with legal and IT, can help identify unintended bias or performance gaps. For example, if an AI tool used in recruiting disproportionately filters out candidates from certain demographic groups, that is unethical and exposes the organization to legal and reputational risk.
 
On the data side, privacy safeguards must be reinforced. Employee information used by AI systems should be encrypted, access-limited, and governed by clear retention and consent policies. Just as importantly, HR teams should be trained on how these technologies work and what risks they carry. A well-informed HR function is essential to keeping AI aligned with both company values and regulatory expectations.

3. Securing Data in a Remote Work Era

With hybrid and remote work here to stay, employee data now lives across more devices, platforms, and locations than ever before. At the same time, state-level privacy laws, some modeled after the General Data Protection Regulation (GDPR), are setting new standards for how organizations collect and store that data. 

For organizations, this means remote work policies can no longer be casual or cobbled together. A modern policy should clearly define the acceptable use of personal and corporate devices, outline secure communication practices, and spell out the protocols for accessing sensitive HR systems off-site. Equally important is employee education, so HR should lead regular training sessions on cybersecurity basics, like recognizing phishing attempts, using strong passwords, and securing shared documents. 

The goal is to embed secure habits into everyday employee behaviors, processes, and workflows. HR should also work closely with IT and compliance teams to vet external vendors handling employee data, ensuring those third parties meet internal and regulatory standards. Whether it is a payroll provider or a benefits platform, if they are compromised, your compliance is, too.

4. Bringing Anti-Corruption Compliance into the HR Fold

Anti-corruption may not sound like an HR issue at first glance, but increasingly, it is. Laws like the UK's new "Failure to Prevent Fraud" offense are holding companies accountable not just for violations but for the systems (or lack thereof) that allowed misconduct to happen.

HR has a critical role to play in operationalizing anti-corruption efforts. Training on ethics and compliance should begin at onboarding and be refreshed regularly. A culture of compliance also requires visible support for speak-up channels. That means not only ensuring hotlines are accessible and anonymous but also making it clear, through leadership and internal messaging, that retaliation will not be tolerated. 

Third-party risk is another key area. Recruiters, vendors, and consultants often operate in high-risk environments; HR must coordinate with compliance and procurement to make sure vendor onboarding and due diligence is not just a checkbox but a real assessment of reputational and legal exposure. 

The Year Ahead

HR compliance in 2025 is about much more than ticking regulatory boxes. It is about aligning people strategically with broader organizational risks—legal, ethical, and operational. For organizations ready to lead, not lag, now is the time to build compliance into the DNA of how people are hired, trained, managed, and empowered.

Parth Chanda is EVP, Risk and Compliance Transformation at Case IQ, and Founder and CEO of Lextegrity. Prior to Lextegrity, Parth served as the lead counsel for Pfizer’s global anti-corruption program office. In that role, he navigated its FCPA deferred prosecution agreement while overseeing a multi-year transformation of its anti-corruption and healthcare compliance program, from the redesign of procedures and third-party due diligence processes to financial systems integration, risk assessment and fraud analytics.