Reading The Rapids: Navigating The Turbulent Waters Of Regulation

Why proactive, agile compliance strategies are critical for HR survival and success in 2025

The waters can be choppy and unpredictable for human resources professionals navigating today’s regulatory landscape. The streams constantly churn with new laws, agency rulings, court decisions, and shifting enforcement priorities that affect the workforce. These conditions present mounting challenges—and the stakes could not be higher.

Staying compliant in this dynamic environment is a strategic imperative. A reactive approach to compliance is insufficient; human resources (HR) leaders must read the waters ahead. Failure to adopt proactive, agile strategies carries significant risks: steep financial penalties, lasting harm to an organization’s reputation and brand, and the ever-present threat of costly and disruptive litigation.

This article explores the evolving landscape, highlights relevant compliance trends, and outlines strategies for HR professionals to safely navigate the turbulent waters of regulation.

A Changing and Increasingly Complex Landscape

Technological advancements, new political administrations, and shifting societal expectations are three interconnected forces responsible for the ever-changing landscape.

Technology innovations: The rapid integration of artificial intelligence (AI) into recruitment and performance management is prompting new state-level regulations, requiring bias audits, impact assessments, and notifications when AI makes employment decisions. Innovations in technology also trigger heightened concerns about employee privacy, fueling the need for stricter data protection laws. 

Changes in administration: Elections and attendant changes in leadership bring shifts in regulatory philosophy and enforcement priorities. The political party in power shapes the legislative agenda and impacts the composition of the judiciary. Over time, shifts in the judiciary can lead to new interpretations of existing statutes and regulations. 

Case in point: the U.S. Supreme Court's 2024 decision in Loper Bright Enterprises v. Raimondo overturned the Chevron doctrine, ending the decades-long practice requiring courts to defer to federal agencies' reasonable interpretations of ambiguous laws they administer. This ruling empowers courts to resolve ambiguity and apply their own interpretations, potentially changing the meaning and application of numerous existing statutes across various regulatory areas. In a word, it means more uncertainty. 

Societal expectations: Public attitudes and social movements also shape the demand for new regulations. As norms evolve, pressure mounts on lawmakers and organizations to address perceived injustices or emerging concerns, such as diversity, equity, and inclusion (DEI) programs and pay equity and transparency.

A complex environment: HR compliance is increasingly complex. Lawmakers at all levels are introducing and enacting employment-related legislation more rapidly than ever. What was compliant yesterday might be illegal tomorrow. 

The rise of state and local regulations creates a complex web for multi-state employers. Maintaining consistency while adhering to varying, sometimes conflicting, requirements is a significant burden. Remote and hybrid work models bring challenges related to multi-state taxation, wage and hour laws for dispersed teams, and ensuring equitable experiences and compliance across different work locations. 

Scanning the Horizon

Staying afloat requires HR professionals to focus on the areas undergoing the most significant shifts. 

Here are some key compliance trends on the horizon:
 

• The Rise of AI Regulation in HR: Colorado's landmark AI Act (effective Feb. 1, 2026) is considered the first comprehensive state-level AI regulation framework in the U.S. It protects against algorithmic discrimination in “high-risk” AI systems for consequential employment decisions. A new Illinois law, also effective in 2026, requires employers to notify employees when AI is used for certain employment decisions. Proposed legislation in California is also taking shape.

 

• Expanding Pay Transparency Mandates: The movement demanding greater transparency around compensation continues to gain momentum. Many states have enacted compensation transparency laws (California, Colorado, Connecticut, Hawaii, Maryland, Massachusetts, Minnesota, New Jersey, Nevada, New York, Rhode Island, Vermont, Washington, and the District of Columbia). These laws generally require employers (often above a certain size threshold) to include salary ranges in job postings. Some also require disclosure upon request or during promotion/transfer discussions. 

 

• Navigating Remote and Hybrid Work Compliance: This remains a significant pain point for employers. Key challenges include: tracking employee work locations accurately for tax withholding purposes; complying with varying state/local wage and hour laws; managing state-specific paid leave laws; securing data on home networks and personal devices; and potentially registering to do business and paying unemployment taxes in multiple states.

 

• Employee Data Privacy and Cybersecurity: HR departments are prime targets for cyberattacks and are subject to increasingly strict privacy regulations. Amendments to the California Privacy Rights Act extend enhanced privacy rights to employee data, and more states are likely to follow suit. Increased scrutiny on how employee data is collected, used, stored, and protected, especially data used by AI tools, is expected. 

 

• Paid Leave Expansion: Mandated paid sick leave and paid family/medical leave continue to expand at the state and local levels. New or expanded paid sick or family leave laws are rolling out in Alaska, Connecticut, Michigan, Minnesota, Missouri, Nebraska, New York, and Washington. 

 

• Wage & Hour Vigilance: Ensuring proper payment for all hours worked, correct overtime calculations, and accurate employee classification remains a high-risk area. Minimum wage rates continue to increase in many states and localities. The distinction between exempt and non-exempt employees requires careful analysis under FLSA and state law criteria. Misclassification of independent contractors remains a significant risk.

Reading the Rapids

Navigating this complexity requires a strategic, integrated approach. HR professionals should consider the following strategies:
 

• Exchange rigid, one-size-fits-all policies for agile ones. Design handbooks and procedures that acknowledge jurisdictional differences. Build processes for regular policy review and updates in response to legislative changes.

 

• Leverage technology to your advantage. Invest in tools to automate tracking of multi-state laws, manage documentation, streamline reporting, monitor deadlines, and ensure policy consistency. Look for solutions that offer configurability for different jurisdictions. 

 

• Train your people. The law changes constantly. Invest in ongoing training for HR staff and management-level employees. Instead of cramming it all into an annual check-the-box training, consider microlearning—short, frequent, digestible, and memorable. Track and document this training.

 

• Establish a risk management framework. Do not wait for a government agency to find problems. Conduct periodic audits of key compliance areas (I-9s, wage and hour practices, policy handbooks, pay equity, data security, and AI tools, for example). Leverage data analytics to identify potential weaknesses and areas prone to risks.

 

• Rely on the experts. Develop a relationship with experienced counsel who can help you interpret new laws, draft compliant policies, navigate complex situations, and defend against claims. Legal counsel is not just for emergencies; use them proactively.

 

• Foster a Culture of Compliance. Embed ethical conduct and compliance into the company culture, starting from the top. Communicate the importance of compliance clearly and regularly. Establish clear reporting channels for concerns and ensure prompt, thorough investigations.

Compliance as a Strategic Advantage

HR compliance is not a calm, passive float downstream. It is an active paddle requiring HR leaders to be highly skilled, observant, forward-looking, and agile to successfully navigate the turbulent and ever-changing waters of regulation.

The regulatory landscape for HR will undoubtedly continue to shift and grow more complex. Viewing compliance not as a burden but as a strategic function is key. A single instance of non-compliance is often enough to damage an organization’s reputation. Companies that prioritize proactive compliance, invest in the right resources and expertise, and foster a culture of ethical conduct will be better positioned to mitigate risks, build trust with employees, enhance their reputation, and, ultimately, gain a competitive advantage. Staying informed, agile, and vigilant is not just a best practice—it is essential for survival and success in 2025 and beyond.

Kristin B. Johnson is an attorney at the Virginia-based law firm Woods Rogers. She counsels businesses involved in government investigations and crisis management.