Home » US Labor & Employment: 2025 Legislative Update – Part Three

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US Labor & Employment: 2025 Legislative Update – Part Three

This blog was originally posted on 27th January, 2026. Further regulatory developments may have occurred after publication. To keep up-to-date with the latest compliance news, sign up to our newsletter.

AUTHORED BY CORINE LAURIJSEN, SENIOR REGULATORY COMPLIANCE SPECIALIST, COMPLIANCE & RISKS

Every year, hundreds of Labor & Employment related bills are proposed in the US at Federal and State level. And every year, only a small percentage makes it to the finish line.

This third blog provides an overview of labor & employment laws that were enacted in the United States during Q3 of 2025.

The US Congress introduced and debated several labor and employment bills in 2025, but as none have been enacted so far, this overview focuses on US state laws only.

This blog follows Legislative Updates Part 1 and Part 2, which were published in September and October 2025, respectively. They discussed new state laws enacted earlier in the year.

Where Were Changes Made to Pay Data Reporting?

California

Senate Bill 464, signed into law on October 13, 2025, made significant changes to the state’s pay data reporting requirements for covered employers and labor contractors with 100 or more employees, effective in 2026 and 2027. The amendment entered into force on January 1, 2026.

Effective January 1, 2026:

Courts must impose civil penalties when requested by the California Civil Rights Department (CRD) for failure to file required pay data reports. The penalty is $100 per employee for the first failure and $200 per employee for subsequent failures. This removes judicial discretion in imposing penalties.
Employers and labor contractors must collect and store any demographic information used for California pay reporting separately from employees’ personnel records.

Effective January 1, 2027:

Pay data reporting will no longer use the ten EEO-1 categories for employee classification. Instead, employers must classify all employees into one of twenty-three job categories based on the Standard Occupational Classification (SOC) system. This substantial shift will first affect the 2026 pay reports, which are due on or before May 12, 2027.

In summary, SB 464 increases the pressure on covered entities to file accurate and timely reports by making penalties mandatory and significantly increases the complexity of the reporting process by introducing the new SOC-based job categories.

Where Was Pay Transparency Increased?

California

On October 8, 2025, the California Governor enacted Senate Bill 642, which amends Labor Code Sections 432.3 and 1197.5 to strengthen wage transparency and equal pay enforcement. The main amendments are:

Definition of “pay scale” to mean a “good faith estimate” of the salary or hourly wage range the employer reasonably expects to pay for the position upon hire.
Strengthening of the equal pay law by prohibiting employers from paying employees less than the rates paid to employees of “another sex” (replacing the less inclusive “opposite sex”) for substantially similar work. Protections based on race or ethnicity remain.
Requiring a civil action to recover wages to be commenced no later than 3 years after the last date the cause of action occurs. An employee is entitled to obtain relief for the entire period of time in which a violation of its provisions exists, but not to exceed 6 years.
Specifying that a cause of action occurs when an alleged unlawful compensation decision or practice is adopted, when an individual becomes subject to the decision or practice, or when an individual is affected by the application of the decision or practice.
Provisions do not prohibit the application of the prescribed legal doctrine.
Definition of “wages” and “wage rates” is broadly applied to include all forms of pay, such as salary, bonuses, stock, stock options, profit sharing, and various benefits.

The amendments entered into force on January 1, 2026.

Delaware

HB 105 was enacted to promote transparency in pay and compensation in job opportunities, empowering workers and encouraging fair compensation practices. The provisions apply to Delaware-based jobs or non-international remote positions, and require that employers with more than 25 employees:

Include salary or wage range information for internally and externally employees in all postings, to provide the pay range (hourly or salary), benefits, and other compensation, before any offer or discussion of compensation, or upon applicant request;
Maintain records relating to job descriptions and wage rates for current employees, and for 3 years after the end of employment;
Provide records to the Department of Labor upon request.

Additionally, there will be job types with adjusted provisions, such as commission-based jobs. Employers are not required to disclose candidate identities if doing so violates privacy, health, or safety laws.

This Law stipulates that if a job opportunity is covered by a collective bargaining agreement (CBA), the compensation range disclosed in a notification should be the one agreed upon in the CBA itself. The pay transparency provision becomes applicable only when the CBA is amended, modified, or renewed after the effective date of the Act. Also, employers are not liable for digitally replicated job postings without their consent.

Nevada

On November 20, 2025, Senate Bill 8 was enacted and entered into force. It aligns the Nevada employment statute with federal labor laws regarding employee pay. The amending law requires the following:

Employers may exclude payment for work hours when they are excluded by sections 2 and 4 of the federal Portal-to-Portal Act (1947) and also in the federal Fair Labor Standards Act (1938).
An employer cannot require an employee to work without pay while they are putting on/removing a uniform or personal protective equipment (PPE) when employees are prohibited from taking these items off work premises.
Computing overtime is based on the regular pay rate under the Fair Labor Standards Act of 1938.

The Amendments to sections 1 (additional exclusions and exceptions) and 2 (computing overtime) of NRS 608 apply to compensation actions that are pending or occurring on or after the Act’s taking effect. Section 1 of this act expires by limitation on 31 October 2029.

Where Have New Employee Protections Been Enacted?

California

On October 1, 2025, Assembly Bill 406 was enacted. It expands the Act on elimination of unlawful employment practices regarding jury, court, and victim time off work (AB 2499, enacted in 2024).

AB 406 adds a new reason for which protected time off can be taken, prohibiting employers from discharging or taking other action against an employee who is a victim or a family member of a victim for taking time off to attend judicial proceedings related to that crime. For purposes of this new provision only, the new law creates a different definition of “victim” which includes being subjected to one of 14 different crimes enumerated by Government Code section 12945.8(j)(8)(c).

The law also revises employee notice requirements under California’s jury duty law, requiring reasonable “advance” notice to the employer, unless the “advance notice is not feasible.”

Passed as an urgency measure, AB 406’s jury duty notice changes took effect immediately, with the entitlement to time off for the additional reason going into effect on January 1, 2026.

Illinois

Enacted Senate Bill 2339 significantly updates the Right to Privacy in the Workplace Act to protect employees from adverse actions due to minor documentation discrepancies with federal systems like E-Verify, requiring employers to provide time for corrections and strengthening employee rights. The new law took effect on December 12, 2025.

New York

AB 584, known as the “Trapped at Work Act,” was enacted into law on December 19, 2025, and bans “stay-or-pay” contracts that force workers to repay employer costs if they leave early, thus preventing exploitative clauses. This law makes such employment promissory notes unenforceable, protecting employees, independent contractors, interns, and volunteers.

Enacted Senate Bill 3072 bans most employers from using applicants’ or employees’ credit history (like credit reports or scores) in hiring, promotion, or other employment decisions, effective April 18, 2026. It aligns with New York City’s existing law and creates statewide restrictions, with narrow exceptions for specific roles like law enforcement or those handling large sums of money.

Senate Bill 3398, the Reasonable Accommodation Anti-Retaliation Act, was enacted in late 2025, clarifying that employers cannot retaliate against workers for requesting a reasonable accommodation for pregnancy, disability, or religion under the New York State Human Rights Law (NYSHRL). It took effect on December 5, 2025.

Pennsylvania

House Bill 439, known as the CROWN Act (Creating a Respectful and Open World for Natural Hair Act), was enacted on November 25, 2025, making hair discrimination illegal in Pennsylvania by amending the Pennsylvania Human Relations Act (PHRA) to explicitly ban bias based on hair texture, styles, and protective hairstyles like braids, locs, and twists. The law, effective January 24, 2026, prohibits discrimination in workplaces, schools, and public accommodations, adding these traits to the definition of race and religious creed.

Explore 2025 developments in US product compliance with our webinar US Product Compliance 2025: Key Federal & State Changes to Watch.

Conclusion and Looking Ahead

This blog and the earlier published labor & employment updates show that even though many labor and employment bills were proposed in the US, only a relatively small number were enacted in 2025, and only at the state level. Major themes included child labor, discrimination protection, employer & employee rights, labor definitions, paid & unpaid leave, non-compete agreements, and wage provisions.

What Can We Expect in 2026?

We will again see significant US labor law changes, primarily at the state level. The focus will follow on from 2025:

Artificial Intelligence in employment;
Expanding wage transparency and pay equity;
New and updated paid family and sick leave laws;
Increased workplace privacy regulations (especially around AI/data); and
Stronger enforcement against non-compete agreements.

And, most likely, California, Illinois, and New York will lead the way in many of these state-level updates.

Want to stay ahead of these US sustainability regulatory developments? Watch our expert webinar, ESG Regulatory Developments in the US, on demand now!

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