AlphaAdvisor Compliance Updates | May 2025

Welcome to the latest edition of AlphaStaff's Monthly Compliance Updates!

We are pleased to provide you with May's federal and state legal updates and highlighted resources provided by some of AlphaStaff’s trusted legal partners to guide and help keep you in compliance.

 

Federal Law Updates 

 

EEO-1 Reporting  

It’s that time of year again! The portal for the annual EEO-1 Component 1 report opened May 20, 2025. The deadline to file is Tuesday, June 24, 2025, at 11:00 PM EST.  

Updates to and Reminders of the Process: 

• Employers no longer have the option to voluntarily report non-binary data on the EEO-1.  

• Private employers subject to Title VII with 100 or more employees during an employer-selected pay period in the fourth quarter of the reporting year (workforce snapshot period) must submit and certify an annual EEO-1 Component I report that meets the required criteria to the EEOC. Note that both full-time and part-time employees count toward this threshold. 

• Additionally, federal prime contractors or subcontractors with 50 or more employees who meet certain other criteria must submit and certify the EEO-1 Component I report containing the required information to the EEOC. 

• Employers who meet the threshold for EEO-1 Component I reporting at any time during the fourth quarter of the reporting year cannot avoid the reporting requirement by selecting a workforce snapshot period from this quarter that is below the threshold to circumvent the filing obligation. 

• Note that “employee” refers to any individual on an employer’s payroll who is considered an employee for the employer’s withholding of Social Security taxes, except for insurance sales agents who are regarded as employees for such purposes solely due to the provisions of 26 USC 3121 (d)(3)(B) (the Internal Revenue Code). Leased employees are included in this definition. 

• See the 2024 EEO-1 Component I Data Collection Instruction Booklet for more information.  

• The EEOC collects workforce demographic data from local referral unions, state and local governments, and public elementary and secondary school systems and districts through other EEO data collections administered by the EEOC, not through the EEO-1 Component I report. 

Contact your AlphaStaff Human Resources Account Manager for more information regarding how AlphaStaff can assist your business with its EEO-1 Reporting. 

 

Worker Classification Rule Changes

The U.S. Department of Labor (DOL) has said it will no longer apply the 2024 workers classification rule’s analysis when determining whether a worker is an employee or independent contractor while it develops the “appropriate” independent contractor standard.  For now, the DOL will analyze employment status under longstanding Fact Sheet #13 and Opinion Letter FLSA2019-6.  

The 2024 final rule remains in effect for purposes of private litigation relating to independent contractor status, and businesses must comply with more restrictive state laws defining the independent contractor status in jurisdictions where they operate. Read more here. 

 

Gender Identity Guidance Changes

A federal judge in Texas struck down Biden-era Equal Employment Opportunity Commission (EEOC) guidance requiring accommodations for bathroom, dress, and pronoun preferences. 

Employers should:  

• Remember that Title VII prohibits employment discrimination based on protected characteristics and apply equally to all racial, ethnic, and national origin groups, as well as “both sexes.” 

• Review and comply with federal, state, and local anti-discrimination laws, understanding that some localities may still prohibit workplace discrimination based on sexual orientation and gender identity. 

 

Requirement of Comprehensive ADA Interactive Process

The EEOC recently issued a press release reminding employers that they should comprehensively evaluate an employee’s requested reasonable accommodation, which may require following up with third parties, such as a vocational counselor or the manufacturer of assistive systems and equipment. 

• Established ways of performing essential job functions may not always be an adequate defense against a failure to accommodate claim. 

• A meaningful exploration of the proposed accommodation may be required (especially relating to new technologies). 

Read more here. 

 

Abortion Accommodation Mandate Struck Down by Federal Court

A federal judge in Louisiana ruled that the EEOC should not have required employers to accommodate elective abortions that are not medically necessary. This order applies nationwide, despite lawsuits currently pending, unless a higher court rules otherwise. Read more here.  

 

OSHA Heat Hazard Program Extended

The Occupational Safety and Health Administration (OSHA) has extended its National Emphasis Program (NEP) on Outdoor and Indoor Heat-Related Hazards to April 6, 2026.  

• The extension allows OSHA to continue identifying and addressing heat-related injuries and illnesses in workplaces.  

• The NEP enforcement initiative targets industries and workplaces (both indoor and outdoor) where workers are at an increased risk of heat-related illnesses. 

• Employers should review their workplace safety programs and ensure they have a comprehensive heat illness prevention program in place. Click here for more information about considerations your Company should consider in the development of that program.  

 

Disparate Impact Case Deprioritization

The Trump Administration issued a new Executive Order on April 23, 2025, that shifts how the federal government approaches civil rights enforcement.  

• The Executive Order revokes former presidential actions approving of disparate impact liability (policies and practices that do not intentionally discriminate but have a ‘disparate impact’ on a protected characteristic). Employers can expect to see the EEOC and other federal agencies end enforcement activity related to disparate impact claims. 

• However, existing federal statutes or Supreme Court precedent remain unchanged. Discrimination based on protected characteristics remains unlawful.  

• Employees may still file disparate impact lawsuits under federal and state law, but now employers have another defense mechanism against such claims.  

 

NRLB Handbook Requirements Remain

With many business-friendly Executive Orders coming down the line, employers hope that the National Labor Relations Board will roll back the Stericycle standard. However, for now, that standard remains, and employers should take note.  

The Stericycle standard requires the NLRB General Counsel to prove that a challenged workplace rule has a reasonable tendency to discourage employees from exercising their rights. If so proven, the rule is then presumptively unlawful. However, the employer may prove that the rule advances a legitimate and substantial business interest and that the employer is unable to advance that interest with a more narrowly tailored rule. If the employer successfully proves its defense, then the work rule will be found lawful to maintain. Read more here. 

 

Updated DHS Alien Registration Requirements

The U.S. Department of Homeland Security (DHS) published an interim final rule, effective April 11, 2025, requiring certain non-citizens to register with the DHS. 

The updates/new requirements include:  

• a new General Registration Form and 

• a mandatory biometrics appointment where fingerprints, photographs, and signatures must be submitted. 

Additionally, those who must register include, but are not limited to:  

• all foreign nationals 14 years of age or older who were not registered and fingerprinted (if required) when applying for a visa to enter the United States and who remain in the United States for 30 days or longer.  

• Foreign nationals who are present in the United States without inspection and admission or inspection and parole.  

• Canadian visitors who entered the U.S. at land ports of entry and were not issued evidence of registration.  

Employers may consider taking certain steps immediately to ensure their hiring and compliance policies comply with this rule, including updating their I-9 training materials and protocols to ensure their HR leaders are accepting this valid proof of registration. Read here for more actions employers should consider.  

 

Temporary Protected Status for Venezuela Rescinded

On May 19, 2025, the U.S. Supreme Court ruled that the DHS may move forward with revoking Temporary Protected Status (TPS) for Venezuelans while legal challenges to the revocation continue. Protections for some Venezuelans remain until September (those subject to the 2021 TPS designation of Venezuela, which remains in effect until September 10, 2025); however, employers should monitor this situation closely and identify affected employees. Read about other steps employers should be taking here. Employers should consider working with immigration counsel to navigate this complex and fast-changing situation.  

 

State Law Updates

 

State Sick Leave Laws

This year, more states will enact paid sick leave laws, including Missouri, Alaska, and Nebraska. Read more about those three states’ laws below and here. Note that many states are also amending their existing paid sick leave laws.  

 

Alaska

Alaska’s sick and safe leave law goes into effect July 1 and:  

• requires employers to provide one hour of sick and safe leave for every 30 hours worked, with an annual accrual cap of 40 hours or 45 hours, depending on the total company employee headcount.  

• does not limit how many hours of paid sick leave can be carried over year-over-year.  

• does not expressly allow employers to frontload paid leave.  

 

Missouri

The Missouri Earned Paid Sick Time Law began on May 1, 2025. However, the Missouri legislature passed a bill on May 14, 2025, that repeals the paid sick time statute. If signed by the governor, the law will be repealed on August 28, 2025.   

• There will be a period of time – from May 1, 2025, to August 28, 2025 – during which Missouri employers must comply with the current Paid Sick Time law, as described below. Employers may consider implementing a temporary policy fulfilling these requirements (or how to use an existing PTO policy for short-term compliance, considering the fate of the paid sick time when the law is repealed). 

The Missouri Paid Sick Time Law (subject to HB-567, which will repeal the paid sick time statute if signed by the governor): 

• applies to all private employers with at least one employee in Missouri. For “small businesses” (less than 15 employees, including full-time, part-time, and temporary), there are reduced sick leave obligations.  

• requires accrual beginning May 1, 2025.  

• requires up to 80 hours of accrued, unused paid sick time must be carried over from year to year.  

• Missouri employers must have posted a Paid Sick Leave Law poster in the workplace as of April 15, 2025.  

 

Nebraska

Nebraska’s sick leave law goes into effect on October 1, 2025, and requires employers to provide one hour of sick leave for every 30 hours worked, with an annual accrual cap of 40 hours or 56 hours (depending on the total company employee headcount). There is no limit on how many hours of paid sick leave can be carried over each year. This law is currently being challenged, and AlphaStaff will continue to monitor updates.  

 

State Data Privacy Laws

This year, eight additional states are enacting privacy laws, making the patchwork of existing data privacy laws even more complex for companies to navigate. Employers in the following states should ensure their data privacy practices comply with their state’s new legal requirements: Delaware, Iowa, Maryland, Minnesota, Nebraska, New Hampshire, New Jersey, and Tennessee. Read more about those requirements here. 

Additionally, states are passing laws to fill in healthcare data privacy gaps that HIPAA may not cover in certain areas of concern, such as reproductive health information. Read here for information regarding laws passed in this vein in Washington, Nevada, Virginia and New York.  

 

State Restrictive Covenant Agreement Laws 

 

Colorado

Colorado passed a bill relating to restrictive covenant agreements that is expected to be signed into law on August 6, 2025, and prohibits businesses from entering into restrictive covenant agreements (such as non-competition and customer non-solicitation agreements) with certain healthcare workers. The bill also modifies the current exemption allowing such restrictive covenants in connection with the sale of a business. While unanswered questions remain about the law, businesses can read more about its nuances here. 

 

Florida

The Florida legislature passed the employer-friendly Restrictive Covenant Bill, which permits two new forms of allowed noncompete provisions under Florida law which, if enacted, will become effective July 1, 2025.  

• The new provisions include a Covered Garden Leave provision and a noncompete provision that can last up to four years, which goes above and beyond current Florida non-compete law. A Covered Garden Leave provision allows an employer to retain an employee or contractor during a post-employment “notice period,” during which the employer continues to pay the employee’s salary and benefits while the employee sits out of work, restricting the employee form engaging in competitive employment. In this law the “notice period” can also last up to four years. 

 

• Both provisions would be enforceable through injunctive and other relief.  

 

Kansas 

• Kansas passed a law that deems certain agreements in writing prohibiting the solicitation of customers or employees to be conclusively presumed to be enforceable.  Read more about those types of agreements and other requirements here.  

 

Other State Laws

 

California

On April 21, 2025, the California Court of Appeals concluded that revocable, prospective, “blanket” meal period waivers are enforceable in the absence of any evidence that the waivers are unconscionable or unduly coercive to the employee.  

• California employers may provide prospective “blanket” meal period waivers to their employees, provided that:  

• such waivers may be revoked by the employee at any time; and  

• there are no “procedural” red flags with the waivers, such as pressuring employees to sign, burying the waivers within other documents such that the employees may not know what they are signing, or refusing to allow or accept revocations of the meal period waivers.  

Read more about the law here.  

 

New Hampshire

Effective July 1, 2025, New Hampshire employers with at least six employees in the state must provide nursing employees with 30-minute unpaid breaks for every three hours worked to express milk. Employers must provide nursing employees with a private, non-bathroom space in the workplace to pump for one year after the birth of a child. Read more here. 

 

New Jersey

Even with employer-friendly enforcement at the federal level, New Jersey continues to enforce its strict independent contractor classification test. While classifying workers as contractors will not get easier, New Jersey did issue guidance regarding how the agency interprets its independent contractor relationship test so that now, at least, it will provide much-needed guidance.  

 

New York - Sunsetting of Covid-19 Paid Emergency Leave

Beginning July 31, 2025, New York employers will no longer be required to provide separate leave for COVID-19 quarantines and isolations. 

 

Washington

Washington is likely to enact a “mini-WARN Act” requiring employers with fifty or more employees to provide at least 60 days’ notice before business closures or mass reductions in force. Read more here. 

 

This information should not be relied upon as legal advice.