Welcome to ModHR’s March 2025 Employment Update! Each month, we bring you the latest changes in employment law and how they might impact your business. Let’s dive into what’s new at the federal and state levels, along with some key updates to our resources.
Legal Updates
The Corporate Transparency Act No Longer Enforceable
On February 18, 2025, the U.S. District Court for the Eastern District of Texas reinstated the beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA), with a compliance deadline of March 21, 2025. However, just weeks later, the Treasury Department announced on March 2 that they will not enforce any penalties or fines related to the BOI reporting rule—either under the current deadlines or after future changes take effect.
What does this mean for businesses? U.S. companies are no longer required to follow the CTA’s reporting requirements. However, foreign businesses should continue to prepare for compliance once updated rules are released.
Department of Education Targets DEI Policies
On February 14, 2025, Craig Trainor, Acting Assistant Secretary for Civil Rights in the Department of Education, issued a "Dear Colleague" letter stating that many educational institutions have promoted a false premise of "systemic and structural racism" and advanced discriminatory policies under the guise of diversity, equity, and inclusion (DEI). The letter claims that DEI efforts are illegal and advises institutions to:
Ensure their policies comply with civil rights law
Cease using race-based hiring practices, including indirect methods
Stop working with third-party DEI consultants or clearinghouses that facilitate race-based hiring
Educational institutions should carefully review their DEI policies to ensure compliance with existing laws.
DOJ to Investigate Private Sector DEI Practices
On February 5, 2025, U.S. Attorney General Pam Bondi directed the Civil Rights Division to recommend ways to eliminate DEI policies among private employers receiving federal funds. While this raises concerns about heightened scrutiny, a footnote in the directive clarifies that enforcement will focus only on practices that discriminate based on race or sex. Practices that promote awareness or celebrate diversity without exclusion remain lawful. Employers should review their DEI programs to ensure compliance with this evolving legal landscape.
Federal Court Blocks Trump’s Anti-DEI Executive Order
In response to Executive Order 14173, which aimed to restrict DEI practices, the National Association of Diversity Officers in Higher Education filed a lawsuit. On February 21, 2025, a federal judge issued a preliminary injunction halting enforcement of the order. Until further notice, DEI initiatives remain legal and enforceable under existing regulations.
NLRB Rescinds Pro-Labor Memos
On February 14, 2025, the National Labor Relations Board (NLRB) Acting General Counsel rescinded several pro-labor memoranda issued under the Biden administration. These memos had provided protections against non-compete agreements and expanded worker rights. Their rescission signals a shift toward a more employer-friendly stance on non-compete agreements and other labor policies.
State-Specific Updates
D.C.: Non-Compete Wage Threshold Increased
Washington D.C. raised its salary threshold for enforceable non-compete agreements:
General employees: $154,200 → $158,364
Medical specialists: $257,000 → $263,939
Employees earning below these thresholds cannot be subject to non-compete agreements.
Florida & Idaho: E-Verify Expansion Bills Introduced
Both Florida and Idaho introduced bills that would require all employers—not just those with 25+ employees—to use the federal E-Verify system to confirm new hires' work eligibility. No further legislative action has been taken yet.
Michigan: Minimum Wage & Sick Leave Updates
Michigan’s minimum wage and sick leave laws saw last-minute legislative changes before their scheduled implementation on February 21, 2025. Review Six-Fifty's special update for more information.
Missouri: New Sick Leave Notice Requirements
As part of Proposition A, Missouri employers must provide written notice to employees about paid sick leave policies by April 15, 2025, and display an official poster in the workplace. The Department of Labor has not yet released a model notice or poster, so stay tuned for updates.
Missouri: Kansas City Adds Criminal History Protections
Kansas City has added criminal history as a protected characteristic, preventing hiring discrimination based on past convictions. While this law explicitly applies to city government positions, its implications for private employers remain unclear. To avoid potential risks, private employers may want to eliminate criminal history inquiries from hiring decisions.
New York: Retail Worker Safety Act Delayed
Originally set to take effect in March, New York’s Retail Worker Safety Act has been postponed to June 2, 2025. Employers with at least 10 retail workers must develop a workplace violence prevention plan and training. Larger employers (500+ retail workers) will also need to provide panic buttons for immediate emergency response starting in 2027.
North Carolina: Proposed Small Business Retirement Plan
A new bill would require small businesses to help employees contribute to a voluntary state-managed retirement plan through payroll deductions. Employers would not need to contribute. The bill is still under review.
Ohio: Pay Stub Transparency & Proposed Non-Compete Ban
Starting April 9, 2025, Ohio employers must include additional details on pay stubs, including total wages, deductions, hours worked (for hourly employees), and employer information.
Additionally, Ohio legislators have introduced SB 11, a bill that would ban post-employment non-competes statewide. No further action has been taken yet.
Rhode Island: Updated Veterans Benefits Poster
Rhode Island has published a new veterans benefits poster, which employers must now display.
Texas: Ban-The-Box Legislation Introduced
A new bill would prohibit Texas employers from asking about criminal history on job applications until after an interview has been scheduled. No legislative action has been taken yet.
Washington: Restrictions on Anti-Moonlighting Agreements
Washington employers can no longer enforce anti-moonlighting agreements against employees earning less than $33.32/hour unless necessary to protect legitimate business interests. A recent state Supreme Court decision clarifies that these restrictions must be narrowly applied.
Final Thoughts
At ModHR, we’re committed to keeping you informed about the latest legal changes so you can stay compliant and ahead of the curve.
Have questions about how these updates affect your business? Reach out to our team—we’re here to help!
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