HCM Year-End Review

Paylocity wants to help you stay ahead of new laws and requirements that will become effective in 2025. We’ve compiled a list outlining what you can expect from January 1, 2025, through June 30, 2025.

Federal

2025 Plan Limits for FSAs and Other Plans

Effective plan years starting on or after January 1, 2025:

• Click here for more information on Health Saving Accounts, High Deductible Health Plans, and Excepted Benefit HRAs.
• Click here for more information on Transportation limits, Medical Savings Accounts, and additional information for High Deductible Health Plans (HDHPs).
• For more information, see PEAK knowledge base articles:  
  • Health Savings Account Limits  
  • 2025 Health FSA and Other Limits Announced  

California

California Paid Sick Leave Amendments

Effective January 1, 2025:

• SB 1105 will require employers of agricultural employees who work outside to provide paid sick leave so these employees can avoid smoke, heat, or flooding conditions determined by a local or state emergency proclaimed by the governor or local authority.
  • AB 2499 allows for a covered employee to use “safe” leave for when an employee’s family member is a victim of a crime. Additionally, victim status will extend to any “qualifying act of violence” as defined in California Government Code Section 12945.8. This expands the acceptable uses for an employee to use paid sick leave for “safe” time.

For more information, see PEAK knowledge base article, 2024 California Legislative Update.

Paid Family Leave Amendments

Effective January 1, 2025:

• AB 2123 eliminates an employer’s ability to require employees to use up to two weeks of company-provided vacation before they start receiving paid family leave insurance benefits.

For more information, see PEAK knowledge base article, 2024 California Legislative Update

Driver’s License Discrimination Act

Effective January 1, 2025

• SB 1100 prohibits statements about needing a driver’s license in job advertisements, postings, applications, and similar employment material. Under the law, an employer may not include a statement that an applicant must have a driver’s license unless the following conditions are satisfied:
  • The employer reasonably expects driving to be one of the position’s job functions.
  • The employer reasonably believes that using an alternative form of transportation would not be comparable in travel time or cost to the employer.

For more information, see PEAK knowledge base article, 2024 California Legislative Update.

Freelance Worker Protection Act (FWPA)

Effective January 1, 2025: 

• SB 988 creates protections for freelance workers, with penalties for non-compliance and anti-retaliation provisions.
• The FWPA requires that covered workers receive payment on or before the contract's deadline.

For more information, see PEAK knowledge base article: 2024 California Legislative Update

Intersectional Discrimination

Effective January 1, 2025

• SB 1137 amends the California Fair Employment and Housing Act to prohibit employment discrimination based on intersectionality (or the combination) of two or more protected characteristics.

For more information, see PEAK knowledge base article: 2024 California Legislative Update

Employee Harassment: Temporary Restraining Order

Effective January 1, 2025

• SB 482 authorizes any employer whose employee suffered harassment within the workplace to seek a temporary restraining order and an injunction on behalf of that employee and other employees.

Connecticut

Paid Sick Leave Amendments

Effective January 1, 2025

• HB 5005 greatly expands the state’s Paid Sick Leave law. The amendments range from coverage to accrual rate requirements to acceptable uses of leave.

For more information, review the PEAK knowledge base article, Connecticut Paid Sick Leave Amendments.

Illinois

Wage Statement Amendments

Effective January 1, 2025:

• SB 3208 requires Illinois employers to provide an itemized wage statement to their employees per pay period.
• Employers must maintain copies of the employee pay stubs for at least three years after the payment date.

For more information, see PEAK knowledge base article, 2024 Illinois Legislative Update.

Personnel Records Review Act Amendments

Effective January 1, 2025:

• HB 3763 imposes new requirements on employers navigating personnel records requests.

For more information, see PEAK knowledge base article: 2024 Illinois Legislative Update.

Human Rights Act Amendments

Effective January 1, 2025:

• HB 3773 amends the Human Rights Act to address an employer’s use of artificial intelligence (AI).
• HB2161 prohibits employers from taking adverse actions against an employee or prospective employee based on the employee’s family responsibilities.
• HB4867 prohibits employers from unlawfully discriminating against an employee for actual or perceived reproductive health and welfare decisions.

For more information, see PEAK knowledge base article, 2024 Illinois Legislative Update.

Right to Privacy in the Workplace Act Amendments

Effective January 1, 2025:

• The Illinois Right to Privacy in the Workplace Act prevents employers from imposing work authorization verification requirements greater than those required by federal law under the E-Verify program.

For more information, see PEAK knowledge base article, 2024 Illinois Legislative Update.

Massachusetts

Paid Sick Leave Acceptable Use Expansion

Effective November 21, 2024:

• The Massachusetts legislature expanded the reasons for which eligible employees may use available earned sick time under the Commonwealth’s Earned Sick Time Law.
• The amended law allows the use of sick time for a pregnancy loss, unsuccessful assisted reproduction, such as in vitro fertilization (IVF), or a failed adoption or surrogacy.

Pay Data Reporting

Effective February 1, 2025:

• Employers, subject to Equal Employment Opportunity (EEO) pay data reporting, with 100 or more employees during the prior calendar year, are must submit a pay data report to the state by February 1 of each year. 
• The state secretary will establish a web portal to allow for the submission of wage data reports by required employers.

Pay Transparency

Effective July 31, 2025:

• Employers with 25 or more employees working in Massachusetts must include the pay range for a position on all job postings.
• Employers must disclose the pay range for a position to existing employees who receive a promotion or a transfer to a new position with different responsibilities.
• Employers must provide pay range information for a particular position to an employee who holds the position or to an applicant upon receipt of a request.

Michigan

Earned Sick Time Act Reinstatement (ESTA)

Effective February 21, 2025:

• The ESTA applies to all Michigan employers with at least one employee, except for the federal government.  
• Small employers with fewer than ten employees must provide up to 40 paid sick leave hours and 32 unpaid sick leave hours per year.
• Large employers with ten or more employees must annually provide 72 hours of earned sick leave.

For more information, review the PEAK knowledge base article, Michigan Earned Sick Leave and Minimum Wage.

Minnesota

Pay Transparency

Effective January 1, 2025:

• Employers with 30 or more employees working in Minnesota must disclose the starting salary range and a general description of benefits and other compensation in each posting for each job opening.
• An employer that doesn’t provide a salary range for a position must list a fixed pay rate.

Missouri

Paid Sick Leave 

Effective May 1, 2025:

• Employees will be eligible for one hour of paid sick leave for every 30 hours worked.
• Employers with 15 or more employees must annually provide 56 hours of paid sick leave. Employers with 14 or fewer employees must annually provide 40 hours of paid sick leave.

New York

Prenatal Leave

Effective January 1, 2025:

• All employers in New York required to provide paid sick and safe leave must now provide 20 hours of paid prenatal leave for each 12-month benefit period.
• Employees may take leave in hourly increments during pregnancy-related medical appointments, procedures, tests, and discussions with healthcare providers.

For more information, see PEAK knowledge base article, New York Budget Bill Employment Laws.

Retail Worker Safety Act

Effective March 3, 2025

• Employers must adopt and provide all employees with a written workplace violence prevention policy and conduct workplace violence prevention training upon hire and annually thereafter. The Department of Labor offers a model training program.

For more information, review the PEAK knowledge base article, New York Retail Worker Safety Act.

Washington

Paid Sick Leave Amendments

Effective January 1, 2025

• SB 5793 amends the paid sick leave law by allowing an employee to take paid leave when the employee’s child’s school closes for a health-related reason or due to weather or a public emergency.
• The bill also further defines “family member,” under the law.

For more information on the 2024 Mid-Year Alert, please click here or see PCTY-137472.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change, and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney, or Advisor.