The New Rules of Work: How Recent Policy Changes Impact Operations
In less than nine months, the new administration has changed more than six decades of labor and employment policy. That’s the conclusion of Littler’s Workplace Policy Institute as detailed in its 2025 Labor Day Report. Journalist Ginger Christ highlighted these findings in her HR Dive article, “6 labor and employment issues that are in flux, according to law firm Littler.”
The message is clear: labor and employment policy changes are happening at a speed we’ve never seen before. These developments impact organizations across every industry, from healthcare and retail to logistics and technology. While the implications of these six changes may vary by industry, the underlying theme remains the same: compliance, workforce planning, and employee relations are more complex than ever.
Independent Agencies Under Pressure
Federal “independent” agencies, such as the Equal Employment Opportunity Commission (EEOC) and National Labor Relations Board (NLRB), are encountering new hurdles. Shortly after taking office, the administration dismissed several agency leaders, leaving these organizations without a quorum and hampering their ability to function effectively.
Ongoing lawsuits are now questioning whether the president has the authority to remove officials from independent agencies. If courts uphold the removals, we might see these agencies shift from being neutral overseers to entities that align more closely with presidential agendas.
For employers, this uncertainty means enforcement could be inconsistent. Businesses should maintain compliance with anti-discrimination and workplace conduct rules, even during periods of limited enforcement. A warehouse or retailer might not see immediate oversight, but sudden shifts can occur once leadership changes.
Overtime Rules and Worker Classification in Flux
Changes to overtime pay and worker classification are among the most impactful labor and employment policy changes for employers. The Biden administration’s 2024 overtime rule, which aimed to increase salary thresholds for overtime exemptions, was struck down by the court. Now, the Department of Labor is reviewing its next steps. At the same time, federal regulators appear open to loosening classification standards to make it easier to label workers as independent contractors.
This situation creates confusion in payroll planning. For instance, a healthcare provider with long shifts might see rising costs if more of their staff become eligible for overtime. A tech startup that relies on contractors could suddenly find itself needing to reclassify its workers. Even in warehouses, misclassifying supervisors or gig workers can lead to lawsuits and hefty back-pay penalties.
The safest approach is to audit pay practices and classifications. By staying ahead of these changes, companies can avoid expensive surprises down the line.
Declining Union Membership Meets Expanding Worker Protections
While union membership is on the decline, worker protections are expanding in many states. Thirteen states so far have banned “captive audience” meetings, which limit employers’ ability to hold mandatory anti-union sessions. Meanwhile, federal lawmakers are considering the Faster Labor Contracts Act, which could expedite negotiations and give unions greater leverage.
For employers, the takeaway is clear: the legal landscape may not favor management as strongly as in the past. Even as union density falls, worker rights are expanding in ways that make organizing easier. Industries with high turnover, such as logistics or warehousing, are particularly vulnerable to union campaigns when employee dissatisfaction runs high.
The best defense is not resistance, but engagement. Employers who provide fair wages, transparent scheduling, and strong communication can reduce turnover and make employees feel valued. These actions lower the likelihood of union activity while improving morale.
Diversity, Equity, and Inclusion Under Scrutiny
The administration has instructed agencies to roll back diversity, equity, and inclusion (DEI) programs. Many employees, customers, and state governments still expect businesses to uphold inclusive practices.
Companies are now in a tough position. Abandoning DEI efforts could harm recruitment and retention. On the flip side, maintaining these programs without careful review could invite legal scrutiny. Businesses in retail, healthcare, and warehousing often rely on diverse workforces and cannot afford to lose ground on employee engagement.
Employers need to tackle DEI with openness, aiming for fair outcomes while regularly checking that their policies comply with the law. Striking a balance between inclusion and the shifting legal landscape will be essential as we move into 2026.
Immigration Enforcement Tightens
Immigration enforcement has become a priority for the administration. Employers should brace themselves for more I-9 audits, stricter interpretations of documentation rules, and potential workplace inspections.
Industries that heavily depend on immigrant labor, like construction, agriculture, hospitality, and logistics, are feeling the effects. A warehouse may face delays in onboarding temporary workers, while a hospital could struggle to staff specific roles.
Employers should use this period to strengthen their compliance practices. That means auditing I-9 files, training HR teams on proper verification procedures, and preparing contingency plans in case labor availability tightens further.
Artificial Intelligence Regulation Remains a Patchwork
AI is shaking things up in the workplace, but regulatory frameworks are inconsistent. The administration favors deregulation, while states and cities are passing their own rules around algorithmic bias, worker surveillance, and transparency.
Challenges are arising for businesses that use AI in hiring, scheduling, or performance management. A company could be compliant in one state but find itself in hot water in another. For instance, warehouses that utilize AI for scheduling must be cautious to ensure their systems don’t unintentionally disadvantage certain employee groups.
The answer isn’t to shy away from AI; it’s to treat its governance as a living process. Policies should be reviewed and updated regularly, with input from legal, HR, and operational leaders. Equally important is involving employees in these discussions to foster trust and transparency around new technologies.
Why These Changes Matter
When examining these six labor and employment policy changes together, it becomes clear just how fluid the regulatory landscape has become. Employers are not only facing compliance risks but also operational hurdles. Overtime regulations can impact payroll expenses. Union laws can affect employee relations. Immigration enforcement can influence hiring practices. And let’s not forget how AI regulations can influence the adoption of technology.
Businesses that keep themselves informed and adaptable will be in a stronger position. By anticipating changes instead of just reacting to them, leaders can mitigate risks, enhance employee trust, and keep productivity on track.
Conclusion
The 2025 labor and employment policy changes are creating a workforce transformation. Independent agencies, overtime rules, union activity, DEI programs, immigration enforcement, and AI regulation are all shifting in ways that affect daily operations.
Employers who adapt quickly, by strengthening compliance, engaging employees, and planning for flexibility, will gain a competitive advantage. Labor policy is no longer static. It is an active force shaping the future of work.
By understanding and preparing for these changes, businesses can ensure compliance, manage costs effectively, and create workplaces that attract and retain the talent necessary to succeed.
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