Employment Law Changes Coming Into Effect September 1st 2025

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What-Illinois-Business-Owners-Should-Know-About-the-One-Big-Beautiful-Bill-Act-300x300Several new employment laws go into effect in September and will affect employers in every state.

Independent Contractors rules:

  • The US Department of Labor adopted a six-factor test in January for classifying independent contractors under the Fair Labor Standards Act. This replaces the previous two-factor approach. The result is more workers will be classified as
    employees and thus eligible for overtime and other benefits.
  • The current administration might revise or even reverse the rule, but employers should be alert to the changes.

Expansion of paid sick and family leave laws:

  • Illinois is one of several states which have expanded sick leave and paid family leave laws which became effective in 2025.
  • If your business has not reviewed leave policies, it is important to bring your policies into compliance with these requirements.

Increased minimum wages in many jurisdictions:

  • Many states, cities, and counties across the US are implemented increases to their minimum wage in 2025, and if your business operates across state boundaries you should review your payroll practices.

Updates and changes related to DEI and federal government employment:

  • The Trump administration has issued executive orders aiming to restrict or terminate Diversity, Equity, and Inclusion (DEI) initiatives within the federal government and for federal contractors. The EEOC has also made changes to harassment guidance, removing references to sexual orientation and gender identity based on recent court decisions. If you business is a federal contractor, you should review your DEI policies but be alert to the constant shifting landscape.

Pay transparency laws continue to expand:

  • Illinois is one of several states which now require salary ranges in job postings or promotions.

These are some of the major changes taking effect or continuing to impact employers in 2025. Employers should consult with legal counsel to ensure compliance with all applicable laws, both at the federal and state levels, as the employment law landscape
continues to evolve rapidly.