Each new presidential administration has the potential to significantly shift employment law, impacting all organizations. As experts anticipate changes in workplace safety, employee classification, and operational practices under the upcoming Trump administration, organizations should be prepared for potential increases in liability exposure and rising property and casualty insurance needs. While it’s essential to comply with current laws, employers should also prepare for the policy shifts expected in 2025.

This article explores the key changes to watch and offers actionable steps your organization can take now to mitigate risks and stay ahead of evolving regulations.

Potential Trump Administration Policy Changes

Although the president enforces laws passed by Congress, President-elect Trump will still significantly influence the future of employment policies. Most significantly, his administration will appoint leaders of various federal agencies, including the Department of Labor (DOL) and the Equal Employment Opportunity Commission (EEOC), which oversee employment law. While the exact changes remain to be seen, Trump has indicated potential policy positions throughout his campaign. Employers can also look to the positions his administration pursued during its prior term for clues. Key employment law changes or initiatives employers should anticipate include:

DOL Overtime & Independent Contractor Rules

The potential rollback of the Biden-era overtime rules and changes to independent contractor classifications could create significant challenges. Adjustments to overtime eligibility may lead to confusion and increase the risk of wage and hour lawsuits, costly fines and penalties. Additionally, changes in worker classification standards could cause operational inefficiencies and conflicts with state-specific wage laws. Employers must correctly classify employees to avoid legal disputes and financial exposure.

Steps to Take Now

• Regularly audit employee classifications to ensure they’re up to date with the latest regulations to prevent issues.
• Maintain accurate records of hours worked and pay practices to avoid wage-related disputes.
• Work with a risk manager or legal counsel to review and update policies in response to changes in overtime and contractor regulations.
• Ensure your employment practices liability insurance (EPLI) coverage is sufficient to cover potential risks related to wage compliance.

OSHA Regulations on Workplace Safety

Changes to OSHA’s regulatory priorities could impact workplace safety compliance and liability. For instance, if protections like the Heat Injury Prevention rule are modified or repealed, legal requirements for safety measures could be reduced, increasing the risk of workplace injuries. This shift could expose employers to heightened exposure of OSHA citations, employee lawsuits or reputational damage if safety standards fail to meet evolving regulations. Additionally, a higher frequency of workplace incidents might lead to increased insurance premiums or challenges securing adequate coverage.

Even if certain regulations are relaxed, employers should remain vigilant. Maintaining robust safety practices reduces potential liabilities and supports employee wellbeing and operational efficiency. Businesses that invest in proactive risk management will be better positioned to mitigate the financial and legal challenges of shifting regulations.

Steps to Take Now

• Ensure your general liability and workers' compensation policies are sufficient.
• Update workplace safety measures and invest in safety programs.
• Partner with risk managers to align safety programs with updated standards.
• Provide regular safety training and actively monitor compliance.

Minimum Wage & Overtime Taxation Changes

Potential changes to federal wage laws, such as exempting overtime wages from federal income tax, could impact employers’ financial and operational practices. These changes may encourage increased overtime usage, leading to higher wage expenses. Additionally, shifts in tax liabilities might complicate financial planning, creating challenges in cash flow management. Employers that fail to account for these adjustments may face financial strain or difficulties maintaining profitability, particularly if their operations rely heavily on overtime labor.

As wage structures evolve, the financial implications could indirectly affect commercial operations, increasing the need for comprehensive risk management strategies. Proactively addressing these potential challenges can help businesses mitigate financial disruptions and maintain stability.

Steps to Take Now

• Review your commercial property and liability insurance policies for adequate financial protection.
• Adapt budgeting and cash flow projections to account for potential wage and tax changes.
• Consult with risk managers and financial advisors to prepare for legislative adjustments.

EEOC & Pay Data Collection Adjustments

Potential changes to anti-discrimination and pay equity initiatives could shift employer responsibilities, particularly if protections for vulnerable groups are scaled back. A reduced regulatory focus may alter compliance expectations, but could also increase scrutiny from employees, advocacy groups or third parties. Employers may face heightened risks of workplace discrimination claims or reputational damage from perceived inequities. These risks can become particularly challenging for organizations navigating workforce management in the context of evolving workplace standards and employee expectations.

Proactively address these risks to maintain compliance, foster a fair workplace environment, and protect against potential claims and liabilities.

Steps to Take Now:

• Review and strengthen your employment practices liability insurance and directors and officers (D&O) insurance to address discrimination-related exposures.
• Ensure workplace policies are inclusive, equitable and compliant with applicable laws to minimize risks.
• Provide anti-discrimination and workplace equity training to reinforce fair practices and reduce liabilities.
• Work with risk managers to evaluate and refine workplace policies with changing standards.

NLRB & Union Relations

Employer-friendly policies under a new administration may reduce union influence, potentially easing operational pressures. However, such shifts could also create challenges in labor relations, including conflicts that escalate into legal disputes. Companies might see a rise in claims tied to unfair labor practices or employee grievances as the regulatory landscape evolves. These risks could increase liability exposure, especially for businesses navigating negotiations with labor groups or adapting to revised National Labor Relations Board (NLRB) standards.

Effectively mitigating these risks is critical for protecting businesses from costly legal actions and maintaining productive labor relationships.

Steps to Take Now:

• Review liability insurance to ensure adequate protection for labor-related disputes, including claims of unfair labor practices.
• Stay informed about changes in NLRB standards and adjust labor practices accordingly.
• Implement and uphold fair labor policies that prioritize clear communication and equitable treatment of employees.
• Provide training for HR teams and management on compliance with labor regulations and best practices for union relations.

Regulation of Artificial Intelligence (AI)

The potential deregulation of artificial intelligence (AI) in the workplace may open the door for less controlled AI systems. While these tools can enhance efficiency and decision-making, their use in sensitive areas, such as hiring, pay and performance evaluations, carries significant risks. Errors or algorithmic biases within AI systems could expose employers to discrimination claims or other legal challenges, especially if the tools inadvertently disadvantage protected groups. The reliance on unregulated AI amplifies the potential for reputational damage and liability issues, necessitating proactive management of these technologies.

Steps to Take Now:

• Ensure professional liability insurance covers potential lawsuits tied to technology-related errors or discrimination claims.
• Establish robust oversight of AI tools, including routine audits for bias and accuracy.
• Align AI usage with current legal and ethical standards, regularly consulting with legal and risk advisors.
• Maintain transparency in AI-driven decisions and provide employees with channels to challenge or appeal outcomes.

DEI Policies & Restrictive Covenants

A potential reversal of diversity, equity and inclusion (DEI) initiatives and restrictive covenant rules could lead to increased legal disputes surrounding workforce management and non-compete agreements. If DEI practices are scaled back, employers may face heightened risks of discrimination claims, especially if certain groups feel excluded or disadvantaged. Additionally, changes to non-compete or non-disclosure agreements could result in employee retention and talent mobility challenges. These evolving shifts could leave employers vulnerable to legal action, reputational damage and heightened scrutiny from employees, regulators or the public.

Steps to Take Now:

• Work closely with your property and casualty insurer to ensure comprehensive employment practices liability insurance coverage to protect against discrimination claims.
• Maintain and strengthen inclusive policies that promote workplace diversity, equity and inclusion to mitigate potential legal risks.
• Foster a resilient, supportive company culture that values DEI and aligns with evolving best practices to avoid disputes and safeguard against employee dissatisfaction.

We’re Here to Help You Navigate Potential Risks

As these policy changes unfold, employers must proactively manage emerging financial and legal risks. Protect your organization from new exposures by staying informed on the evolving regulatory landscape and reviewing your insurance coverages. Collaborating with a trusted insurance and risk advisor is key to adapting to these anticipated changes while minimizing risks. For guidance on how these shifts may impact your business, connect with a member of our team to ensure you're fully prepared for the year ahead.