Intro to Federal and Multi-State Labor Laws

The Department of Homeland Security (DHS) has ended the automatic extension of certain Employment Authorization Documents (EADs) for renewal applicants. This change applies to applications filed on or after October 30, 2025. Prior to this ruling, EAD renewal applicants received an automatic 540-day extension. However, workers who file renewal applications on or after October 30, 2025, will no longer benefit from this automatic extension and may not have a valid document for continued work eligibility. This change has immediate implications for employers regarding work authorization compliance and workforce planning. Employers should identify employees who may be affected by this new rule, initiate early EAD extension filings, and establish plans to manage potential operational disruptions if new EADs are not issued in a timely manner.

A new Presidential Proclamation, effective September 21, 2025, places limitations on certain H-1B employees, including a new $100,000 fee for new H-1B petitions. The proclamation does not affect existing H-1B employees or those with pending petitions filed before this date, nor does it apply to extensions or transfers. Employers should consult with immigration counsel to assess how this proclamation impacts their hiring of H-1B workers and to ensure compliance with the new fee requirements.

The Fifth Circuit recently clarified the application of the Fair Labor Standards Act's (FLSA) highly compensated employee (HCE) overtime exemption, holding that an employee earning at least the regulatory threshold (currently $107,432 per year) qualifies as exempt if they customarily and regularly perform even a single duty associated with the executive, administrative, or professional exemptions. Currently, this clarification only applies to the Fifth Circuit (Texas, Mississippi, and Louisiana), but may have persuasive implications for other Federal Districts.

The Trump Administration has ended the Federal Trade Commission's (FTC) attempt to ban non-compete agreements nationwide by dismissing an appeal of a court ruling. The rule, which was to be effective on August 20, 2025, was blocked by a Texas court and will not go into effect. Instead of a universal ban, the FTC will now address non-compete agreements through enforcement actions on a case-by-case basis. As a result, employers can continue to operate under existing state laws regarding non-compete practices. Employers should review their non-compete agreements to ensure they comply with current state laws and be prepared for potential case-by-case enforcement actions by the FTC.

On July 4, 2025, Congress passed the One Big Beautiful Bill, which cancelled all Employee Retention Tax Credits (ERTC) for claims for Q3 and Q4 of 2021 filed after January 31, 2024. This change means that any claims submitted after that date–including those filed through Justworks–will no longer be processed, and businesses will not receive credit for those two quarters.

On July 24, 2025, the U.S. Department of Labor reinstated its Payroll Audit Independent Determination (PAID) program, originally launched in April 2018 and discontinued in January 2021. The revived program offers a voluntary self-audit option for employers covered by FLSA and FMLA. This allows them to proactively identify and report compliance issues to the DOL, rectify their practices, and offer suitable resolutions outside of litigation. To be eligible, employers cannot have ongoing investigations or legal actions, and require disclosure of prior complaints. Employers exploring PAID audits should connect with legal counsel to discuss options.