As we have already seen in the last two weeks, with a new administration comes big changes. Let’s take a look at what we know is ahead for us with employment law updates in 2025 and what may still be to come.
Alabama Employment Law
For employers in Alabama, there are a few laws that passed last year that may have tax implications for your organization. You can click on any of the headings to read more about each of these employment law updates in 2025.
Childcare Center Tax Credit: This tax credit went into effect on January 1, 2025 and will run through December, 31, 2027, unless it gets extended. In order to qualify, the organization must be a childcare provider licensed by the state and participate in the Qualified Rating and Improvement System and Child Care Subsidy Program. Qualifying organizations may receive a tax credit of up to $25,000 annually to be used to against income taxes, state portion of the financial institution excise tax, insurance premiums tax, or utility license tax.
Workforce Housing Tax Credit: The housing credit is intended to encourage and promote investment in affordable rental housing for low-income families near employers or new areas of economic growth. It offers a dollar-for-dollar credit for certain Alabama tax liabilities.
Overtime Pay Exemption: The overtime pay tax exemption continues for 2025 and is currently set to expire on June 30, 2025. Currently employees are not taxed on overtime wages and the state has enforced certain reporting requirements on employers. We will keep an eye on this to see if the exemption is extended beyond the current expiration date.
Alabama House Bills to watch
There are currently three bills in the state legislature bringing possible employment law updates in 2025. These are the bills under consideration that could impact employers if passed.
HB20: In recent years there have been a few states and localities to look at discrimination on the basis of weight, and Alabama has joined the list. House Bill 20, if passed, would make it illegal to base hiring and employment decisions on a person’s weight or body size. It’s important to note under this bill that there is not a Bona Fide Occupational Qualifications (BFOQ) exception.
HB21: House Bill 21 mirrors the Federal law requiring employers to provide reasonable break time and make a reasonable effort to provide a private location, other than a bathroom, for employees who are nursing mothers to use for lactation purposes.
HB29: House Bill 29 relates to updates to the current state unemployment benefits requirements. The primary impact of this Bill would be to change the current requirement that a recipient of benefits apply to at least three (3) positions per week to retain their benefits up to five (5) applications per week.
Federal Employment Law:
Let’s start by looking at what bills are sitting in the House and Senate that might impact employers this year, then we’ll discuss the administrative actions that have occurred in the last two weeks, what we know and don’t know about them, and how they may impact your organization.
There have been recent bills introduced in the House and/or Senate relating to wages for secondary employment being exempt from income taxes, updating the Immigration and Nationality Act with regards to E-Verify usage, and multiple bills that address various aspects of immigration that could have an impact on work visas and authorizations. There isn’t much information available about each of these bills yet as they were just introduced and the text has not yet been made public on Congress.gov.
Executive Orders
Now let’s talk about the recent Executive Orders that have been signed by President Trump and what they may mean for your organizations.
In summary, there are a few major areas that we will be watching over the next year. The Executive Orders signed by President Trump leave a lot of questions unanswered and we will just have to wait and see how they ultimately impact Federal agencies and contractors, as well as other private and public employers. The primary areas to watch are
- immigration and the impact on work visas and authorizations
- regulations pertaining to federal contracting including DE&I initiatives
- Title VII protections against discrimination on the basis of sexual orientation and gender identity.
The Trump administration is focused on ending “illegal and discriminatory programs” that were implemented as part of Biden’s DE&I initiatives. President Trump has required that all Federal employment practices, union contracts, and training programs and policies be reviewed and brought into compliance with Executive Order 14151.
EO14151 requires that employment decisions and practices be based on individual initiative, skills, and performance, and that DE&I factors, goals, mandates, etc. are not factored into the decisions. It also dictates that Federal agencies require that their contractors and sub-contractors base their employment decisions on the same, thus eliminating affirmative action employment decisions. There are a number of review and reporting requirements that are outlined and may impact Federal agencies, contractors, and sub-contractors depending upon the findings. Unfortunately, the full impact of this Executive Order may not be known for quite some time.
In addition to the rollback on DE&I initiatives, the Trump administration has rolled back a number of Executive Orders implemented by previous administrations including EO13988: Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation. We will have to wait and see how this recension plays out given the fact that the Supreme Court ruled in Bostock v. Clayton County, GA (2020) that Title VII of the Civil Rights Act protects from discrimination on the basis of gender identity and sexual orientation.
While this is a very brief overview, more information on employment law updates in 2025 (and what may be to come) can be found at the resources below:
A Note From Our Team
Horizon Point believes in diverse, equitable, and inclusive workplaces. We believe that the most successful, thriving businesses are those who value People First and create a sense of belonging for those they employ and serve.
We will continue to support our clients in driving the workplace forward through innovative people practices: our compensation plans address pay equity, our training programs are designed for diverse learning needs, and our engagement services focus on inclusion and development of all people in the workplace. To learn more about our work in these areas, read these stories from our team: