If you’re an employ­er or an employ­ee, keep­ing up with employ­ment law changes can feel like chas­ing a mov­ing tar­get. With new court deci­sions, leg­isla­tive updates, and evolv­ing work­place norms, it’s more impor­tant than ever to stay informed. As we set­tle into 2025, here are some of the most sig­nif­i­cant devel­op­ments shap­ing employ­ment law across the country—and par­tic­u­lar­ly in West Virginia.

1. Remote Work and Wage & Hour Compliance

The pan­dem­ic may be in the rearview mir­ror, but remote and hybrid work are here to stay. That shift has raised fresh legal ques­tions, par­tic­u­lar­ly when it comes to wage and hour compliance.

A major trend we’re see­ing is increased scruti­ny from the U.S. Depart­ment of Labor (DOL) regard­ing remote work­ers’ over­time eli­gi­bil­i­ty. The Fair Labor Stan­dards Act (FLSA) requires employ­ers to track hours worked accu­rate­ly, but when employ­ees are log­ging in from home, com­pli­ance gets tricky. Employ­ers must ensure that non-exempt employ­ees are prop­er­ly record­ing breaks, over­time, and any “off-the-clock” work.

West Vir­ginia busi­ness­es with remote employ­ees should take a close look at their time-track­ing poli­cies to avoid poten­tial wage claims. Even an hon­est mistake—like fail­ing to count time spent respond­ing to emails after hours—can lead to cost­ly litigation.

2. Noncompete Agreements Under Fire

Non­com­pete agree­ments have been a hot-but­ton issue in recent years, and 2025 is shap­ing up to be a turn­ing point. The Fed­er­al Trade Com­mis­sion (FTC) issued a rule (April 2024) with a near­ly com­pre­hen­sive nation­wide ban on most non­com­pete claus­es, argu­ing that they sti­fle job mobil­i­ty and wage growth. 

I will dis­cuss below the legal chal­lenges to the FTC rule, but employ­ers should review their exist­ing agree­ments and con­sid­er whether non­com­petes are still enforce­able (in light of applic­a­ble state law and the prospect of the FTC rule sur­viv­ing legal attacks) or if alter­na­tive protections—such as con­fi­den­tial­i­ty and non­so­lic­i­ta­tion clauses—are a bet­ter approach.

Sta­tus of the FTC rule

As of Feb­ru­ary 2025, the Fed­er­al Trade Com­mis­sion’s (FTC) rule ban­ning most non-com­pete agree­ments in the Unit­ed States remains unen­force­able due to ongo­ing legal chal­lenges. Here’s a con­cise overview of the cur­rent status:

April 2024: The FTC issued a final rule pro­hibit­ing near­ly all non-com­pete claus­es, aim­ing to enhance work­er mobil­i­ty and wages.

August 20, 2024: A fed­er­al judge in Texas ruled that the FTC lacked the author­i­ty to imple­ment such a sweep­ing ban, declar­ing the rule “unrea­son­ably over­broad” and block­ing its enforce­ment nationwide.

Octo­ber 18, 2024: The FTC appealed this deci­sion to the U.S. Court of Appeals for the Fifth Circuit.

The rule remains unen­force­able pend­ing the out­come of the appeal. The appel­late process is ongo­ing, and a final res­o­lu­tion may take addi­tion­al time.

Impli­ca­tions for Employ­ers and Workers

Because of the sus­pend­ed sta­tus of the FTC rule, employ­ers can con­tin­ue to use non-com­pete agree­ments where per­mit­ted by state law. How­ev­er, it’s essen­tial to stay informed about both fed­er­al devel­op­ments and state-spe­cif­ic reg­u­la­tions, as some states have their own restric­tions on non-com­pete clauses.

3. Workplace AI and Hiring Practices

Arti­fi­cial intel­li­gence (AI) is play­ing an increas­ing role in hir­ing, but that’s bring­ing new legal risks. Employ­ers are using AI-dri­ven tools to screen resumes, con­duct inter­views, and even pre­dict employ­ee per­for­mance. How­ev­er, reg­u­la­tors and courts are start­ing to exam­ine whether these tools might unin­ten­tion­al­ly dis­crim­i­nate against cer­tain job applicants.

The Equal Employ­ment Oppor­tu­ni­ty Com­mis­sion (EEOC) in April 2023 issued a guid­ance doc­u­ment, warn­ing that employ­ers remain respon­si­ble for ensur­ing that AI tools com­ply with anti-dis­crim­i­na­tion laws, It was a tech­ni­cal assis­tance doc­u­ment titled “Assess­ing Adverse Impact in Soft­ware, Algo­rithms, and Arti­fi­cial Intel­li­gence Used in Employ­ment Selec­tion Pro­ce­dures Under Title VII of the Civ­il Rights Act of 1964.” Accord­ing to the EEOC, if an AI-dri­ven hir­ing plat­form dis­pro­por­tion­ate­ly screens out can­di­dates based on race, gen­der, age, or dis­abil­i­ty, the employ­er could be held liable—even if the dis­crim­i­na­tion was unin­ten­tion­al. How­ev­er, although the EEOC press release announc­ing the tech­ni­cal asis­stance doc­u­ment is still on the EEOC web site, the doc­u­ment itself is no longer there. I haven’t been able to fig­ure out when it was pulled off the web site, but I sus­pect it is the result of the dra­mat­ic changes by the Trump admin­is­tra­tion in the poli­cies toward anti-dis­crim­i­na­tion law.

Keep in mind that, even if the EEOC is chang­ing direc­tions on whether AI algo­rithms may result in dis­crim­i­na­to­ry prac­tices, states are free, in apply­ing their own anti-dis­crim­i­na­tion laws, to address that issue in a way that may be more pro­tec­tive of employ­ees. So know­ing what your state law says on the issue is important.

To avoid prob­lems, employ­ers using AI in hir­ing should reg­u­lar­ly audit their sys­tems for bias and con­sid­er work­ing with legal coun­sel to ensure com­pli­ance with applic­a­ble anti-dis­crim­i­na­tion law.

4. Paid Leave Expansions

Paid leave laws con­tin­ue to evolve, with more states imple­ment­ing or expand­ing paid fam­i­ly and med­ical leave pro­grams. The fed­er­al Fam­i­ly and Med­ical Leave Act (“FMLA”) pro­vides only for unpaid leave under cer­tain qual­i­fy­ing circumstances.

While West Vir­ginia hasn’t enact­ed a state-lev­el paid leave require­ment, fed­er­al changes could be on the hori­zon. But in the short term, with the degree of con­trol the Repub­li­cans have over the Pres­i­den­cy, the House, and the Sen­ate (from the Novem­ber 2024 elec­tions), it is not like­ly we will see any of those changes in the next 4 years. Democ­rats have aggres­sive­ly advo­cat­ed for paid leave in the past, and most Euo­pean coun­tries pro­vide for paid leave. But the prospects of that hap­pen­ing in the US in the short term is very remote.

Even if a fed­er­al man­date doesn’t pass, busi­ness­es oper­at­ing in mul­ti­ple states may soon need to nav­i­gate an increas­ing­ly com­plex patch­work of state paid leave laws.

Sev­er­al U.S. states have enact­ed laws that pro­vide for paid fam­i­ly and med­ical leave, sup­ple­ment­ing the fed­er­al FMLA, which offers unpaid leave. As of Feb­ru­ary 2025, the fol­low­ing states and the Dis­trict of Colum­bia have imple­ment­ed var­i­ous types of paid leave programs:

• Cal­i­for­nia
• Col­orado
• Con­necti­cut
• Delaware
• Maine
• Mary­land
• Mass­a­chu­setts
• Min­neso­ta
• New Jer­sey
• New York
• Ore­gon
• Rhode Island
• Wash­ing­ton
• Dis­trict of Columbia

These state pro­grams, with sig­nif­i­cant vari­a­tions, gen­er­al­ly pro­vide paid leave for:

• Med­ical Leave: For an indi­vid­u­al’s own seri­ous health condition.
• Fam­i­ly Care­giv­ing Leave: To care for a fam­i­ly mem­ber with a seri­ous health condition.
• Parental Leave: For bond­ing with a new child, applic­a­ble to both par­ents and includ­ing adop­tive and fos­ter care situations.

The specifics of these pro­grams, such as the dura­tion of leave, ben­e­fit amounts, and fund­ing mech­a­nisms, vary by state. For instance, Cal­i­for­nia offers up to eight weeks of paid fam­i­ly leave, while Mass­a­chu­setts pro­vides up to 12 weeks. Fund­ing is typ­i­cal­ly through pay­roll tax­es, with con­tri­bu­tions from employ­ees, employ­ers, or both.

Addi­tion­al­ly, some states have estab­lished vol­un­tary paid fam­i­ly and med­ical leave insur­ance pro­grams. For exam­ple, New Hamp­shire and Ver­mont have such pro­grams, allow­ing employ­ers to opt into pro­vid­ing paid leave ben­e­fits to their employees.

It’s impor­tant to note that the avail­abil­i­ty and specifics of paid leave can vary sig­nif­i­cant­ly by state. Employ­ers and employ­ees should con­sult their respec­tive state labor depart­ments or offi­cial resources to under­stand the applic­a­ble laws and benefits.

5. The Changing Definition of “Independent Contractor”

The clas­si­fi­ca­tion of inde­pen­dent con­trac­tors ver­sus employ­ees has long been a dif­fi­cult issue. The prob­lem is aggra­vat­ed by changes dur­ing the first Trump admin­is­tra­tion, then the Biden admin­is­tra­tion, and already under the sec­ond Trump admin­is­tra­tion. The Biden admin­is­tra­tion favored a more demand­ing test that made it more dif­fi­cult to sat­is­fy the legal require­ments for being clas­si­fied as an inden­dent con­trac­tor. The Trump admin­is­tra­tion has favored a more lenient approach to make it eas­i­er for employ­ers to clas­si­fy employ­ees as ind­pen­dent contractors. 

His­tor­i­cal­ly, both fed­er­al and state agen­cies have relied on the IRS test, which is large­ly based on the degree of con­trol the employ­er has over the employ­eee or inde­pen­dent con­trac­tor. The IRS has sig­nif­i­cant resources on its web site devot­ed to those issues, and for help­ing employ­ers and employ­ees to under­stand the law.

The “sta­tus quo” test from the IRS (for the time being) is based on the com­mon law rules, which eval­u­ate the degree of con­trol and inde­pen­dence work­ers have in per­form­ing their job. The IRS uses a three-cat­e­go­ry test with mul­ti­ple fac­tors to assess whether a work­er is an employ­ee or an inde­pen­dent con­trac­tor under tax laws.

The Three-Factor IRS Test

The IRS exam­ines a work­er’s clas­si­fi­ca­tion based on three main cat­e­gories:

1. Behavioral Control – Does the employer control how the worker performs the job?

• If the employ­er directs or con­trols how the work is done (e.g., pro­vides spe­cif­ic instruc­tions or train­ing), the work­er is like­ly an employ­ee.
• If the work­er has free­dom to decide how, when, and where to com­plete the work, they are more like­ly an inde­pen­dent con­trac­tor.
• Key fac­tors:
  • Instruc­tions giv­en about when, where, or how to work.
  • Train­ing pro­vid­ed by the employer.
  • Eval­u­a­tion sys­tems that mea­sure how the work is done (rather than just results).

2. Financial Control – Does the worker have a significant financial investment in their work?

• Inde­pen­dent con­trac­tors have more finan­cial con­trol, mean­ing they bear the costs of tools, mate­ri­als, and busi­ness expenses.
• Employ­ees typ­i­cal­ly have their expens­es paid or reim­bursed by the employer.
• Key fac­tors:
  • Sig­nif­i­cant invest­ment in tools, equip­ment, or facilities.
  • Unre­im­bursed expens­es (con­trac­tors often cov­er their own costs).
  • Oppor­tu­ni­ty for prof­it or loss (con­trac­tors can make or lose mon­ey based on how they man­age their business).

3. Relationship of the Parties – What is the nature of the relationship?

• If the rela­tion­ship is expect­ed to con­tin­ue indef­i­nite­ly, the work­er is like­ly an employ­ee.
• If the work­er is hired for a spe­cif­ic project or peri­od, they are like­ly an inde­pen­dent con­trac­tor.
• Key fac­tors:
  • Writ­ten con­tracts stat­ing the work­er is an inde­pen­dent con­trac­tor (though a con­tract alone is not determinative).
  • Ben­e­fits pro­vid­ed (employ­ees typ­i­cal­ly receive health insur­ance, retire­ment plans, etc.).
  • Per­ma­nen­cy of the rela­tion­ship (long-term, con­tin­u­ous work sug­gests employ­ee status).
  • Ser­vices pro­vid­ed as a key aspect of the busi­ness (if the work­er per­forms core busi­ness func­tions, they are more like­ly an employee).

IRS Form SS‑8

If an employ­er or work­er is unsure about clas­si­fi­ca­tion, they can request a deter­mi­na­tion from the IRS by fil­ing Form SS‑8 (Deter­mi­na­tion of Work­er Sta­tus for Pur­pos­es of Fed­er­al Employ­ment Tax­es and Income Tax With­hold­ing).

Employ­ers in West Vir­ginia should assess their inde­pen­dent con­trac­tor rela­tion­ships to ensure they align with evolv­ing legal stan­dards. I will dis­cuss in a sep­a­rate post some spe­cif­ic legal require­ments in West Vir­ginia for inde­pen­dent con­trac­tor relationships.

Final Thoughts

Employ­ment law nev­er stays still, and 2025 is prov­ing to be no excep­tion. Whether you’re an employ­er try­ing to stay com­pli­ant or an employ­ee try­ing to under­stand your rights, these changes could have a major impact.

For West Vir­ginia busi­ness­es, now is a good time to review work­place poli­cies, update con­tracts, and stay ahead of poten­tial legal pit­falls. And as always, con­sult­ing with an employ­ment law attor­ney can help nav­i­gate these changes with confidence.

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Drew M. Capuder

Attorney at Capuder Fantasia PLLC

Publisher of Drew Capuder's Employment Law Blog. Lawyer with more than 30 years of experience, focusing on employment law, commercial litigation, and mediation. Extensive trial and appellate experience in state and federal courts. Call Drew at 304-333-5261.

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