the regulatory shift: what rising enforcement means for employers in 2025.

As regulatory scrutiny ramps up in 2025, businesses are under pressure to manage compliance risks more effectively—especially in workforce practices. From misclassification penalties to ICE inspections, the risks are real. This article helps employers understand the evolving landscape and take proactive steps to protect their operations.

how compliance risks are changing.

Compliance risks are changing faster than ever. Businesses need to keep a finger on the pulse of fast-moving regulatory changes, from AI compliance to changing overtime exemptions.

Worker classification and I-9 audits are a few important regulatory shifts employers should keep an eye on. Below is a more detailed explanation of each one, how they may impact employers, and best practices for keeping up with changing legislation.

worker classification challenges

Gig work is becoming the new norm to keep business agile – but relying on contract workers can introduce legal risk if contractors are treated like employees.

Worker classification laws aim to prevent employers from avoiding paying taxes and benefits by using independent contractors. For example, one construction firm was recently required to pay $191,750 to cover benefits and fines for misclassifying workers. However, sometimes the distinction can get murky.

Last year, the U.S. Department of Labor finalized guidance for classifying workers. Under the latest federal guidance, the DOL considers not only whether a worker can earn profit and work independently, but whether the nature of the relationship is indefinite, dependent, and controlled by the employer.

In addition to tracking federal law, employers should be familiar with state rules for classifying workers. Many states have adopted California’s “ABC test” which requires that independent contractors:

• Are free from control over how work is performed
• Engage in work outside the course of the employer’s usual business
• Have their own independent business or work operations

There’s speculation that independent contractor rules may change under the new administration – but for now, the 2024 ruling still applies. Proactive steps to review independent contractor agreements can help businesses avoid unintentionally misclassifying workers.

I-9 audits and ICE enforcement

Companies that rely on international talent face increased risk from I-9 and ICE enforcement. ICE audits require businesses to verify I-9 paperwork in 3 days to prove workers are eligible to work under U.S. immigration law – so good compliance can help prevent service disruptions and reduce risk.

In the event of an audit, incomplete paperwork can be costly: civil penalties can range from $281 to $2,789 for each paperwork violation and up to $5,579 for each hiring violation. Companies can also prepare with a response team that includes legal counsel and a clear communication process to protect workplaces. Resource guides that connect potentially vulnerable employees with legal aid can help support workers while maintaining compliance.

Increased enforcement also means longer visa wait times, since employees will now need to attend in-person visa appointments. Visas will also take longer to process, so companies in time-sensitive industries like logistics should plan in advance and incorporate verification early in the hiring process to mitigate delays.

In sectors like tech, controversy over H1-B visas may limit opportunities for immigrants in the future. Keeping up with developments over the coming years can help companies plan ahead and align hiring practices with evolving regulations.

best practices to avoid compliance risks.

When margins are slim, it can be tempting to hire quickly – but managers need to take the time to conduct proper background checks and comply with labor laws.

Avoiding worker classification errors, passing I-9 audits, and mitigating compliance risks will involve a multifaceted approach that includes training, internal audits, and compliance technology.

training hiring managers and HR

Companies with comprehensive training programs can help hiring managers and HR professionals spot compliance issues and resolve them proactively. Learning management systems and hiring policies should be updated as regulations change – and they should include all applicable laws.

For example, having policies in place to properly classify independent contractors can help managers avoid unintentionally misclassifying workers. However, businesses working with international contractors are subject to the labor laws of the contractors’ country. Training programs in foreign distribution centers, for example, should be modified to fit local laws.

At Randstad, we continuously train HR and compliance teams to stay up-to-date on all I-9 requirements and procedures in the U.S. Our international teams also monitor local compliance legislation to keep in step with local laws for multinational corporations.

conducting internal compliance audits

HR compliance audits are a regular review of your records, policies, and procedures to make sure they’re aligned with employment laws. They help you spot inaccurate or incomplete records and help you streamline processes to make best practices easier to follow.

An audit that uncovers incomplete I-9 forms, for example, could also involve updating hiring policies to include proper steps for filling out documents. In the normal course of business, companies often conduct these audits annually, but it’s also a good idea to initiate an audit when regulations change significantly.

using tech to reduce risk

Tracking the intricacies of U.S. and international labor laws isn’t always scalable, especially for large organizations with thousands of employee records.

Specialized technology that integrates with your HR tools can help you practice compliance more proactively, and flag any labor violations before they become liabilities. Technology can also help track compliance deadlines and update policy manuals automatically, updating your compliance toolkit as legislation changes. This can help make audits faster, and also help you determine when an extra audit is necessary.

Randstad’s rigorous compliance processes include automated monitoring along with manual checks to ensure I-9 forms are complete and accurate, and identify potential errors. For more than a decade, we have also participated in the E-Verify program to ensure every employee is authorized to work in the U.S.

building a strong, compliant workforce.

Compliance isn’t just about avoiding penalties – it’s about protecting your workforce. Fostering a workplace culture that values both compliance and dignity can build stronger teams while reducing regulatory risk. Training managers, conducting audits, and leveraging the latest technology can help businesses avoid costly mistakes and keep employees safe.

As your partner for talent, Randstad is committed to staffing solutions that help companies hire with confidence. We take a proactive approach to compliance to protect clients from violations, and offer a team of experts to help companies develop I-9 compliance strategies for their team.

Join our webinar for more information about adapting to changing laws, or reach out to a talent expert for personalized expertise on compliance strategies that fit your organization.