The Small Business Compliance Outlook: Key Changes on the Horizon

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Regulations are shifting and small businesses can’t afford to fall behind.

From new state labor laws to stricter cybersecurity standards and benefits updates, small and mid-sized employers are facing a wave of evolving compliance requirements. The stakes? Costly penalties, employee dissatisfaction, and operational risk. This guide outlines the most important developments in HR, benefits, payroll, and data privacy so you can act before it’s too late.

Workplace Safety & Labor Standards

Proposed OSHA Workplace Safety Standard Updates (Timing subject to change)

  • What: OSHA has proposed enhanced safety standards, including expanded reporting requirements and tighter hazard controls. While no implementation date is confirmed, these updates are under consideration and could move forward depending on federal regulatory shifts.
  • Potential Impact: If finalized, small and mid-sized businesses may need to update workplace safety programs and reporting practices to maintain compliance. Proactive preparation could help avoid future penalties or increased insurance premiums.
  • Why It Matters: Staying ahead of these proposals can help reduce risk, avoid penalties, and demonstrate a proactive commitment to employee safety.

Minimum Wage Increases Across States and Municipalities (Effective dates vary by jurisdiction)

  • What: At least 15 states and numerous localities are scheduled to raise minimum wages. These changes often take effect at the start or middle of the year, depending on local legislation.
  • Impact: Small and mid-sized businesses need to update payroll systems and budgets to account for these changes and remain compliant.
  • Why It Matters: Timely payroll updates help maintain compliance, prevent wage disputes, and support employee satisfaction.

Health, Benefits & Workforce Policy

(ACA) PCORI Fee Deadline – July 31, 2025

SECURE Act 2.0 Retirement Plan Provisions Now in Effect

  • What: As of January 1, 2025, key elements of SECURE Act 2.0 —such as automatic enrollment for new 401(k) plans and increased catch-up contributions—are now active.
  • Impact: Employers should ensure plan administrators, payroll systems, and employee onboarding materials reflect these updates.
  • Why It Matters: These changes improve retirement readiness for your workforce and help keep your plan in compliance.
    • Reminder: SECURE Act 2.0’s automatic enrollment requirement took effect January 1, 2025, for newly established retirement plans. Final implementation regulations are still pending and may clarify additional requirements by 2027.

Anticipated Increase in PEO Compliance Audits

  • What: While no official guidance has been issued, industry experts expect heightened scrutiny of Professional Employer Organizations (PEOs), particularly in the areas of tax compliance, insurance coverage, and employee classification.
  • Impact: Small and mid-sized businesses utilizing PEOs should proactively verify their PEO's compliance to mitigate potential joint liability risks.
  • Why It Matters: Businesses using PEOs should proactively verify compliance to avoid joint liability exposure.

State-Level Developments to Watch

Employee Leave Law Expansions (Effective dates vary by state)

  • What: Several states are implementing or expanding paid family, medical, and sick leave laws. These updates are expected throughout 2026, often with phased or delayed rollouts.
  • Impact: Employers with employees in multiple states or remote roles should audit and update their leave policies to stay compliant with each state’s specific rules.
  • Why It Matters: Employers with multi-state or remote teams must regularly audit and update leave policies to stay compliant.
  • Examples of States with Expected Changes:
    • California: Broader paid family leave eligibility and longer wage replacement durations.
    • New York: Expanded leave benefits and qualifying reasons.
    • New Jersey: Updates to family leave insurance and sick leave accrual.
    • Washington: Adjustments to contribution rates and benefit duration.
    • Massachusetts: New caps and carryover rules for sick leave.
  • Note: This is not a comprehensive list. Always consult legal counsel or state-specific resources for the most current requirements.

Cybersecurity & Data Privacy Regulations (Effective dates vary by state)

  • What: Several states are expected to implement or update cybersecurity and data privacy regulations throughout 2026. These laws aim to enhance data protection measures and impose stricter breach notification requirements on businesses.
  • Impact: Small and mid-sized businesses should review and update their IT security and data management practices to comply with evolving state-specific regulations.
  • Why It Matters: Staying ahead of these changes helps protect your business from potential data breaches, maintain customer trust, and avoid legal liabilities.
  • Note: The effective dates and specific requirements vary by state. It's crucial to consult your legal counsel or trusted local resources to confirm which regulations apply to your business.

Why This Timeline Matters

Preparing early for regulatory shifts isn't just about compliance; it’s about protecting your business and empowering your workforce.

  • Stay Ahead of the Curve: Avoid last-minute scrambling and costly surprises.
  • Protect Your Reputation: Show employees and customers you're committed to safety, privacy, and fairness.
  • Strengthen Talent Strategies: Align benefits and policies with employee needs and legal requirements.
  • Simplify the Complex: Turn evolving regulations into manageable action items with the right guidance.

Let’s Get Ahead of What’s Next. Clarity leads to confidence. Don’t wait for the deadline to dictate your next move. Use this guide as a starting point and connect with a OneDigital advisor to build a tailored compliance strategy that keeps your business one step ahead.

Publish Date:Jul 7, 2025Categories:Small Business Essentials