Quarterly HR Update – September 2025

Despite having an 86-degree day here in Seattle last week in mid-September, we think fall is finally here! As we embrace the crisp air, enjoy the return to sweater weather, and see “pumpkin spice” everywhere we turn, we know there is a lot happening in the world and the employment landscape.

To support you and your business, we are pleased to share our latest Quarterly Update with you, where we’ve focused on key legal changes and other important employment information.

Please note this is a summary of upcoming changes and not an all-inclusive overview.

HRT News

To kick-off this quarter’s update, we have exciting news to share! Erin Hansen is the newest member of the HRT Northwest team, bringing over 10 years of experience across biotech, education, hospitality, and professional services. She excels at aligning people strategy with business goals and navigating complex compliance issues. With a values-driven approach and broad HR expertise, Erin delivers practical, transformative solutions that foster integrity and long-term success.

Welcome Erin!

Legal Updates & Info

Under Federal Law…

Medicare Part D Notification Requirements: The Centers for Medicare & Medicaid Services (CMS) require group health plan sponsors to provide the Medicare Part D Creditable Coverage Disclosure to Medicare-eligible individuals before October 15th of each year. We find that most plans are creditable (which means your prescription drug plan offers the same or better benefits than the Medicare Part D plan) and often brokers will include a Medicare Part D Notice in open enrollment packets. In terms of next steps to meet this notification requirement:

Determine if your group prescription drug plan is creditable. (If you are unsure, check with your broker)
If not provided by your broker, customize the appropriate model notice here. (Very few fields need to be customized!)
Send the Disclosure to all plan participants. (While the requirement is to send the Disclosure to Medicare-eligible individuals, because it is difficult to know who is Medicare-eligible, we recommend sending the Disclosure to all plan participants)

No Tax on Tips & Revised W-2: On our mid-Quarterly Update in July we shared a few topics from the One Big Beautiful Bill Act (OBBBA), which included information regarding qualifying overtime and qualifying tips not being taxed at the federal level. The Treasury Department is required to publish, by October 2, 2025, a list of qualifying occupations that will benefit from this. In the meantime, a preliminary list has been provided. Given the tax implications this will have, the IRS is revising the Form W-2. We are sharing links to more information, courtesy of Littler, for more information on the preliminary list and the revised W-2 if you’d like to learn more.

Religious Accommodations: Since the enactment of Title VII of the Civil Rights Act of 1964, employers have been required to accommodate an employee’s sincerely held religious beliefs unless it poses an “undue hardship” on the employer. For many years, the term “undue hardship” was largely interpreted as “more than a de minimis cost” – which basically meant any minimal cost could justify the employer in denying the accommodation. In 2023, this changed with the Groff v DeJoy decision, which rejected the de minimis standard, ruling that the employer must show the accommodation would impose “substantial increased costs in relation to the conduct of its particular business”.

Fast forward to present day, the EEOC has “taken a series of enforcement actions to defend the religious liberty of American workers” as outlined on this Press Release from August, where 200 days’ worth of lawsuit activity by the EEOC are outlined, all related to religious accommodations, and applying this new standard.

What does all this mean? In short, the burden has shifted significantly to the employer – there will be a higher standard for employers to claim undue hardship.

As a reminder, directly from the EEOC guidance regarding the term “sincerely held”: “Title VII requires employers to accommodate only those religious beliefs that are religious and “sincerely held,” and that can be accommodated without an undue hardship. Although there is usually no reason to question whether the practice at issue is religious or sincerely held, if the employer has a bona fide doubt about the basis for the accommodation request, it is entitled to make a limited inquiry into the facts and circumstances of the employee’s claim that the belief or practice at issue is religious and sincerely held, and gives rise to the need for the accommodation.” The guidance outlines some factors, but then goes on to say “However, none of these factors is dispositive. For example, although prior inconsistent conduct is relevant to the question of sincerity, an individual’s beliefs – or degree of adherence – may change over time, and therefore an employee’s newly adopted or inconsistently observed religious practice may nevertheless be sincerely held. An employer also should not assume that an employee is insincere simply because some of his or her practices deviate from the commonly followed tenets of his or her religion.”

What should employers do now? Along with having clearly written Accommodation policies and procedures, it’s crucial for all employers to thoughtfully engage in a thorough and complete interactive process when accommodation requests are received. And, please reach out to HRT to help navigate these situations!

New Form I-9: There is a new version of the Form I-9 available, with an expiration date of 5/31/2027. But, that doesn’t mean you have to start using it! According to the U.S. Citizenship and Immigration Services website, employers may also use either of the following previous editions:

Form I-9 with an 08/01/23 edition date, valid until its expiration date of 05/31/2027; and
Form I-9 with an 08/01/23 edition date, valid until its expiration date of 07/31/2026.

We recommend ensuring you are using one of the three versions mentioned above.

Deep Fakes: In this week’s episode of “what else do I need to be worried about” – we’d like to share some information on deep fakes, which have been surfacing in the workplace in the forms of digital harassment and fake job applicants. In terms of digital harassment, artificial intelligence (AI) is used to generate videos, images or audio to exploit or harass employees. From the job applicant side, a deep fake job applicant is one who uses artificial intelligence (AI) to create a fake identity by manipulating audio and video during interviews, creating fake resumes and LinkedIn profiles, and fabricating educational and work history. We’ve found a couple recent articles from Littler and Fisher Phillips that tackle this phenomenon, including specific steps an organization can take to reduce your risk.

Under Washington Law…

State & City Minimum Wage Changes, effective January 1, 2026: Washington State and the cities of Seattle and SeaTac should be announcing their minimum wage changes effective January 1, 2026, sometime later this month. We will report back once that information is announced.

Exempt Salary Threshold Increase, effective January 1, 2026: Once the new minimum wage for Washington State is decided, the minimum salary threshold for exempt employees will also increase, effective January 1, 2026. Washington established an implementation schedule for annual changes a few years ago and will likely announce the approved threshold for 2026 in the coming weeks. As a reminder, the threshold is directly linked to the minimum wage. While the 2025 threshold was different for small and large employers, this year the threshold will be the same for ALL employers, which is currently projected to be $79,934.40, which is 2.25x the minimum wage. This is a significant increase for small employers (1-50 employees), whose current threshold is $69,305.60. This is minimal for large employers (51+ employees), whose current threshold is $77,968.80.

Job Applicant Rights & Pay Transparency: Washington’s pay transparency laws not only require employers to include specific salary and benefits information in job postings, but also grant job applicants the right to file claims if this information is missing or not fully correct. Depending on the position, some job postings can receive a LOT of applicants – and some may not be qualified. So, can any job applicant, regardless of actual qualifications, file a claim?

A recent court decision answers this question. The decision in Branson v. Washington Fine Wine & Spirits enables any job applicant, regardless of qualification or whether the individual applied in good faith, to file a claim against a company for failing to meet the pay and benefit disclosure requirements. As this Fisher Phillips article outlines, this decision “invites a spike in “serial plaintiffs” who merely apply for jobs in aid of bringing large-scale class action lawsuits against employers that commit technical violations of the strict law.”

How do you prevent claims at your organization? As mentioned in the Fisher article: Audit your job postings to ensure the posted information meets the state requirements; review your pay rates/ranges to ensure fairness and equity; and lastly, set up an internal process to respond to complaints within the five-day window to correct information.

Wage & Hour Class Actions: Not to be alarmist, but rather to share the current landscape – the number of wage-and-hour class action lawsuits in Washington is increasing. Wage-and-hour lawsuits apply to items governed by the Minimum Wage Act (MWA). To help ensure you remain compliant, we recommend reviewing and updating your policies regarding:

Meal and rest breaks
Classifying employees (exempt versus non-exempt)
Overtime payments
Paid Sick Leave

If you need support or assistance, please reach out to HRT!

Under California Law…

Minimum Wage & Exempt Salary Threshold, effective January 1, 2026: California is planning some wage-related changes for 2026. If you are a California employer or have California employees, here is what you need to know:

Effective January 1, 2026, the minimum wage for all California employers is $16.90 per hour. (This is up from $16.50 per hour). (Source)
Keep an eye on local changes too – cities or counties may have minimum wage changes as well. Please check your specific city requirements.
The exempt salary threshold (for white-collar exemptions to overtime requirements) will increase to $70,304 per year on January 1, 2026. This is tied to the new minimum wage, and based on California’s requirement that exempt staff earn at least two times the state minimum wage based on full-time work. (This is up from $68,640 per year).

CFCA Enforcement: The California Fair Chance Act (CFCA) regulates stages of the hiring process (both pre- and post-offer), regarding an applicant’s conviction history. One primary purpose of the CFCA is to delay inquiries regarding any such history until after the applicant receives a conditional job offer. Littler reports the California Civil Rights Department (CRD) is ramping up CFCA enforcement. We recommend ensuring your hiring practices in California are compliant with the CFCA, as outlined in the linked article. Please reach out to HRT if we can be of assistance!

Artificial Intelligence Regulations: The world of Artificial Intelligence is moving fast – and effective October 1, 2025 in California, specific laws (as outlined in revision to Title 2 of the California Code of Regulations) will provide some parameters around its use in the workplace, focused on AI tools used to help “human decision-making”. Here is a highlight of what is included:

The scope of “automated decision-making systems” (ADS) is now defined.
Details regarding the prohibition of discriminatory use of ADS.
Anti-Bias training requirements of ADS.

While much of these regulations likely apply to the companies who create these tools, employers who deploy these tools should be aware of these requirements as well. This article from Littler provides very detailed information about this topic.

Under Oregon Law…

Oregon is giving us a little break this quarter…we have nothing to report!

HRT Northwest: Your Northwest HR Team

(253) 642-7372 | info@hrtnorthwest.com

This Update is not a full overview of all recent or upcoming legal changes. HRT Northwest is staffed by professionals in the field of Human Resources and business management. We are glad to help with your HR needs; however, we do not offer legal advice and our services are not a substitute for the help of a qualified attorney.