As the year draws to a close, it's important to remember that planning the budget for 2025 encompasses much more than just payroll, benefits, and reporting. As an HR leader, it's crucial to consider both current and upcoming legal requirements and to anticipate potential changes in compliance laws for 2025. Even if your budgets are already drafted, this serves as a gentle reminder to include essential requirements and vital risk-prevention measures that protect your company from non-compliance. 

This blog provides strategic guidance, tools, such as The HR Budget Template, and resources on how to budget for key HR functions that will be crucial in 2025. While you've probably already started your budget planning process, these key areas will serve as important reminders on some details you might want to add.

1. Federal and State Compliance Costs

Several mandatory reporting requirements for HR are time-sensitive and critical for legal compliance. Ensuring your budget for these tasks can help avoid penalties and keep your organization in good standing.

• EEO-1 Report
  Submitting the EEO-1 report is mandatory for companies with 100+ employees, and there may be associated costs for data management and legal review.
• Budget Strategy: Allocate funds for third-party services that can automate data collection and submission. Ensure there’s a portion of your budget dedicated support if necessary.
• Affirmative Action Plan (AAP)
  Federal contractors must maintain and update an AAP to ensure diversity and inclusion goals are met.
• Budget Strategy: Include funds for consulting services to help prepare the AAP, along with software solutions to track workforce demographic data and hiring patterns. Consider allocating funds for audits that assess AAP progress throughout the year.
• VETS-4212 (Federal Contractors)
  This annual report, required for federal contractors, involves gathering and reporting veteran employee data.
• Budget Strategy: Plan for any software upgrades or consulting fees that may be required to collect and submit this data efficiently. If your organization is expanding government contracts, ensure compliance reporting costs scale appropriately.
• State Pay Data Reporting
  States like California and Illinois now require detailed pay data reporting to ensure pay equity.
  
• Budget Strategy: Factor in any costs for HR software upgrades or consultant services needed to gather pay data by race, gender, and job category. Ensure compliance costs are scalable as pay transparency laws expand.

2. Pay Transparency and Equity Initiatives

With expanding pay transparency laws, HR leaders must budget for compliance and ensure that their pay practices are competitive and equitable.

• Pay Transparency Compliance
  Many states now mandate that employers disclose pay ranges in job postings, which requires HR to not only monitor but also communicate pay structures clearly.
• Budget Strategy: Budget for tools and pay equity services that help track and standardize pay ranges across departments, locations, and levels. Allocate resources for training managers to communicate pay policies effectively.
• Salary Benchmarking and Pay Equity Audits
  To ensure equitable pay practices, regularly conduct salary benchmarking and pay equity audits. This requires both internal and external data to compare your compensation packages with industry standards.
  
• Budget Strategy: Plan for salary benchmarking tools or services and schedule pay equity audits throughout the year. If pay discrepancies are identified, you may need to allocate additional funds for pay adjustments to avoid legal risks.
• Pay Communication Plan
  Transparency doesn’t just mean compliance—it’s about communicating clearly with employees.
  
• Budget Strategy: Allocate funds for developing a pay communication strategy, including manager training, employee education materials, and internal communications software or platforms

3. Labor Law Posters and Compliance

Compliance with labor law poster requirements is a simple but essential part of HR budgeting. Changes to federal or state labor laws often require updated posters, and many organizations with remote workers must also provide digital versions.

• Labor Law Posters
  HR must budget for regular updates to federal and state labor law posters, as well as ensure compliance across all work locations, including remote employees.
  
• Budget Strategy: Set aside funds for labor law poster subscription services that provide automatic updates to both physical and digital posters. This ensures compliance and reduces the risk of fines.

4. Workplace Safety and OSHA Reporting

Maintaining workplace safety and compliance with OSHA requirements requires a dedicated portion of your HR budget.

• OSHA 300A Reporting and Safety Training
  Organizations must post their OSHA 300A Summary of Work-Related Injuries and Illnesses and ensure employees receive ongoing safety training.
  
• Budget Strategy: Allocate funds for safety audits and OSHA reporting software. Invest in safety training programs, both online and in-person, to comply with OSHA standards and foster a culture of workplace safety.

5. Compliance Implementation

Simply creating reports and plans isn’t enough when it comes to employment compliance. Organizations that have undergone a government audit know that demonstrating action is critical. Budgeting for the implementation of your Affirmative Action Plan (AAP), pay equity, training, and other compliance-related efforts is essential to stay compliant and proactive.

• Affirmative Action Plans (AAP)
  Maintaining a compliant AAP involves more than just meeting annual requirements; it includes implementing related efforts like pay equity, recruitment, and ongoing training programs that reduce risk and potential violations.
• Budget Strategy: Allocate funds for consulting services to update your AAP and support initiatives such as pay equity audits, inclusive leadership training, and diversity strategies. This will ensure a holistic approach to compliance and workplace equity.
• Diversity Audits
  Conducting regular diversity audits can help identify recruitment and retention gaps and reveal areas for improvement in diversity strategies.
• Budget Strategy: Plan for diversity audits throughout the year and consider allocating funds for targeted recruiting efforts to attract diverse talent.

6. Employee Development and Engagement Programs

Investing in employee training, development, and engagement helps retain top talent and fosters a culture of continuous improvement.

• Training and Development
  Ongoing compliance training (such as harassment prevention and safety) and professional development programs should be factored into the HR budget.
• Budget Strategy: Allocate funds for compliance training platforms and workshops. Ensure that there’s room in the budget for leadership development and skills training to improve employee performance and job satisfaction.
• Employee Engagement Surveys and Tools
  Regularly checking the pulse of employee satisfaction and engagement is crucial for retention and productivity.
  
• Budget Strategy: Include budget for engagement survey tools, pulse surveys, and employee feedback platforms. Plan for costs related to implementing changes based on survey feedback.
  
  

DON'T FORGET YOUR 2025 HR COMPLIANCE BUDGET TOOLKIT