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Despite growing risks and increasing regulatory complexity, only 33% of organizations take a proactive approach to labor and employment law compliance, according to the HR Research Institute’s (HRRI) new research report, HR.com’s State of Legal Compliance and Employment Law 2025.
The study reveals a worrying gap between confidence and capability:
78% of HR professionals believe their organization is well prepared for labor and employment compliance issues.
Yet only 13% strongly agree that their compliance processes use up-to-date technologies, and just 10% report having highly automated systems.
Over half of respondents expressed dissatisfaction or neutrality regarding the level of automation and integration in their compliance systems.
The report also reveals that only 49% of respondents believe their compliance initiatives are adequately funded, highlighting a major resource gap. Despite this, 34% of organizations have faced at least one employment-related enforcement action in the past year, underscoring the real-world consequences of underinvestment.
Further, 20% rely on outdated systems, 14% have only partially documented procedures, and 9% remain purely reactive—signaling a significant need for modernization and strategic alignment.
“This disconnect between perceived preparedness and actual infrastructure is a red flag,” said Debbie McGrath, Chief Instigator and CEO at HR.com. “Many organizations may be overestimating their readiness while still relying on outdated,
