New Year, New Rules: Key Federal Updates for 2025

As we move into 2025, several important federal law changes have taken effect or will soon take effect. Here’s a roundup of the key updates that impact businesses and employees:


IRS Mileage Reimbursement Rate

Effective January 1, 2025, the IRS standard mileage rate has increased to 70 cents per mile for business travel, up from 67 cents in 2024. This rate applies to all vehicles, including electric and hybrid models.


While using the IRS rate for mileage reimbursement is optional, it remains a widely accepted standard for reimbursing employees who use their personal vehicles for work-related travel. If your organization uses the IRS rate, be sure your systems reflect this updated rate.


Extension for EAD Automatic Extension Period

Since 2022, the Department of Homeland Security has had temporary rules extending the automatic extension period for Employment Authorization Documents (EADs) from 180 days to 540 days due to processing backlogs. Starting January 13, 2025, this 540-day extension will become the permanent standard for certain EAD renewals.


The final rule applies to EAD applications filed on or after May 4, 2022, that remain pending. For more details on this change, you can review the official guidance on EAD extensions.


Federal Contractor Minimum Wage Increases

As of 2025, the minimum wage for employees working under federal contracts has increased as follows:


  • Contracts Covered by Executive Order 13658: The minimum wage has risen to $13.30 per hour, with the minimum base wage for tipped employees increasing to $9.30 per hour.


  • Contracts Covered by Executive Order 14026: The minimum wage for both tipped and non-tipped employees is now $17.75 per hour.


For more information on the contracts covered by these executive orders, including helpful FAQs and a side-by-side comparison, visit the Department of Labor's resources here.

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