Nearly two-thirds of HR teams report that compliance became more complex in 2025, driven by rapid legal updates, multi-state requirements, and evolving workplace regulations. As laws and expectations continue to shift, staying compliant requires actively maintaining policies and processes, not just keeping documents on file.

Last year, 1 in 5 companies faced an employment-related lawsuit, with average penalties reaching $180,706. Notably, 42% of reported financial penalties came from small- and mid-sized businesses (under 250 employees), showing that legal exposure isn’t limited to large organizations—it’s a growing reality for teams of every size.

Half of HR teams say they don’t have the resources needed to manage compliance effectively, even as legal complexity continues to grow. Many organizations are forced to balance rising demands with limited budgets, often relying on costly outside counsel or patchwork tools to fill the gaps.