2026 HR Compliance Is About to Get Harder：Here’s What Employers Need to Know

As 2026 begins, several U.S. states—including California, New York, Washington, Texas, and New Jersey—have introduced or updated key employment laws related to minimum wage, exemption thresholds, layoff procedures, pay transparency, and the use of artificial intelligence in hiring. For HR professionals and business leaders, understanding and implementing these changes is critical to minimizing compliance risks and avoiding costly disputes or penalties.

With labor laws and employment regulations rapidly evolving across multiple states in 2026, employers face heightened risks in wage compliance, employee classification, layoff procedures, and hiring practices. We invite you to contact the ILS legal team at contact@consultils.com for actionable, tailored compliance solutions aligned with your company’s specific operational needs.

California

• Minimum Wage: $16.90/hour statewide.

• Exempt Employee Salary Threshold: $70,304/year.

• Ban on “Stay-or-Pay” Agreements (AB 692): Effective January 1, 2026, employers can no longer require employees to repay training or relocation costs under new agreements.

• Mass Layoff Notice Updates (SB 617): Employers must now include CalFresh food assistance information and employer contact details in WARN notices.

• AI Hiring Compliance (FEHA Update): Employers using AI or automation in hiring must conduct anti-discrimination audits. Liability may extend to third-party vendors.

• Pay Transparency (SB 642): Job postings must include a “good faith” salary range with stricter enforcement standards.

• Pay Data Reporting Penalties: Now mandatory—$100 per employee for violations; $200 for repeat offenses.

  
  

New York

• Minimum Wage：

  • NYC / Long Island / Westchester: $17/hour

  • Other regions: $16/hour

• Exempt Employee Salary Threshold:

  • NYC: $66,300

  • Other regions: $62,353.20

• Trapped at Work Act (Effective Dec 19, 2025): Bans Employment Promissory Notes. Compliance may be complex—review all existing agreements.

• NYC Paid Sick & Safe Leave Update (Effective Feb 22, 2026)

  • Adds 32 hours of unpaid sick/safe leave (available immediately)

  • Adds 20 hours of paid prenatal leave

• Credit History Ban in Hiring (Effective April 18, 2026): Most employers prohibited from using consumer credit reports in hiring decisions.

• Paid Family Leave Weekly Cap: $1,228.53

Washington

• Minimum Wage: $17.13/hour (highest in the U.S.)

• Exempt Employee Salary Threshold: $80,168.40/year

• Mandatory Harassment Prevention Training: Employers in hospitality, retail, security, and property services must provide harassment prevention training to relevant staff, covering misconduct reporting and anti-retaliation rights. Though not yet mandatory across all industries, it’s considered an essential HR compliance best practice.

• Paid Family & Medical Leave (PFML) Update:

  • Employers with 25+ employees must provide job protection

  • Employees now qualify after 180 days of employment (no longer need 1,250 work hours)

  • PFML contribution rate: 1.13%

• Domestic Violence Leave Expanded: Includes victims of hate crimes.

  
  

Texas

• Minimum Wage: Remains at federal minimum of $7.25/hour

• Exempt Salary Threshold: Federal court ruling maintains previous $35,568 threshold (blocks DOL increase).

• Increased OSHA Enforcement: Expect more audits in construction, oil & gas, and manufacturing.

• Noncompete Reform (SB 1318): Effective September 1, 2025; adjusts noncompete rules for healthcare professionals.

• Unemployment Insurance (HB 3699): Redefines “last work” for claims eligibility; effective Jan 1, 2026.

• Employee Gun Storage Rights (HB 1336): Employers receiving public funds cannot prohibit employees from storing legal firearms in locked personal vehicles.

New Jersey

• Minimum Wage:

  • Standard employers: $15.92/hour

  • Small/seasonal employers: $15.23/hour

• Pay Transparency Law (Effective June 1, 2025): Employers with 10+ employees must disclose salary range and benefits in job postings.

• Captive Audience Ban (Effective Dec 2, 2025): Bans mandatory meetings on political or religious topics.

• AI Hiring Guidelines: State Attorney General and Division on Civil Rights issue guidance on preventing algorithmic discrimination.

• TDI/FLI Weekly Benefit Cap: $1,119

• Unemployment Insurance Weekly Benefit Cap: $905

Practical Compliance Tips for Employers

To manage 2026 changes effectively, companies should:

• Review and update employee handbooks and HR policies to reflect new legal standards.

• Ensure all wages meet current minimum wage laws, and plan salary adjustments where needed.

• Re-evaluate exempt classifications under updated salary thresholds.

• Update job posting templates to comply with stricter pay transparency laws.

• Audit AI hiring tools and practices for potential bias or legal risks; consider an independent review.

2026 marks another wave of evolving employment regulation. Early planning, systematic compliance reviews, and proactive risk assessment will help your business remain stable and compliant amid ongoing legal shifts. Wishing you a smooth year ahead—with fewer HR headaches and more peace of mind for you and your team.

With labor laws and employment regulations rapidly evolving across multiple states in 2026, employers face heightened risks in wage compliance, employee classification, layoff procedures, and hiring practices. We invite you to contact the ILS legal team at contact@consultils.com for actionable, tailored compliance solutions aligned with your company’s specific operational needs.

Disclaimer: The materials provided on this website are for general informational purposes only and do not, and are not intended to, constitute legal advice. You should not act or refrain from acting based on any information provided here. Please consult with your own legal counsel regarding your specific situation and legal questions.

As Managing Partner at ILS, Richard Liu ranks among the leading U.S. attorneys in corporate, employment, and regulatory law. He is known for crafting legal strategies aligned with clients’ business objectives and advising Fortune 500 companies, startups, and executives on corporate transactions, financing, privacy, and employment matters across the technology, healthcare, and financial sectors.

Before founding ILS, Richard practiced at top defense firms, where he developed a reputation for anticipating risks and designing strategies that balance protection with growth. He has secured favorable outcomes in contract and intellectual property disputes, represented clients in state and federal courts, and is recognized for combining large-firm expertise with boutique-firm agility. Richard is also a frequent speaker at industry and legal conferences.

Email: contact@consultils.com | Phone: 626-344-8949