Regulatory change is accelerating faster than ever. As lawmakers advance new protections around wages, workplace safety, AI usage, and employee rights, HR teams face the challenge of staying compliant while continuing to support a fast-moving workforce.
To help you prepare, here are the key legal changes going into effect in early 2026 and how HR leaders can prioritize updates, reduce risk, and stay ahead of state and federal requirements.
10 Legal Changes to Prioritize in 2026
1. Rising Salary Thresholds for Overtime Exemption
While the federal threshold remains $684 per week, several states and localities are implementing higher standards.
- Washington is expected to rais the weekly threshold to $1,541.70 per week.
- New York City, Long Island, and Westchester County will increase theirs to $1,275 per week.
These changes require reclassification reviews and compensation adjustments to remain compliant.
2. Minimum Wage Increases Across Multiple Jurisdictions
States including Arizona, Connecticut, and Colorado will implement minimum wage increases in 2026. Multi-state employers should prepare for updated pay scales, wage compression considerations, and communication planning.
3. Noncompete Agreement Enforcement Shifts
Although the nationwide Federal Trade Commission (FTC) ban on noncompetes was overturned, states continue to pass their own restrictions.
Beginning January 2026, Montana will restrict noncompete agreements for licensed physicians except in limited scenarios, such as the sale of a practice.
4. New AI and Automated Decision-Making Regulations
States are moving quickly to regulate AI-assisted hiring, promotion, and performance assessment tools.
Illinois will require employers to:
- Notify candidates when AI is used in employment decisions
- Avoid AI tools that produce discriminatory outcomes
- Prohibit use of zip codes as a proxy for protected characteristics
Colorado will require:
- AI-impact assessments
- Opt-out rights for high-risk automated systems
These changes will require updates to vendor evaluations, candidate notices, and internal AI governance policies.
5. Paid Leave Program Launches and Expansions
2026 brings major changes nationwide:
- Delaware and Minnesota will launch paid family and medical leave programs.
- Washington, Connecticut, and New York City are expanding eligibility, benefit amounts, and job protections.
HR teams should prepare for new eligibility rules, payroll deductions, and updated leave administration workflows.
6. Strengthened Pay Transparency Requirements
California’s SB 642 introduces stricter compliance rules:
- Employers must provide “good faith” salary estimates tied specifically to the position
- “Wages” now include all compensation types
- Statue of limitations for pay equity claims extends from two to three years
Compliance Tip: Use VirgilHR’s Legal Library to quickly access definitions and step-by-step guidance for implementing new pay transparency rules.
7. Workplace Violence Prevention and Employee Protections
States are advancing legislation ahead of anticipated OSHA rules.
Beginning January 1, 2026, Illinois HB 1278 prohibits employers from disciplining or retaliating against workers who use employer-issues devices to record workplace violence incidents.
Organizations should review their retaliation, safety, and reporting policies.
8. New Reporting Requirements and Form Adjustments
Several 2026 updates will impact HR operations:
- The EEO-1 reporting window will be shorter than previous years
- Nonbinary reporting options will be removed to comply with Executive Order 14168
- Chemical manufacturers must update Safety Data Sheets (SDSs) and hazard labels by January 2026
- Employers must update hazard communication programs, training, and documentation to align with OSHA’s 2024 updates.
9. DEI Program Adjustments
Under Executive Order 14173, employers must avoid using quotas or targets in DEI programs. HR teams should shift toward integrated, process-focused strategies that promote fairness and inclusion without referencing protected characteristics.
10. New Training Requirements Across Multiple States
New state-level mandatory training laws will impact several industries in 2026:
- California AB 592: Pest control and prevention training for restaurant workers
- Illinois SB 1288: Celiac disease and gluten-free handling training
- Rhode Island HB 5563: Annual human trafficking awareness training for hotel employees
- Washington HB 1524: Annual sexual harassment training requirements
Annual training calendars and onboarding programs will need to be updated accordingly.
Compliance Tip: Conduct an annual employee handbook and training audit to ensure content aligns with new state laws and federal requirements.
How HR Teams Can Prepare for These Changes
To stay ahead of 2026 requirements, HR professionals should:
- Track federal, state, and local legal updates relevant to each location
- Use legal experts or compliance automation tools to interpret applicability
- Build checklists for each change, organized by deadline
- Update policies, handbooks, and communications
- Audit workplace practices especially pay, classification, safety, and leave workflows
Compliance Tip: For remote and multi-state teams, always verify differences in jurisdictional rules before applying policy updates.
Get Ahead of 2026 With the Right Compliance Support
With so many new laws taking effect, 2026 will be a demanding year for HR compliance. VirgilHR helps organizations stay prepared with:
- Real-time legal updates
- A built-in compliance calendar
- Guided, state-specific requirements
- An automated employee handbook builder
Schedule a demo today to see how VirgilHR can simplify your compliance efforts for 2026 and beyond.