HR Compliance Considerations Employers Should Prioritize in 2026

Employment law compliance continues to grow more complex, particularly for employers managing multi-state teams, remote employees, and evolving workplace technologies. As 2026 unfolds, organizations should take a proactive approach to reviewing their HR practices to reduce risk, avoid penalties, and maintain employee trust.

Below is a practical overview of key HR compliance areas employers should be paying close attention to this year.

Wage & Hour Compliance Remains a Top Risk Area

Minimum Wage Changes

Minimum wage laws continue to shift at both the state and local level:

• More than a dozen states implemented minimum wage increases as of January 1, 2026
• Many counties and cities have higher local rates that may exceed state minimums
• Employers are required to pay the highest applicable wage, based on where the employee performs work—not where the company is headquartered

This is especially important for employers with remote or hybrid workforces, where employees may be working in jurisdictions with different wage requirements.

Exempt Salary Thresholds

While the federal exempt salary threshold has not changed, several states require significantly higher salaries for exempt employees, including:

• California
• Washington
• New York (varies by county)
• Colorado and Maine

Employers must ensure exempt employees meet both the salary threshold and the duties test under applicable federal and state law.

Exempt vs. Non-Exempt Classification: Common Pitfalls

Employee misclassification remains one of the most frequent sources of wage-and-hour violations.

Key reminders:

• Meeting the salary threshold alone does not guarantee exempt status
• Job titles do not determine classification—actual job duties do
• Employees who primarily follow set procedures or do not exercise independent judgment often fail the duties test

Misclassification can lead to:

• Back wages and unpaid overtime
• Penalties and interest
• Legal fees and compliance audits

Regular classification audits can help identify and correct issues before they escalate.

Pay Transparency and Pay Stub Requirements

Pay transparency laws continue to expand across the country:

• Dozens of states and local jurisdictions now require wage ranges to be disclosed in job postings or upon request
• Requirements vary significantly by jurisdiction  
• Employers posting remote roles may be subject to multiple state laws

In addition, several states have enhanced pay stub disclosure requirements, including:

• Clear explanations of pay codes
• Disclosure of available sick leave or PTO balances
• Rules governing digital pay stubs and employee consent

Employers should periodically review both job postings and payroll documentation to ensure compliance.

Non-Compete Agreements and Arbitration Compliance

Non-Compete Agreements

Non-compete laws have changed dramatically in recent years:

• Some states now ban non-compete agreements entirely
• Others limit enforceability based on employee income thresholds
• Continuing to issue unenforceable agreements can expose employers to penalties

Employers should review offer letters, employment agreements, and restrictive covenant language to ensure compliance with current law.

Arbitration Agreements

To remain enforceable, arbitration agreements should:

• Be presented as standalone documents
• Be clearly acknowledged by employees
• Avoid being buried within handbooks or onboarding materials

Improperly drafted or implemented agreements may not hold up if challenged.

Leave Laws, PTO Policies, and Break Compliance

Paid leave laws continue to evolve at a rapid pace:

• Multiple states now administer paid family and medical leave programs
• New programs launched in 2026, with additional states rolling out benefits in the near future
• Paid sick leave laws vary widely and may exist at both the state and local level

Employers should also remain vigilant about:

• Meal and rest break requirements
• Tracking and documenting compliance
• Ensuring PTO policies align with state-specific accrual, carryover, and payout rules
  
  

Remote Work and Multi-State Compliance Challenges

Even one remote employee can trigger new compliance obligations, including:

• Wage and hour laws
• Leave requirements
• Tax and payroll registration
• Workers’ compensation coverage

Best practices include:

• Tracking where employees physically work
• Requiring approval for out-of-state remote work
• Reviewing compliance obligations before approving location changes
  
  

AI in the Workplace: Emerging Compliance Considerations

As employers increasingly use AI-driven tools in recruiting and HR processes, new compliance obligations are emerging:

• Some states require disclosures when AI is used in employment decisions
• Others mandate bias assessments or audits of automated decision-making tools
• Employers remain responsible for ensuring AI tools do not discriminate or violate employment laws

Proactive review of AI usage can help reduce legal and reputational risk.

Immigration Compliance and HR Documentation

Immigration compliance continues to be an area of heightened enforcement:

• Employers should conduct periodic internal I-9 audits
• E-Verify requirements vary by state
• Virtual I-9 procedures remain available under specific conditions

Employee handbooks also remain a foundational compliance tool and should be reviewed regularly to reflect legal updates and organizational changes.

Looking for more information about how to get ahead of I-9 audits? Read our blog: Getting Ahead of I-9 Audits: Why Employers Should Act Now to Stay Compliant» 

Taking a Proactive Approach to HR Compliance in 2026

Given the pace of change, employers should prioritize:

• Regular wage and hour audits
• Policy and handbook reviews
• Remote work compliance tracking
• Agreement and documentation reviews
• Ongoing HR training for managers and leadership

Staying proactive can significantly reduce risk and position organizations for long-term success.

Want a Deeper Dive?

We invite you to watch our recent webinar with Susan Levi, CEO of Jinji HR, as she breaks down the key HR compliance updates, emerging regulatory trends, and common pitfalls organizations should watch for in 2026. Click here to watch  »