With the calendar flipping to 2026, US employers face a range of new labour laws and amendments. These include minimum wage hikes, paid leave expansions and rules governing the use of AI.Further, a new weighting system in the H-1B lottery will prioritize higher-paid positions. And accommodation requests pertaining to mental health issues are emerging as a focus of scrutiny.
Adapting to the New Year
As 2026 begins, it’s crucial for employers to stay on top of the latest labor and employment trends. From state-level wage increases and paid leave expansions to changing visa rules, evolving AI in hiring, new regulations for retaliation and non-competes, and more, organizations need a clear understanding of how these changes could affect them and their employees.For example, in 2026, several states have rolled out paid family and medical leave laws that require employers to make payroll contributions to cover workers’ wages while they take time off. As those policies begin to take effect, companies should understand the contribution, notice and benefit administration requirements, as well as potential impacts on workforce planning.At the federal level, immigration policy continues to shift with renewed emphasis on targeting undocumented workers and limiting employer sponsorship through the Permanent Labor Certification Program (PERM). Meanwhile, the NLRB’s newly reconfigured membership may signal a return to prioritizing business interests over worker protections.Additionally, retaliation claims continue to rise, and recent developments at the EEOC point to more aggressive enforcement in this area. As such, it is critical that companies be ready to respond quickly to any allegations of retaliation. And, as mental health conditions, such as anxiety disorders and autism spectrum disorders, become more widely recognized as disabilities protected under the Americans with Disabilities Act, organizations should be prepared to evaluate and respond to accommodation requests for these impairments.
Taxes
The new tax code brings opportunities for tax reduction, but requires careful planning and adherence to the rules. For expats, the primary benefit, the Foreign Earned Income Exclusion (FEIE), may allow a single worker to exclude up to $149,000 in 2026 earnings if they meet residency and physical-presence requirements. Families with dependent children will also find that the new Child Tax Credit is a valuable savings opportunity.Employers must also prepare for increased inspection activity by the Office of Fraud Detection and National Security, a division of US Citizenship and Immigration Services whose mission is to detect and deter immigration fraud. The office will be implementing new procedures that require all H-1B visa sponsoring employers to undergo unannounced on-site inspections to ensure that a valid bona fide need exists for the work to be performed by the employee.A further reform is the planned reduction in statutory working time limits to 40 hours per week for all workers. This will have a significant impact on payroll systems and internal policies, and many organisations will need to reorganise work schedules. It will also affect premium pay for work carried out on mandatory rest days and public holidays, which will need to be increased in line with the new statutory rates. The government has published a 60-day Federal Register notice (FRN) to review the information collection requirements of the CW-1 application for temporary employment certification. This is the first of three rounds of re-reviews required to comply with the Paperwork Reduction Act.
Immigration
With the Trump 2.0 administration doubling down on immigration enforcement and the government taking steps to increase vetting of foreign national employees, it’s important that employers of international workers make clear and consistent communication with employees their top priority. Keeping employees up to date on policy changes and enforcement shifts will help them feel at ease, avoid stress and anxiety, and be prepared for the future.It is also crucial to note that the win-win economic effects of immigration are squandered when immigrants do not have full labor market rights. Research shows that workers with precarious or temporary status experience degraded wages and job quality, compared to their peers with lawful or permanent immigration status. The most obvious way to reverse this problem is by providing a quick and broad path to legal status (and eventually citizenship) for the millions of unauthorized immigrants. Doing so would provide them with a near-instant wage boost, bidding up wages in the labor markets they work alongside U.S.-born workers.Immigrants also contribute significantly to the tax base, paying $60 billion in federal taxes and $37 billion in state and local taxes, yet most benefits like Medicare are not available to them unless they become naturalized citizens or otherwise become legal residents. Addressing this issue should be another top priority for policymakers in 2026.
Employment
At the state level, expect continued movement toward higher minimum wage rates and expanded worker protections. New laws will likely introduce statutory bonus or seniority-related payments as well as new paid leave entitlements such as bereavement and preventative medical screenings. Employers should review payroll structures and employment contracts to ensure compliance with these changes and prepare to implement any necessary change management processes.As the US Equal Employment Opportunity Commission (EEOC) continues its focus on rooting out national origin discrimination, HR teams should take special care to avoid actions that could run afoul of Title VII, such as offering greater career development opportunities to visa holders or excluding them from layoffs to protect their immigration status. These actions may also violate the INA’s requirement that employers sponsor foreign workers only when there are no qualified U.S. applicants available.As a result of new ADA rulings, mental health issues such as anxiety disorders and PTSD are increasingly recognized as disabilities eligible for accommodation under the ADA. This means that organizations should be prepared for an increase in ADA claims relating to these conditions. Finally, in 2026, expect new rules to formally regulate work performed via digital platforms – covering transparency of engagement terms, limits on exclusivity for independent workers, identity verification and social security contribution requirements. For organizations active in this space, it will be critical to stay abreast of developments and prepare for the impending regulatory impact.