Many new or revised state law updates will go into effect in the coming months. Our Compliance experts have summarized regulations in your state that may impact your business.

Follow the quick links below to find your state:

FEDERAL UPDATE

Paid Family and Medical Leave

Effective January 1, 2026, the tax credit for employers that provide paid family and medical leave to employees is amended and made permanent. The credit is available for employers in states that do not have mandatory paid family and medical leave laws and, in states that do, to employers that provide more leave than required by law.

The credit is available to employers that:

• Have a written policy that offers at least two weeks of paid family and medical leave to full-time employees, and a prorated amount to part-time employees; and
• Pay eligible employees at least 50 percent of their hourly rate during the leave.

Family and medical leave means leave taken for one of the FMLA’s permissible reasons.

Qualifying employees are those who have been employed by the employer for at least 1 year (though an employer may choose to offer the benefit to those employed for at least 6 months). The employee must be customarily employed for at least 20 hours per week. A qualifying employee must not have earned more than a threshold amount for the employer to claim a credit for wages paid to the employee in the succeeding year.

Tax Credit

Eligible employers may take a 12.5 percent tax credit for wages they pay to qualifying employees using paid family and medical leave. An employer that provides greater than 50 percent of an employee’s hourly rate while the employee is on leave is eligible for an additional credit of up to 25 percent. The credit is available for every week of paid leave the employer provides, up to 12 weeks per year. An employer may claim the credit on IRS Form 8994. An employer may elect to have this section not apply for any taxable year, however.

Additionally, leave paid for or required by a state or local government (e.g., under paid family and medical leave or paid sick leave laws) is not taken into account when determining the amount of leave provided by the employer.

Employers may use the credit for wages paid to employees during leave or for any paid family and medical leave insurance premiums the employer has obtained.

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STATE LAW UPDATES

ALABAMA

AL: Short-Term Service and Disaster Response Employee Exemptions

Effective January 1, 2026, Alabama exempts nonresident employee compensation from state and local income tax and withholding for work performed in Alabama for 30 or fewer days, provided the employee worked in more than one state, and their state of residence offers a similar exclusion, has no income tax, or exempts the income by law.

Rundown of the Alabama state update

If a nonresident works more than 30 days in Alabama, all compensation for the entire year is subject to Alabama tax and withholding.

The exemption does not apply to professional athletes, entertainers, or public figures.

Compensation for nonresidents temporarily performing disaster or emergency-related services in Alabama is also exempt.

The Alabama Department of Revenue (DOR) will not assess interest and penalties on employers for failure to withhold if the employer either:

• Tracks daily work locations via a time and attendance system where employees report daily work locations outside the state, and the system facilitates proper allocation of compensation; or
• Relies on employees’ annual determinations of expected time in Alabama, provided the employer has no actual knowledge of fraud or collusion to evade taxation.

For these exemptions, an employee performs duties in Alabama for a day if they work more in Alabama than in any other state. Travel time is excluded. An employee working in their resident state and only one nonresident state is considered to have performed more duties in the nonresident state.

What this means for employers:

At the moment the employee hits day 31, all compensation paid to them for services performed in Alabama for the entire year—including the first 30 days—becomes subject to Alabama tax and withholding.

The New 30-Day Exemption Rule

You are relieved from the administrative burden of withholding Alabama state and local income tax for a nonresident employee if all of the following are true:

1. Time Limit: The employee performs duties in Alabama for 30 or fewer days in a calendar year.
2. Multi-State Worker: The employee performed duties in more than one state during the year (they aren’t just working in Alabama).
3. Reciprocity condition: The employee’s state of residence “plays fair.” That is, their home state either has a similar exclusion for Alabama residents working there, has no income tax at all, or explicitly exempts this income by law.

Who is Excluded? This 30-day rule does not apply to professional athletes, professional entertainers, or public figures. Their income is usually taxable from day one.

The “Tax Cliff” (Crucial for Payroll)

This is the most critical operational detail for employers. The exemption is an “all or nothing” proposition based on a cliff threshold.

If a nonresident employee works in Alabama for more than 30 days (i.e., 31 days or more) during the calendar year, the exemption completely vanishes retroactively.

How to Count an Alabama “Day”

To determine if a day counts toward the 30-day limit:

• Majority Rule: A day counts if an employee performs more duties in Alabama than in any other single state.
• Transit: Time spent only traveling through Alabama does not count.
• Tie-Breaker (Commuters/Hybrid): If an employee works a split day between their resident state and only Alabama, the day counts as an Alabama day.

Action Items for Employers Before 2026

• Review Timekeeping Systems: Determine if your current T&A system can handle daily location reporting by employees (if applicable). This is the gold standard for compliance.
• Develop Policies: If you cannot implement daily tracking, establish a formal process for nonresident employees to submit annual estimates of expected Alabama workdays at the start of the year.
• Monitor Travel: Establish internal triggers. If an employee is approaching 25 days in Alabama, supervisors and payroll need to be alerted that the “tax cliff” is imminent.
• Update Payroll Software: Ensure your payroll provider’s programming can handle the retroactive taxation when day 31 is reached.
• Determine Resident State Rules: You need to know if the employee’s home state meets the reciprocity conditions listed in the Section detailing exemptions. If their home state doesn’t have a similar rule, the 30-day Alabama exemption doesn’t apply to them.

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CALIFORNIA

CA: State Expands Crime Victim Leave Protections

Effective January 1, 2026, California allows an employee who is a victim of certain felonies and other crimes, or whose family member is a victim, to take time off to attend judicial proceedings related to the crime.

These protections add to California’s Healthy Workplaces, Healthy Families Act (HWHFA) and the Government Code related to leave for crime victims.

Los Angeles and Santa Monica permit eligible employees to use paid sick and safe time under their local ordinances for the same reasons as under the HWHFA.

CA: State Bans Stay-or-Pay Provisions in Employment Contracts

Effective January 1, 2026, California will broadly ban employers from enforcing training and retention repayment provisions (TRAPs) and other stay-or-pay clauses in employment agreements, deeming them contrary to public policy as restraints on lawful professions. This new law significantly limits the common employer strategy of requiring employees to repay training costs, visa fees, or other expenses upon early departure, allowing only particular, narrow exceptions.

The Main Areas

Effective January 1, 2026, you cannot include terms in an employment contract (or require a separate agreement) that penalize an employee for leaving. Specifically, the law prohibits:

• Charging for “Debt”: You cannot require a worker to pay for employment-related costs, education costs, or consumer financial products upon termination.
• Imposing Penalties: You cannot enforce “quit fees,” replacement hire fees, lost profit damages, or liquidated damages.
• Immigration Costs: You are explicitly banned from requiring reimbursement for immigration or visa-related costs if the employee leaves.

The Exceptions (When You Can Seek Repayment)

The law provides four specific “safe harbors” in which repayment agreements remain permitted. However, strict compliance requirements apply to each.

1. Transferable Credential Tuition: You can require repayment for tuition regarding a transferable credential (a degree or certification useful elsewhere), but only if ALL of the following apply:
   • Separate Agreement: It is not part of the main employment contract.
   • Voluntary: Getting the credential is not a condition of employment.
   • Fixed Cost: The repayment amount is specified upfront and does not exceed the employer’s actual cost.
   • Prorated: The debt decreases over time (proportional to time worked) and never accelerates upon termination.
   • No Repayment on Termination: If you fire the employee (for anything other than misconduct) or lay them off, they owe nothing.
2. Sign-On Bonuses / Cash Advance: You can claw back “discretionary or unearned” payments (like sign-on bonuses) paid at the start of employment, provided ALL of the following apply:
   • Separate Agreement: It is distinct from the employment contract.
   • Review Period: The employee has at least five business days to consult an attorney before signing.
   • No Interest: The debt cannot accrue interest.
   • Prorated & Capped: The repayment period cannot exceed two years, and the amount must be prorated based on time served.
   • Deferral Option: (Crucial Change) The worker must have the option to defer receiving the money until the end of the retention period to avoid the repayment obligation entirely.
   • Voluntary Exit Only: Repayment is only required if the employee quits or is fired for misconduct.
3. Government Loans: Contracts entered into under federal, state, or local government loan repayment/forgiveness programs are exempt.
4. Registered Apprenticeships: Enrollment in apprenticeship programs approved by the Division of Apprenticeship Standards is exempt.

The Risks of Non-Compliance

If you attempt to enforce a prohibited TRAP or stay-or-pay provision after the effective date, the penalties are significant:

• Civil Action: Employees can sue individually or as a class.
• Damages: You may be liable for actual damages OR $5,000 per worker (whichever is greater).
• Legal Fees: You will be responsible for the employee’s attorney’s fees and costs.
• Injunctive Relief: The court can order you to stop the practice immediately.

Next Steps for Employers

• Review Retention Strategies: If you currently rely on training costs to keep employees from leaving, switch to positive retention incentives (culture, compensation, career pathing) rather than punitive financial locks.
• Revise Bonus Agreements: Your sign-on bonus agreements likely need redrafting to include the mandatory “deferral option” and the 5-day review period notification.
• Update Handbooks: Ensure no language in your employee handbook implies that workers owe money for general training, uniforms, or administrative costs upon termination.

Given the intricate nature of California law, we recommend consulting with your employment law attorney for guidance regarding these updates.

CA: State Amends Equal Pay Remedies

Effective January 1, 2026, the statute of limitations under the California Equal Pay Act (CEPA) lengthens to three years after the last date of an alleged violation (formerly two years, except for willful violations). The CEPA amendments do this:

• Allow an employee to obtain relief for the entire time period of an equal pay violation, up to six years.
• Specify when a CEPA violation occurs for the purpose of applying the statute of limitations.
• Adopt new definitions of wages, wage rates, and sex; and
• Modify the prohibition against sex-based pay discrimination to specify that an employer may not pay an employee less than the wage rate paid to an employee of another sex (instead of the opposite sex) for substantially similar work.

CA: State Amends Pay Transparency Law

Effective January 1, 2026, significant amendments to the California pay transparency law will take effect, specifically providing a more precise definition of the term “pay scale.” This change enhances compliance and provides greater clarity for both employers and job seekers.

New Definition of “Pay Scale”

The amended law specifies that “pay scale” will now be defined as a good-faith estimate of the pay range that the employer reasonably expects to pay for the position upon hire.

This new definition emphasizes two critical components:

1. Good Faith Estimate: Employers must make a genuine effort to determine the realistic compensation range for the advertised position. Base this estimate on factors such as market data, internal equity, the required experience and skills, and the company’s established compensation structure. It moves beyond a nominal or token range and requires a sincere effort to accurately reflect potential pay.
2. Upon Hire: The pay scale must reflect the compensation the employer anticipates offering the successful candidate at the time of hire. This clarifies that the requirement focuses on the initial compensation for the open role.

Next Steps for Employers

• Employers operating in California must update their hiring and posting procedures to ensure compliance with this more precise definition when advertising positions or providing pay scale information upon request from applicants. Failure to provide a pay scale that constitutes a “good faith estimate” may expose employers to enforcement action under the state’s labor laws.

CA: State Grants Employees Access to Education and Training Records in Personnel Files

Effective January 1, 2026, California requires employers that maintain education and training records to include them in personnel files. The employer must make these files available for inspection by that employee. This applies to current or former employees and their representatives upon request.

CA: REMINDER- Employers to Register with CalSavers Retirement

CalSavers Employer Registration and Compliance Requirements

Registration Deadlines:

• Current Requirement: All eligible employers with five or more employees must already be registered with CalSavers.
• Upcoming Deadline: Employers with at least one eligible employee must register by December 31, 2025.

For further details, refer to the CalSavers Frequently Asked Questions.

Methods of Registration: Employers have several options for registration:

• Online
• By phone
• By regular mail
• By overnight mail

Employee Information Submission:

Within 30 days of registration, employers must provide CalSavers with the following personal information for each eligible employee:

• Full name
• Social Security number or Individual Taxpayer Identification Number (ITIN)
• Date of birth
• Physical address
• Phone number (if available)
• Email address(es) (if available)

New Hires:

For every newly hired employee, the employer must submit the required personal information to CalSavers within 30 days of the hire date.

Mandatory Employee Materials:

Employers must provide informational materials to both existing eligible employees and new hires at the time of hire. You can access these materials on the CalSavers resources page.

Resources

• Employer Overview
• Communication to your employees
• Program Disclosure Booklet
• Employee Information Packet

Notice

• Not all employers are required to participate. Only employers who do not sponsor a retirement plan and have one or more California employees must join CalSavers. If you already offer a qualified retirement plan and have received a notice to register, please inform us of your exemption on the employer portal.
• If your company does not participate in Nextep’s Retirement Plan, you are required to register for CalSavers.

Should you have any questions, please contact our Retirement Team at Nextep at 401k@nextep.com

CA: State Requires Employee Rights Notices

Effective February 1, 2026, all California employers must provide written notice to both current employees and new hires outlining their workplace rights. Specifically, the notice must cover:

• Workers’ compensation rights
• Rights related to immigration status
• Rights regarding union organization and protected concerted activity
• Constitutional rights when interacting with law enforcement at work

Key points for employers:

• Distribution: You must give the notice to all current employees and new employees at the time of hire.
• Content: The notice must clearly explain the above rights. The California Department of Industrial Relations Labor Commissioner will publish a template notice by January 1, 2026, which employers can use to ensure compliance.
• Timing: Employers must be ready to distribute this notice by February 1, 2026.
• Compliance: Failing to provide this notice could result in penalties or enforcement actions by state authorities.

Next steps for employers:

• Monitor the Department of Industrial Relations website for the official template notice, expected by January 1, 2026.
• Prepare to update onboarding and employee communication processes to include this notice.
• Plan to distribute the notice to all current employees before the February 1, 2026, deadline.

If you need assistance with implementation or want to prepare a distribution plan in advance, please reach out to your HR Business Partner.

The State of California has not yet released the official “Workplace Know Your Rights Act” notice template. The law requires the Department of Industrial Relations Labor Commissioner to publish the template by January 1, 2026. Employers should monitor the Department’s website for updates and prepare to distribute the notice once it becomes available.

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COLORADO

CO: State Amends Paid Family and Medical Leave

Effective for leave starting on or after January 1, 2026, an employee may take an additional 12 weeks of paid family and medical leave to cover the time during which their child receives inpatient care in a neonatal intensive care unit (NICU).

This 12-week period is in addition to the current 12-week maximum for other paid family and medical leave reasons.

In addition, Effective January 1, 2026, regulations implementing the paid family and medical leave law will be amended.

Key Clarifications and Amendments:

• Neonatal Leave:
  • This leave is defined as leave to care for a family member with a serious health condition, separate from leave for a new child. Employers must classify NICU leave as “care for a family member with a serious health condition.” It is not considered “bonding” leave (leave to care for a new child).
  • It is available only for the time the infant is in a Neonatal Intensive Care Unit (NICU).
  • The 12-week maximum is calculated per infant.
  • Employees are eligible for this leave even if the infant was admitted to the NICU or the employee took FAMLI leave to care for the infant prior to January 1, 2026. 
• Reduced Leave Schedule:
  • The definition is amended to mean a “fixed and specific” leave schedule that lowers an employee’s usual number of working hours per workweek or workday. 

Interaction with Other Benefits and Leave:

• Disability Benefits (STD/LTD): An employer may require an employee to use all available FAMLI leave before receiving short-term disability (STD) or long-term disability (LTD) benefits, subject to the terms of the benefits policy. However, an employer cannot require an employee to use all STD or LTD benefits before accessing FAMLI benefits.
• Other Required Leave: Employers cannot mandate employees to use FAMLI leave before accessing other required leave (e.g., FMLA or Colorado HFWA).

Action Items for Employers

• Update Policy Handbooks: Ensure your leave policies reflect the “Fixed and Specific” requirement for reduced schedules effective Jan 1, 2026.
• Review Disability Coordination: Review your STD/LTD plan documents. If you want to prevent “double dipping” or stack the benefits, you can mandate FAMLI first, but you cannot block access to FAMLI by forcing them to use disability insurance first. Reach out to your HR Business Partner for assistance.
• Train Managers/HR: Ensure those managing leave requests understand that NICU stays are categorized as “Serious Health Conditions,” distinct from standard bonding time.

CO: State Lowers Paid Family and Medical Leave Premium Contribution Rate

Effective January 1, 2026, the PFML premium contribution rate is 0.88% of wages per employee (reduced from 0.9%). Starting with calendar year 2027, the rate will be set by September 1 for (and published before January 1 of) the following calendar year.

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CONNECTICUT

CT: State Expands Paid Sick Leave Employer Coverage

Effective January 1, 2026, the Connecticut Paid Sick Leave law expands to cover your business if you have 11 or more employees. This is the second phase of a larger rollout (which started with 25+ employees in 2025 and will cover all employees by 2027).

Here is a checklist of what you should do to prepare for this specific deadline.

Employer Checklist

• 1. Confirm Your Employee Count
  • The Rule: You are covered if you have 11 or more employees on your payroll during the week containing January 1, 2026.
  • Who Counts: This includes nearly all employees (full-time, part-time, per diem), not just “service workers” as in previous years.
  • Exclusions: Seasonal employees (those who work 120 days or less per year) and certain unionized construction workers are typically excluded from the count.
• 2. Update Your Sick Leave Policy
  • If you already offer PTO or sick leave, ensure it meets these minimums by January 1, 2026.
    • Accrual Rate: Employees must accrue 1 hour of paid sick leave for every 30 hours worked (increased from the old 1:40 ratio).
    • Annual Maximum: You must allow accrual of up to 40 hours per year.
    • Carryover vs. Frontloading:
      • Option A (Accrual): Employees accrue time as they work. You must allow them to carry over up to 40 unused hours to the following year.
      • Option B (Frontloading): You give employees the full 40 hours immediately at the start of the year. If you do this, you do not have to allow carryover.
    • Waiting Period: New hires can be required to wait until the 120th calendar day of employment to use the leave (though they begin accruing immediately).
• 3. Prepare Required Notices
  • Written Notice: You must provide written notice to each employee by January 1, 2026 (for existing staff) or at the time of hire (for new staff). This notice must detail their entitlement to sick leave, the accrual rate, and protection against retaliation.
  • Workplace Poster: You must display the official CT Paid Sick Leave poster in English and Spanish in a conspicuous place. (If you have remote workers, sending this electronically or posting it on the company intranet is permitted.)
• 4. Adjust Your Payroll & Recordkeeping
  • Paystub Transparency: You are required to provide employees with ongoing written updates on their sick leave status.
  • Best Practice: Include the accrued hours and used hours directly on their pay stubs.
  • Compliance Note: While the CT DOL has indicated this doesn’t strictly have to be on the physical pay stub, you must strictly maintain these records and make them accessible to employees. Putting it on the paystub is the safest and easiest way to comply.
  • Record Retention: Keep records of hours worked, leave accrued, and leave taken for at least 3 years.
• 5. Review Permitted Uses (Expanded)
  • Ensure your managers know that employees can now use sick leave for broader reasons, including:
    • Mental Health: A “mental health wellness day” (no illness required).
    • Family Members: Care for a spouse, child, sibling, grandparent, grandchild, or parent.
    • Safe Leave: Reasons related to family violence or sexual assault.
    • Public Health: Closure of the workplace or a family member’s school/care facility due to a public health emergency.

Important “Don’ts”

• Documentation: You generally cannot require the employee to provide documentation (e.g., a doctor’s note) to prove the leave was for a valid reason.
• Replacements: You cannot require an employee to find a replacement worker to cover their shift as a condition of taking leave.

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DELAWARE

DE: REMINDER-Paid Family and Medical Leave Benefits Begin

Effective January 1, 2026, the Healthy Delaware Families Act (HDFA) mandates that certain Delaware employers provide paid family and medical leave (PFML) benefits to their eligible employees. This legislation signifies a significant expansion of worker protections in the state. On January 1, 2025, Nextep started collecting contributions from employers to finance Paid Family and Medical Leave (PFML) benefits.

Covered Employers

The HDFA applies to employers with 10 or more employees who worked in Delaware during the previous 12 months, regardless of the employer’s location.

An employer that leases workers from a professional employer organization is a covered employer of those workers.

The HDFA does not apply to a business that closes in its entirety for 30 consecutive days or more per year.

The type of leave available to employees depends on the employer’s size:

• Employers with 10 to 24 employees are only required to provide parental leave.
• Employers with 25 or more employees must provide parental, family caregiving, and medical leave.

If the employer size drops below 10 or 25, required HDFA leave must continue until the employee count stays below the threshold for four consecutive quarters. If the count ever exceeds nine or 24, the employer must resume providing HDFA leave for at least the next four consecutive quarters.

The HDFA establishes three categories of paid leave for which eligible employees may receive benefits:

Leave Categories

1. Parental Leave:
   • Purpose: To bond with and care for a child during the first year following the child’s birth, adoption, or placement for foster care.
2. Family Caregiving Leave:
   • Purpose: To care for a family member (as defined by the Act) with a serious health condition or for a qualifying exigency arising out of a family member’s military service.
3. Medical Leave:
   • Purpose: For the employee’s own serious health condition that prevents them from being able to perform the essential functions of their job.

Employers were to provide written notice of PFML rights to all Delaware-based employees by December 1, 2024 (30 days before contributions begin on January 1, 2025).

Exception: If an employer covers the full contribution cost or uses a private plan, the notice deadline is December 1, 2025 (30 days before benefits start on January 1, 2026), according to rules effective February 10, 2025.

Additional Notice Requirements:

Written notice is also required:

• Upon hire.
• When an employee requests leave or when the employer knows leave may be for a qualifying event.

Notice Content

The notice must detail:

• Employee’s right to and terms of PFML benefits.
• Amount of PFML benefits.
• Claim filing procedure.
• Right to job protection and benefits continuation.
• Protection against discrimination/retaliation for using PFML.
• Right to file a complaint for violations.
• Whether benefits are provided via the state or an approved private plan.

Delivery

Notice can be electronic (work or provided personal email) per Rule 11.5.

Poster: Employers must display and maintain a poster with the above information in a conspicuous, accessible location. The poster must be in English, Spanish, and any language spoken by at least five percent of the workforce, if provided by the DDOL.

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DISTRICT OF COLUMBIA

DC: Requires Additional Pay Statement Information

Effective January 1, 2026, tipped wage workers’ pay statements must include a list of sources of the employees’ compensation in addition to base wages and gratuities, including bonuses, commissions on sales, any amount calculated as a percentage of service charges, or other sources.

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ILLINOIS

IL: State Restricts AI in Employment Decisions

Effective January 1, 2026, the Illinois Human Rights Act (IHRA) is amended to limit the use of artificial intelligence (AI) in employment decisions. Specifically, the following are classified as discriminatory employment practices:

• Use of artificial intelligence (AI) in recruiting, hiring, promotion, or other employment decisions that has the effect of subjecting employees to discrimination on the basis of a protected class;
• Use of ZIP codes as a proxy for protected classes as defined under the IHRA; and
• Failure to provide notice to an employee that the employer is using AI for employment decisions.

IL: State Amends Victims’ Economic Security and Safety Act

Effective January 1, 2026, Illinois amends the Victims’ Economic Security and Safety Act (VESSA). The amendment prohibits employers from taking retaliatory action against an employee for using employer-issued equipment to record violence. 

Specifically, they cannot fail to hire, refuse to hire, discharge, constructively discharge, harass, discriminate, or retaliate against any employee. This protection applies when the employee has used employer-issued equipment to record incidents of domestic violence, sexual violence, gender violence, or any other crime of violence. This includes acts committed against the employee or a family or household member of the employee.

Additionally, an employer may not deprive an employee of employer-issued equipment solely because the employee used or attempted to use it to record the types of events described above. An employer must grant an employee access to any photographs, voice or video recordings, sound recordings, or other digital documents or communications stored on an employer-issued device that relate to such events.

IL: State Adds Protections for Employee Concerted Activities

Effective January 1, 2026, significant amendments to the Illinois Workplace Transparency Act (IWTA) will alter Illinois employment law, boosting employee rights, transparency, and the ability to engage in concerted activity.

The amendments restrict agreements that prohibit employees (current, prospective, or former) from engaging in concerted activity for collective bargaining or mutual aid, reinforcing NLRA-like principles.

Employee protections are expanded:

• Expanded Disclosure Rights: Broadens the right to disclose and discuss “unlawful employment practices,” including harassment, discrimination, and wage violations.
• Protection for Testimony: Strengthens protection for employees who testify in proceedings related to unlawful employment practices.

The IWTA now prohibits the unilateral inclusion of certain clauses—such as specific non-disparagement or confidentiality provisions—in employment contracts, settlement, and termination agreements.

Finally, the amendments enhance legal remedies for employees by explicitly allowing recovery of “consequential damages” in lawsuits challenging or enforcing a contract under the IWTA.

Here is a breakdown of what these changes mean for your business, along with the specific actions you should consider taking before the deadline.

Key Points

1. “Concerted Activity” is Now Explicitly Protected

Previously, the IWTA focused primarily on harassment and discrimination. The 2026 amendments expand this to protect “concerted activity,” a term borrowed from labor law (the National Labor Relations Act).

• What it means: You cannot have any agreement (employment contract, separation agreement, handbook policy) that stops employees from acting together to improve working conditions.

2. “Unlawful Employment Practices” Definition Expanded

The scope of what employees are permitted to disclose is significantly expanding. Previously, this primarily encompassed civil rights violations, such as harassment and discrimination.

• New Scope: It now includes any violation of state or federal employment law. This covers wage and hour disputes (unpaid overtime), workplace safety violations (OSHA), and family leave violations (FMLA/VESSA).
• Impact: You cannot use a Non-Disclosure Agreement (NDA) or settlement to silence an employee regarding any alleged violation of employment law, not just harassment.

3. New Strict Rules for Settlement & Separation Agreements

If you are paying an employee to leave or settle a dispute, and you want confidentiality, the rules are stricter:

• Separate Consideration Required: You can no longer lump confidentiality into the general severance payment. You must allocate a specific, separate sum of money in exchange for the confidentiality clause.
  • Example: Instead of “$10,000 for release of claims and confidentiality,” your agreement might need to say “$10,000 for release of claims AND $500 specifically for the confidentiality provision.”
• No Unilateral “Employee Preference”: You cannot put a standard sentence in the agreement saying, “The employee agrees that confidentiality is their preference.” The confidentiality must actually be the employee’s preference, and you cannot unilaterally assert it in the drafting.

4. Prohibited Contract Clauses (Unilateral Conditions)

You cannot force employees to sign “take-it-or-leave-it” contracts that include the following provisions regarding unlawful employment practices:

• Shortened Statutes of Limitations: You cannot contractually reduce the time an employee has to sue you.
• Non-Illinois Law/Venue: You cannot force an Illinois employee to litigate a claim in another state or under another state’s laws (e.g., “This contract is governed by Delaware law”).

5. Increased Financial Risk: “Consequential Damages.”

The amendments allow employees to recover consequential damages if they successfully challenge a contract that violates the IWTA.

• What this means: Historically, damages might be limited to attorney’s fees or specific statutory fines. “Consequential damages” opens the door for employees to claim secondary financial losses arising from your restrictive contract (e.g., “I couldn’t get a new job because your void non-compete/non-disparagement clause scared off a recruiter, costing me $100k in salary”).

What Should Employers Do Next

• Review Employment Agreements: Audit all offer letters, employment contracts, and restrictive covenants. Remove clauses that shorten statutes of limitations or mandate non-Illinois venue/law for employment claims.
• Update Handbooks: Check “Conduct” and “Social Media” policies. Ensure they do not ban employees from discussing wages, working conditions, or safety issues (concerted activity).
• Revise Separation Templates: Critical: Update your standard severance/settlement agreement to include a line item for separate financial consideration for confidentiality.
• Train HR & Management: Ensure managers understand they cannot discipline employees for discussing work issues (wages/safety) with one another, as this is now protected under state law, not just federal labor law.

Given the intricate nature of Illinois law, we recommend consulting with your employment law attorney for guidance regarding these updates.

IL: State Requires Paid Lactation Breaks

Effective January 1, 2026, Illinois amends the Nursing Mothers in the Workplace Act to require covered employers to compensate employees at their regular rate of compensation during lactation/breastfeeding breaks. Employers may not require employees to use paid leave during lactation/breastfeeding breaks, or reduce their compensation during those breaks.

IL: State Amends Organ Donor Leave Eligibility

Effective January 1, 2026, the Illinois Employee Blood and Organ Donation Leave Act is amended to allow part-time employees to use up to 10 days of paid leave to donate an organ and provide guidance on compensating part-time employees for the leave days used.

IL: State Expands Unemployment Eligibility 

Effective January 1, 2026, Illinois employees are eligible for unemployment insurance benefits when they voluntarily leave work after being deemed unable to perform the work by a licensed provider due to a mental health disability, and the employer is unable to accommodate the individual. 

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LOUISIANA

LA: State Increases Short-Term Service Nonresident Withholding

Effective January 1, 2026, Louisiana has increased the short-term-service nonresident employee withholding exemption threshold from 25 days to 30 days.

This means Louisiana employers are not required to withhold income taxes from wages paid to nonresident employees who meet two conditions: they perform work in more than one state, and they work in Louisiana for 30 or fewer days (up from 25) during the calendar year.

However, if a nonresident employee, while working for the employer or any related entity, exceeds the 30-day (previously 25-day) threshold in the calendar year, the employer must withhold and remit tax for all wages paid for work performed in Louisiana during that calendar year. This includes wages paid for the first 30 days (previously 25 days) the employee worked in the state.

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MAINE

ME: State Requires Coverage of Nonprescription Contraception

Effective January 1, 2026, Maine employers that issue or renew a group health plan on or after January 1, 2026, must ensure that the plan provides coverage for nonprescription oral hormonal contraceptives and nonprescription emergency contraception. Previously, coverage was required only for prescription contraception.

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MICHIGAN

MI: Unemployment Insurance Weekly Amount Increase

Beginning January 1, 2026, the maximum weekly unemployment benefit amount is $530. Beginning January 1, 2027, the maximum weekly benefit amount is $614.

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MINNESOTA

MN: State Enacts Paid Leave Program

Effective January 1, 2026, Minnesota will implement a state-run Paid Family and Medical Leave (PFML) program. This program requires employers and employees to contribute to a fund that provides eligible employees with up to 20 weeks of paid leave per benefit year for qualifying family and medical reasons.

Breakdown:

The Minnesota Paid Leave Law establishes a paid family and medical leave (PFML) insurance program funded by employer and employee contributions.

Employee Eligibility

As amended, an employee is an individual who meets specific financial eligibility requirements and who performs services for an employer, and at least 50 percent of their work is either:

• Performed in Minnesota; or
• Not performed in Minnesota or any other state within the United States or United States territory or foreign nation, but some of the employment is performed in Minnesota, and the employee resides in Minnesota during 50 percent or more of the calendar year.

Qualifying Reasons for Leave

Eligible employees can take PFML starting on January 1, 2026. PFML may be used for the following reasons:

• The employee’s or their family member’s serious health condition, including a physical or mental illness, injury, impairment, or condition;
• Medical care related to the employee’s pregnancy, including prenatal care or incapacity due to pregnancy or recovery from childbirth, stillbirth, miscarriage, or related health conditions;
• Bonding time spent by an employee with a biological, adopted, or foster child within 12 months of the child’s birth, adoption, or placement;
• Safe leave, meaning absences due to domestic abuse, sexual assault, or stalking of the employee or the employee’s family member, to:
  • Seek medical attention related to the physical or psychological injury or disability caused by domestic abuse, sexual assault, or stalking;
  • Obtain services from a victim services organization;
  • Obtain psychological or other counseling;
  • Relocate; or
  • Seek legal advice or take legal action (e.g., prepare for or participate in a civil or criminal legal proceeding);

• To care for a family member who is a military member, and
• For a qualifying exigency, if a family member who is a military member serves in active duty or receives notice of an impending call or order to active duty in the United States armed forces, including:
  • Providing care or other needs for the family member’s child or other dependent;
  • Making financial or legal arrangements for the family member;
  • Attending counseling;
  • Attending military events or ceremonies;
  • Spending time with the family member during a rest and recuperation leave or following return from deployment; or
  • Making arrangements following the military member’s death.

Duration of Leave

In a single benefit year, an employee may qualify for up to 12 weeks of PFML for a serious health condition and up to 12 weeks for bonding, family care, safe leave, or a qualifying exigency, for a combined total of 20 weeks of PFML per benefit year.  For example, an employee may take 12 weeks of PFML for a serious health condition and later in the same benefit year, take eight additional weeks for bonding time, family care, safe leave, or a qualifying exigency.

As amended, benefit year means the period of 52 calendar weeks beginning on the effective date of the employee’s leave.

There is no waiting period; however, except for bonding leave, an employee must be out of work for at least seven calendar days to be eligible for PFML benefits.

An employer cannot require an employee to find a replacement worker to cover their shift as a condition of taking PFML. 

Leave may be taken consecutively or intermittently. However, PFML for a serious health condition can be taken intermittently only if an intermittent schedule is reasonable and appropriate.

Key Features:

• Contribution Requirement:
  • Both employers and employees contribute to the PFML fund.
  • Contributions begin January 1, 2026.
• Benefit Availability:
  • Eligible employees can begin taking PFML benefits on January 1, 2026.
  • Up to 20 weeks of leave are available per benefit year.
• Wage Detail Reporting:
  • Quarterly wage detail reporting is required, starting October 31, 2024.
• Contribution Deposits:
  • Employers must begin depositing premium contributions with the Department of Employment and Economic Development (DEED) by April 30, 2026, for wages earned from January 1 to March 31, 2026.
• Pay Statement Requirements:
  • Pay statements must show the employer’s and employee’s PFML contribution amounts, starting January 1, 2026.
• Antiretaliation and Notice:
  • Antiretaliation protections and employer/employee notice requirements take effect on November 1, 2025.

Employer Requirements Breakdown:

• Quarterly Wage Detail Reporting (Effective October 31, 2024):
  • Employers must begin providing quarterly wage detail reports to the DEED. This is a preparatory step for calculating and tracking PFML contributions.
• Antiretaliation and Notice (Effective November 1, 2025):
  • Employers must comply with antiretaliation provisions, ensuring they do not penalize employees for taking or requesting PFML.
  • Employers must provide employees with necessary notices about the PFML program, including their rights and obligations.
• Contribution Collection and Payment (Effective January 1, 2026):
  • Employers must begin collecting PFML contributions from employees’ wages.
  • Employers must also begin contributing their portion of the PFML premiums.
  • Employers must update payroll systems to reflect these new deductions and contributions.
  • Employers must add the employees’ and employers’ PFML contribution amounts to each employee’s pay statement.
• Contribution Deposits (Effective April 30, 2026):
  • Employers must deposit the collected employee and employer PFML contributions with the DEED.
  • The first deposit is due April 30, 2026, and covers wages earned from January 1, 2026 through March 31, 2026.
  • Subsequent deposits will follow a quarterly schedule.

Key Dates Summary:

• October 31, 2024: Quarterly wage detail reporting begins.- Nextep will report
• November 1, 2025: Antiretaliation and notice requirements take effect.- Nextep will provide to clients once available 
• January 1, 2026: Contributions begin, benefits become available, and pay statements must reflect contributions.
• April 30, 2026: First contribution deposit deadline.

Resources:

• Minnesota Paid Leave Program
• Minnesota Paid Leave Overview
• Minnesota Paid Leave Poster
• FAQs
• Sample Employee Notice

Minnesota employers must familiarize themselves with these requirements. Nextep will work to ensure that any required changes comply with this law. 

MN: State Amends Meal and Rest Break Requirements

Effective January 1, 2026, Minnesota’s wage and hour law is amended to require employers to provide:

• A paid rest break of at least 15 minutes or enough time to utilize the nearest convenient restroom, whichever is longer, within each four consecutive hours of work; and
• An unpaid meal break that is at least 30 minutes when working six or more consecutive hours.

Employers that fail to provide the required meal and/or rest breaks are liable to the employee for the meal and/or rest break time that should have been allowed at the employee’s regular rate of pay, plus an additional equal amount as liquidated damages.

MN: State Amends Paid Sick and Safe Time

Effective December 31, 2025, the Minneapolis Sick and Safe Time Ordinance (MSSTO) is amended to align with the state’s Earned Safe and Sick Time law.

Key Amendments:

• Employer Coverage: All employers must now provide paid sick leave; the unpaid leave option for employers with fewer than six employees is removed.
• Employee Eligibility: Employees anticipated to work at least 80 hours in Minneapolis annually are eligible. Certain volunteers and elected officials remain ineligible.
• Qualifying Reasons: New qualifying reasons include leave after a family member’s death. Reasons related to public health emergencies or unexpected closures are expanded to include workplace/school closures due to weather/emergency, and an employee’s inability to work due to exposure or testing for a communicable illness. Exceptions apply for certain emergency-response employees.
• Family Members: The definition of “family member” is expanded to include a parent’s sibling, a sibling’s child, in-laws, family members of a spouse/domestic partner, any other blood relative or equivalent close association, and up to one annually designated individual.
• Accrual and Use: Employees can now accrue leave in fractions of an hour and use it as it accrues (no 90-day waiting period). Increment sizes are 15 minutes to 4 hours. Advanced time must be based on anticipated work for the remainder of the accrual year.
• Frontloading: Employers can frontload 48 hours if paying out unused accrued time, or 80 hours if not.
• Compensation: Leave is paid at the employee’s base rate (replacing the “regular rate”), excluding commissions, bonuses, and various premium payments. Health coverage must be maintained during leave, with the employee continuing to pay their share. Returning employees must retain the same pay rate and benefits/seniority as if no leave occurred.
• Rehired Employees: Employers must immediately reinstate accrued, unused leave if the employee is rehired within 180 days (up from 90). Successor employers must retain accrued leave for employees hired within 30 days of termination by the original employer.
• Employee Notice and Documentation: For unforeseeable leave, employees must provide notice “as soon as reasonably required by the employer.” Employers requiring advance notice must have a written policy. Documentation for absences over two (previously three) consecutive days may be required. Documentation requirements are clarified based on the reason for the absence. Written statements in the employee’s first language are acceptable when specific professional documentation is unavailable.
• Employer Notice and Statement: Employers must provide new hires with a detailed notice in English and the employee’s primary language, posted in paper/electronic form, or on an online platform, and include it in any employee handbook. At the end of each pay period, employees must receive a statement of available and used sick and safe time hours.
• Recordkeeping: Records must be kept accessible for the Civil Rights Department within 72 hours.
• Confidentiality: Information regarding the employee’s use of leave, and related statements/documentation, must be kept confidential, separate from the personnel file, and may be requested for destruction after 3 years.
• Prohibited Actions: Absence control policies cannot count MSSTO leave as an absence leading to adverse action. Explicitly referencing the MSSTO is not required to protect against retaliation.
• Enforcement: The complaint filing period is extended to three years (up from 365 days), and employees gain the right to file a civil action.
• Interaction with Other Laws: The MSSTO does not preempt more generous benefits. Most paid time off in excess of the minimum MSSTO requirement must meet MSSTO standards, except for notice and documentation. Collective bargaining agreements can waive specific provisions for building and construction trades.

Resources:

• FAQs
• Employee Notice
• Comparison of ESST and Paid Leave

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NEW HAMPSHIRE

NH: Childbirth, Postpartum, and Infant Care Leave Law Takes Effect

Effective January 1, 2026, New Hampshire law requires employers with 20 or more employees to provide up to 25 hours of unpaid leave for specific medical appointments.

Purpose of Leave:

• Attending the employee’s own medical appointments for childbirth or postpartum care.
• Attending the employee’s child’s pediatric medical appointments within the first year following the child’s birth or adoption.

Key Provisions:

• Combined Leave for Same Employer: If both parents work for the same employer, the combined total leave they can take is limited to 25 hours during the child’s first year.
• Substitution of Paid Leave: Employees may substitute any accrued vacation time or other appropriate paid leave for any portion of the unpaid leave taken under this law.
• Notice and Scheduling: Employees must provide the employer with reasonable advance notice when requesting leave and must make a reasonable effort to schedule appointments so as not to disrupt the employer’s operations unduly.
• Documentation: The employer has the right to request documentation from the employee to verify that the time is being used for the intended purpose.
• Job Restoration: Upon the employee’s return from leave, the employer must restore them to their original job.

Employer Consideration:

• Covered employers are advised to include a medical appointments leave policy in their employee handbook. This will help educate employees, including supervisors, about the availability of leave for childbirth, postpartum, and infant care medical appointments, and demonstrate compliance with New Hampshire law.

NH: Family Military Leave Law Takes Effect

Effective January 1, 2026, employers with 50 or more employees at the same location in New Hampshire may not terminate, refuse to hire, or take any adverse employment action against an employee based on the involuntary mobilization of the employee’s spouse in response to a declaration of war, national emergency, or contingency operation. 

An employee’s leave of absence due to their spouse’s involuntary mobilization is unpaid, and the employee is generally entitled to be reinstated to the same or a comparable position.

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NEW YORK

NY: State Increases Paid Family Leave Contribution Rates

Effective January 1, 2026, the state Paid Family Leave (PFL) contribution rate paid by employees is 0.432% (up from 0.388%) of gross weekly wages, payable up to an annual maximum of  $411.91 (up from $354.53). 

Employees earning less than the New York State Average Weekly Wage (SAWW) of $1,833.63 (up from $1,757.19) per week will have an annual contribution amount below the $411.91 cap, consistent with their actual wages.

2026 PFL Payroll Deduction Notice

NYC: City Updates Earned Safe and Sick Leave

Effective February 22, 2026, the amendments to New York City’s Earned Safe and Sick Time Act (ESSTA) introduce several important changes for employers.

Key Changes

1. Unpaid Sick and Safe Leave Bank:
   • In addition to paid sick and safe time, employers must provide employees with at least 32 hours of unpaid sick and safe leave each calendar year.
   • This unpaid leave must be available immediately upon hire and at the start of each calendar year.
   • Unused unpaid leave does not carry over to the following year.
   • When an employee requests leave for a qualifying reason, employers must provide paid leave if available, unless the employee has no paid leave left or specifically requests unpaid leave.
2. Pay Statement Requirements:
   • Employers must include the amount of unpaid sick and safe time available, along with paid leave balances, on each pay statement or in other written documentation provided to employees every pay period.
3. Paid Prenatal Personal Leave:
   • Employers must provide paid prenatal personal leave as required by ESSTA rules, now formally incorporated into the law.
4. Expanded Qualifying Reasons for Leave:
   • Employees may now use sick and safe time for additional reasons, including:
     1. Business or school closures, or travel restrictions, due to a public disaster (such as fire, explosion, terrorist attack, or severe weather).
     2. If the employee or a family member is a victim of workplace violence.
     3. To care for a child under 18 or a care recipient (a person with a disability who relies on the employee for care).
     4. To attend or prepare for legal proceedings related to subsistence benefits or housing for themselves or a family member.

What Employers Need to Do:

• Update leave policies and employee handbooks to reflect these new requirements.
• Adjust payroll and HR systems to track and display both paid and unpaid leave balances on pay statements.
• Train HR and management staff on the expanded qualifying reasons for leave and the new unpaid leave bank.
• Ensure compliance with the new rules by the effective date to avoid penalties.

New York City has not yet issued an updated notice. Employers are required to monitor the city’s website for this forthcoming notice.

For questions about implementation or assistance with policy updates, please contact your Nextep HR Business Partner.

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NORTH CAROLINA

NC:  State Adopts New Definition of Sex

Effective January 1, 2026, North Carolina will legally recognize only male and female sexes, not equating gender identity with sex. This state law conflicts with federal employment protections (Title VII). The implications for employers vary significantly depending on whether they are in the public or private sector.

Definitions:

• Biological sex: Objective biological indicators (chromosomes, hormones, genitalia) present at birth, regardless of an individual’s psychological or chosen gender experience.
• Female: A person belonging to the sex characterized by producing ova.
• Male: A person belonging to the sex characterized by producing sperm.
• Gender identity: An individual’s self-declared, subjective internal sense that is not legally or biologically equivalent to sex.

The new North Carolina law defining sex based strictly on biological criteria creates different compliance landscapes for private and public employers.

Private Employers:

• Federal Law Prevails: You must continue to comply with federal anti-discrimination law (Title VII, as interpreted by Bostock), which prohibits discrimination based on gender identity.
• Compliance Confusion: While state law defines sex biologically, federal law remains the primary driver of employment lawsuits.
• Facilities: Setting bathroom policy strictly by “biological sex” (as per state law) may increase your risk of a federal discrimination claim from an employee.
• Action: Most private employers will maintain inclusive policies and definitions to align with federal requirements.

Public Employers (State Agencies, Public Schools, Local Government):

• Direct Application: The new law applies directly to you.
• Mandatory Changes: You must revise employee handbooks, administrative rules, data collection forms, and facility policies (bathrooms, locker rooms) by January 1, 2026, to use the state’s strict biological definition of sex.
• Record Keeping: Administrative records and state-level demographic reporting must align with the new statutory definitions.

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OREGON

OR: State Expands Pay Statement Requirements

Effective January 1, 2026, an employer must provide new employees, at the time of hire, with a written explanation of the earnings and deductions shown on their itemized pay statements. The explanation must include the following information:

• The employer’s established regular pay period;
• A comprehensive list of:
  • All types of pay rates that employees may be eligible for, including hourly pay, salary pay, shift differentials, piece-rate pay, and commission-based pay;
  • All benefit deductions and contributions; and
  • Every type of deduction that may apply;

• The purpose of deductions that may be made during a regular pay period;
• Any allowances claimed as part of the minimum wage;
• Employer-provided benefits that may appear on itemized pay statements as contributions and deductions; and
• All payroll codes used for pay rates and deductions, along with a detailed description or definition of each code.

Details:

The required information must be sufficiently detailed to explain pay rates and deduction codes, but does not have to be in complete sentences. An employer must update the information by January 1 of each year.

Employers may satisfy the requirement to provide this information to employees by making it available in a location easily accessible to them, such as via a link to a website, email, posting a document on an intranet website, or physically posting a document at a central work location.

The Oregon Bureau of Labor and Industries (BOLI) provides guidance and a sample Itemized Pay Statement Notice Template (in English, Spanish, and potentially other languages on request) that includes commonly used statewide deductions that employers may use and customize to satisfy these requirements.

OR: Disability Benefits May Not Require Use of Paid Family and Medical Leave Benefits

Starting January 1, 2026, employers offering disability insurance cannot require an employee to first use or apply for other benefits, such as paid family and medical leave, before qualifying for disability benefits.

OR: State Expands Paid Sick Leave Qualifying Reasons

Effective January 1, 2026, the Oregon Sick Time Law qualifying reasons are amended to add leave for blood donation.

OR: Enhances Workplace Violence Prevention Requirements for Health Care Settings

Effective January 1, 2026, Oregon’s new law imposes additional workplace violence protections for health care employers. Here’s what this means for employers in hospitals, home health agencies, and hospice programs.

What This Means for Employers:

1. Expanded Workplace Violence Prevention Program:
   • Employers must enhance their existing workplace violence prevention programs. These requirements now explicitly apply to home health agencies and home hospice programs, not just hospitals and traditional health care facilities.
   • Programs must include comprehensive risk assessments, prevention strategies, and clear procedures for reporting and responding to incidents.
2. Mandatory Training for Employees and Contracted Security:
   • All employees, as well as any contracted security personnel working on the premises, must receive workplace violence prevention and protection training.
   • Training should cover recognizing, preventing, and responding to workplace violence, and must be updated regularly.
3. Employee Badge Name Limitation:
   • In hospitals, home health agencies, and home hospice programs, employees may use only their first name on their badges. This protects staff privacy and reduces the risk of targeted violence or harassment.
4. Flagging Systems for Threats:
   • Employers must implement systems to “flag” patients or situations that present a risk of violence or disruptive behavior.
   • This includes using electronic health record (EHR) flags and visual indicators to alert staff to potential threats.

What Employers Should Do:

• Review and update workplace violence prevention policies to ensure compliance with the new requirements.
• Extend program coverage and training to all relevant staff, including contracted security and home-based care workers.
• Update badge issuance procedures to allow for first-name-only identification.
• Develop or enhance flagging systems within EHRs and through visual cues to identify and communicate potential threats.

To ensure all policies, training, and systems are ready by the January 1, 2026, effective date, employers should begin preparations now. If you require assistance with these updates or need to implement these changes, please contact the Nextep HR Team. They can provide further guidance and draft policy templates customized for your organization.

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PENNSYLVANIA

PA: Philadelphia Strengthens Ban the Box Ordinance

Effective January 6, 2026, amendments to the Philadelphia Fair Criminal Record Screening Standards Ordinance will significantly impact how employers in Philadelphia conduct criminal background checks and make hiring decisions. Here’s what these changes mean for employers:

1. New Definitions:
   • The ordinance now provides specific definitions for “felony,” “misdemeanor,” “summary offense,” and “incarceration.” Employers must ensure their policies and procedures use these updated definitions when evaluating criminal records
2. Stricter Procedural Obligations:
   • Before making any employment decision based on a criminal conviction, employers must follow enhanced procedures. This includes:
     1. Considering new, specific factors (such as the nature of the offense, time elapsed, and its relevance to the job) before taking adverse action
     2. Documenting the individualized assessment process for each candidate
     3. Providing clear communication to candidates about how their criminal record was considered
3. Expanded Prohibitions:
   • Employers are now prohibited from considering:
     1. Felony convictions that are less than seven years old,
     2. Misdemeanor convictions that are less than four years old,
     3. Summary offenses of any age. This means certain criminal records cannot be used in employment decisions, regardless of the circumstances.
4. New Anti-Retaliation Provisions:
   • The amendments introduce protections for applicants and employees who exercise their rights under the ordinance. Employers are prohibited from retaliating against individuals who file complaints, participate in investigations, or otherwise assert their rights related to criminal record screening.

What Employers Should Do:

• Review and update hiring policies and background check procedures to comply with the new definitions and prohibitions.
• Train HR staff and hiring managers on the new requirements and anti-retaliation protections.
• Ensure all individualized assessments are well-documented and that communication with candidates is clear and compliant.
• Monitor for further guidance from the City of Philadelphia as the effective date approaches.

If you need assistance updating your policies or training your team, Nextep HR Team can provide further guidance and support.

PA: Pittsburgh Increases Paid Sick Leave

Effective January 1, 2026, the amendments to the Pittsburgh Paid Sick Days Act (PSDA) will require employers to make several significant changes to their sick leave policies.

Key Changes:

1. Increased Accrual Rate for All Employers:
   1. Employees will accrue paid sick leave at a faster rate: one hour of sick leave for every 30 hours worked (up from the current one hour for every 35 hours worked).
   2. This means employees will earn sick leave more quickly
2. Larger Employers (15 or More Employees):
   1. The maximum amount of sick leave an employee can use or accrue in a year increases to 72 hours (from 40).
   2. If you use the accrual method, employees must be allowed to carry over up to 72 hours of unused sick leave each year (up from 40 hours).
   3. If you frontload sick leave (provide the full amount at the start of the year), the annual use cap is also 72 hours.
3. Smaller Employers (Fewer Than 15 Employees):
   1. The annual sick leave cap increases to 48 hours (previously 24).
   2. Employees must be allowed to carry over up to 48 hours of unused sick leave each year (up from 24 hours).

What Employers Should Do:

• Update your sick leave policies and employee handbooks to reflect the new accrual rates, annual caps, and carryover requirements.
• Adjust payroll and HR systems to track accrual and carryover at the new rates and limits.
• Communicate these changes to employees before the effective date.
• Train managers and HR staff on the new requirements to ensure compliance.

With the January 1, 2026, amendments, Pittsburgh is expected to release updated notice and poster templates for new accrual rates, annual caps, and carryover. Employers should watch for updated materials from the City of Pittsburgh or the Pennsylvania Department of Labor & Industry as the effective date nears.

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RHODE ISLAND

RI: State Enacts New Hire Pay-Related Employee Notification Requirements

Effective January 1, 2026, employers in Rhode Island must provide every new employee with a detailed written notice in English at the time of hire. The notice must include specific information about pay, benefits, employment status, deductions, pay periods, employer details, and contact information. The employee must sign to acknowledge receipt, and the employer must retain a copy for at least three years.

Key actions for employers:

• Update Onboarding Processes: Integrate this written notice into your standard hiring procedures for all new employees.
• Prepare a Compliant Notice Template: Ensure the notice covers all required details, including pay rates, allowances, leave policies, deductions, pay schedule, and employer information.
• Obtain Employee Acknowledgment: Have each new hire sign the notice to confirm receipt.
• Maintain Records: Keep a signed copy of the notice for each employee for at least 3 years.
• Train HR and Hiring Managers: Make sure all relevant staff understand the new requirements and the importance of compliance.

Nextep will ensure compliance, including obtaining the employee’s signature upon hire to acknowledge receipt of the required information.

RI: State Amends Paid Family Leave

Effective January 1, 2026, Rhode Island employers must comply with several important updates to the state’s Temporary Caregiver Insurance (TCI) program, also known as paid family leave:

Key Changes for Employers:

1. Extended Benefit Period: The maximum duration of wage replacement benefits under TCI increases from seven weeks to eight weeks per benefit year. Employees may now take up to eight weeks of paid family leave for qualifying reasons.
2. Expanded Family Member Coverage: Employees may take TCI leave to care for a seriously ill sibling, including biological, half-, step-, foster-, or adopted siblings. Previously, siblings were not included as covered family members.
3. New Qualifying Reasons for Leave: Employees may use TCI leave to donate bone marrow or an organ. The law covers the time needed for related procedures, medical tests, and surgeries, including:
   1. Up to five business days of recovery for bone marrow donation
   2. Up to 30 business days of recovery for living organ donation

What Employers Should Do:

• Update Leave Policies: Revise your employee handbooks and leave policies to reflect the new eight-week benefit period, expanded family member coverage, and new qualifying reasons for leave.
• Train HR and Managers: Ensure HR staff and managers are aware of the new rules and understand how to process requests for TCI leave requests under the updated law.
• Communicate with Employees: Inform employees about the upcoming changes to their paid family leave rights before the effective date.
• Coordinate with Payroll: Ensure payroll systems are updated to accommodate the extended benefit period and any related administrative changes.

If you need assistance updating your policies or preparing employee communications regarding these changes, please reach out to your HR Business Partner.

Since the state has not yet released the official notice detailing the 2026 changes, employers are advised to continue monitoring the state’s website for updates.

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TEXAS

TX: State Prohibits Intentional AI Discrimination

Effective January 1, 2026, the Texas Responsible AI Governance Act (TRAIGA) will require employers operating in Texas to ensure that any artificial intelligence (AI) systems they develop or use are not intended to discriminate against protected classes (such as race, color, national origin, sex, age, religion, or disability) in violation of federal or state law.

Key implications for employers:

1. Scope of Coverage: TRAIGA applies broadly to organizations that do business in Texas, offer products or services to Texas residents, or develop/deploy AI systems in Texas. This includes most employers with operations or customers in the state.
2. Definition of AI System: The law covers any machine-based system that uses inputs to generate outputs (like decisions, recommendations, or predictions) that can influence environments or people. This includes AI used in hiring, promotions, performance management, or other employment decisions.
3. Intent to Discriminate: TRAIGA specifically prohibits the use or development of AI systems with the intent to discriminate against protected classes. Importantly, simply having a “disparate impact” (where a system unintentionally affects a protected group more than others) is not enough to prove a violation—there must be evidence of intent.
4. Protected Classes: Employers must be mindful of all groups protected under federal or Texas civil rights laws, including but not limited to race, color, national origin, sex, age, religion, and disability.
5. Penalties: Violations can result in significant civil penalties:
   1. Up to $12,000 per curable violation
   2. Up to $200,000 per uncurable violation
   3. Up to $40,000 per day for ongoing violations
6. Exceptions: Certain insurance entities and federally insured financial institutions may be exempt from some requirements.

What Employers Should Do:

• Review and Audit AI Systems: Assess any AI tools used in employment decisions to ensure their design or utilization does not have discriminatory intent.
• Update Policies and Training: Revise internal policies and provide training for HR and IT teams on TRAIGA requirements.
• Vendor Management: If using third-party AI systems, conduct due diligence to ensure compliance with TRAIGA.
• Document Compliance Efforts: Keep thorough records of steps taken to prevent discriminatory intent in AI use.

Next Steps: Begin reviewing your organization’s use of AI in employment practices now to ensure compliance by January 1, 2026. Consult with Nextep’s HR experts to assess risks and update procedures as needed.

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WASHINGTON

WA: State Expands Domestic Violence Protections

Effective January 1, 2026, Washington’s Domestic Violence Leave Act (DVLA) will expand to cover employees who are victims of hate crimes, as well as employees whose family members are victims of hate crimes. Here’s what this means for employers in Washington:

1. Expanded Coverage: Previously, the DVLA provided protections for employees affected by domestic violence, sexual assault, or stalking. The amendments now extend these same protections to situations involving hate crimes, as defined under Wash. Rev. Code § 9A.36.080. This includes hate crimes committed online or through internet-based communication.
2. Leave Entitlements: Employees who are victims of a hate crime, or whose family members are victims, have the entitlement to take leave for reasons such as:
   1. Seeking legal or law enforcement assistance,
   2. Obtaining medical treatment or counseling,
   3. Relocating or taking steps to increase safety,
   4. Attending court proceedings related to the hate crime.
3. Non-Discrimination and Retaliation Protections: Employers cannot discriminate or retaliate against employees who request or take leave under the DVLA for hate crime-related reasons.
4. Safety Accommodations: Employers must provide reasonable safety accommodations requested by employees who are victims (or whose family members are victims). This may include changes to work schedules, work locations, or other adjustments to enhance safety.
5. Policy and Compliance Updates:
   1. Update your leave policies and employee handbooks to reflect the expanded DVLA coverage.
   2. Train HR staff and managers on the new protections and procedures.
   3. Ensure processes are in place to handle requests for leave and safety accommodations related to hate crimes.
   4. Maintain confidentiality regarding any information provided by employees in connection with DVLA leave.
6. Documentation: Employers may request verification of the need for leave, but must follow the same procedures as for other DVLA-covered situations.

Action Steps:

• Review and update your policies before January 1, 2026.
• Communicate these changes to employees.
• Ensure compliance with all recordkeeping and confidentiality requirements.

Since the state has not yet released the official notice detailing the 2026 changes, employers are advised to continue monitoring the state’s website for updates.

WA: State Amends Isolated Worker Harassment Prevention

Effective January 1, 2026, amendments to Washington’s Isolated Worker Harassment Prevention law will require employers in specific industries to take additional steps to protect isolated workers from sexual harassment and assault. Here’s what these changes mean for employers:

1. Expanded Training Requirements:
   • Employers must provide training to isolated employees on how to use panic buttons.
   • Managers and supervisors must be trained on their responsibility to respond when a panic button is activated.
   • Completion of this training must be documented, and records must be provided to the Department of Labor & Industries (DLI) upon request.
2. Recordkeeping Obligations:
   • Employers must keep records of the purchase and use of panic buttons.
   • These records must be available for inspection by the DLI.
3. Updated Definition of Isolated Employee:
   • The law now covers janitors, security guards, hotel/motel housekeepers, and room service attendants who:
     1. Work in areas where two or more coworkers or supervisors cannot immediately respond to an emergency without being summoned, or
     2. Spend at least 50% of their working hours alone, without another supervisor or coworker present.
4. New Panic Button Specifications:
   • Panic buttons must be:
     1. Designed to be carried by the isolated employee,
     2. Simple to activate (no passwords or delays),
     3. Capable of sending an effective signal in an emergency,
     4. Able to summon immediate assistance and allow responders to locate the employee accurately.

Action Steps for Employers:

• Review and update your harassment prevention policies and procedures.
• Ensure panic buttons meet the new design and functionality requirements.
• Develop and implement training programs for both isolated employees and supervisors.
• Establish and maintain required documentation and records.
• Communicate these changes to affected employees before January 1, 2026.

If you need assistance with policy updates, training materials, or compliance checklists, please reach out to your HR Business Partner.

WA: State Amends Paid Family and Medical Leave

Effective January 1, 2026, several important amendments to Washington’s Paid Family and Medical Leave (PFML) law will impact employer obligations. Here’s what these changes mean for employers:

• Small Employer Assistance Program Grants:
  • Employers may now receive (not just apply for) up to 10 grants per calendar year under the small employer assistance program. This clarifies the limit on the number of grants available annually.
• Minimum Claim Duration:
  • The minimum duration for which an employee can claim paid family or medical leave benefits reduces from eight consecutive hours to four consecutive hours. This allows employees to take shorter increments of leave and still receive benefits.
• Expanded Employer Notice Requirements:
  • In addition to current posting requirements, employers must provide employees with written notice that includes:
    1. Eligibility requirements for PFML,
    2. Possible weekly benefit amounts,
    3. Application processes,
    4. Employment protection rights,
    5. Nondiscrimination rights, and
    6. Other protections under the law.
  • The Employment Security Department (ESD) will provide a written statement of employee rights for employers to distribute, which will help fulfill this requirement.
• Reinstatement Rights (Phased Implementation by Employer Size):
  • Employees are eligible for job reinstatement after PFML leave if they have been employed for at least 180 days before taking leave, and:
    1. From Jan 1, 2026 – Dec 31, 2026: Employer has 25 or more employees.
    2. From Jan 1, 2027 – Dec 31, 2027: Employer has 15 or more employees.
    3. From Jan 1, 2028 onward: Employer has 8 or more employees.
  • Reinstatement means returning to the same or an equivalent position with equivalent pay, benefits, and terms.
  • This applies whether the leave is taken under state PFML, FMLA, or both, and even if the employee was eligible for PFML but did not apply for or receive benefits.
  • Reinstatement rights can only be forfeited by written agreement (including collective bargaining agreements).

Action Steps for Employers:

• Update your PFML policies and employee handbooks to reflect these changes.
• Prepare to distribute the ESD’s written statement of employee rights to all employees.
• Train HR and management on the new minimum leave increments and expanded reinstatement rights.
• Review your processes for tracking employee leave and reinstatement eligibility, especially as thresholds for employer size change over the next three years.
• Ensure compliance with the new grant limits if you participate in the small employer assistance program.

Since the state has not yet released the official notice detailing the 2026 changes, employers are advised to continue monitoring the state’s website for updates.

WA: State Amends Health Care Workplace Violence Law

Effective January 1, 2026, amendments to Washington’s Health Care Workplace Violence Prevention Law introduce several new and clarified requirements for health care employers. Here’s what these changes mean for employers in health care settings:

1. Workplace Violence Prevention Plan Updates:
   • The requirement to develop and implement a workplace violence prevention plan “every three years” is removed. Instead, you must review and update the plan at least once per calendar year.
   • The annual review and update can be conducted by the safety or workplace violence committee, if such a committee exists.
2. Incident Investigation Requirements:
   • Every workplace violence incident must be investigated promptly.
   • Each investigation must include:
     1. A review of the incident details (date, time, location, nature of conduct, and harm caused),
     2. An assessment of the response and any remediation steps taken to prevent future incidents,
     3. If applicable, a comparison of actual staffing levels to planned staffing levels at the time of the incident.
3. Reporting and Analysis:
   • Health care settings must submit a summary to the safety or workplace violence committee (if any) at least quarterly. The summary must include:
     1. Data required by existing recordkeeping rules and findings from investigations (with personal information de-identified),
     2. An analysis of systemic and common causes of workplace violence incidents,
     3. Recommendations for modifying the prevention plan and practices to prevent future incidents.
   • Certain smaller or rural hospitals (as specified) may submit this summary at least twice per year instead of quarterly.
4. Confidentiality:
   • These requirements do not override any state or federal laws that limit the disclosure of personally identifiable information. All summaries and reports must comply with privacy laws.

Action Steps for Employers:

• Update your workplace violence prevention plan to ensure it is reviewed and updated at least annually.
• Establish or update procedures for the timely investigation of all workplace violence incidents, including the required assessments.
• Ensure your safety or workplace violence committee (if applicable) is prepared to conduct reviews and receive regular summaries.
• Implement processes for de-identifying personal information in all reports and summaries.
• Adjust your reporting schedule if you are a qualifying small or rural hospital.
• Train staff and committee members on the new requirements and documentation standards.

Applies To:

The Health Care Workplace Violence Prevention Law in Washington applies to a broad range of health care settings, including:

• Hospitals (including general, specialty, and acute care hospitals) 
• Home health, hospice, and home care agencies 
• Evaluation and treatment facilities (such as those providing emergency, outpatient, or inpatient care for individuals with mental health conditions) 
• Behavioral health programs (licensed or certified mental health and substance use treatment programs) 
• Ambulatory surgical facilities (free-standing centers performing surgical procedures on non-hospitalized patients)

If you need assistance with policy updates or training materials, please reach out to your HR Business Partner.

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