As we move into 2026, employment law compliance is becoming more complex, more localized, and more heavily enforced than ever before. For companies engaging workers across multiple states or countries, keeping pace with these changes can be time-consuming and risky.

That is exactly why organizations partner with TCWGlobal. As a global Employer of Record (“EOR”) and staffing partner, we serve as the legal employer and alleviate the compliance burden so our clients can focus on growth, not regulations.

Below are the top employment law trends in the US that companies should be aware of as they head into 2026 and how TCWGlobal helps simplify compliance every step of the way.

1. Minimum Wage Increases Continue to Accelerate

At least 19 states and numerous local jurisdictions implemented minimum wage increases going into 2026. While the federal minimum wage remains unchanged, state and local wage floors continue to rise through scheduled increases and cost-of-living adjustments Many jurisdictions now exceed $15 per hour, with several surpassing $17 per hour.

Notable 2026 wage rates include:

• Washington, D.C.: $17.95 per hour
• Washington State: $17.13 per hour
• New York: $17 per hour in NYC, Long Island, and Westchester and $16 elsewhere
• Connecticut: $16.94 per hour
• California: $16.90 per hour
• Hawaii and Rhode Island: $16.00 per hour
• Colorado: $15.16 per hour
• Arizona: $15.15 per hour

Because minimum wage and exempt salary thresholds vary significantly by location, companies must evaluate requirements for each worker’s worksite. You can view current U.S. minimum wage rates and salary thresholds here.

When you partner with TCWGlobal as your EOR, we monitor wage changes, adjust payroll accordingly, and reduce wage and hour exposure so you do not have to.

2. Pay Transparency Laws Expand Into New Jurisdictions

Pay transparency continued to expand throughout 2025 as a key focus across the United States and is still on the horizon for 2026. Several states, including Illinois, Minnesota, New Jersey, Massachusetts, and Vermont, enacted new laws requiring disclosure of wage/salary ranges and other compensation details in job postings and during the hiring process.

Because requirements vary by jurisdiction in scope, timing, and enforcement mechanisms, compliance can be challenging for companies hiring across multiple locations. Detailed guidance on state and local pay transparency requirements can be found HERE.   

TCWGlobal helps clients navigate these requirements by ensuring job postings, offer letters, and hiring practices align with applicable pay disclosure laws.

3. Artificial Intelligence Regulation Moves from Concept to Enforcement

As artificial intelligence tools become more common in hiring, performance management, and other workforce decisions, states are increasingly regulating their use. These laws generally focus on transparency, anti-discrimination protections, and risk management obligations for employers that rely on automated or AI-driven systems.

Key 2026 developments include:

California

California issued regulations prohibiting discriminatory use of automated decision systems under the Fair Employment and Housing Act, effective October 1, 2025. In addition, businesses subject to the California Consumer Privacy Act must begin complying with automated decision-making risk assessment requirements by January 1, 2026, even though broader rules take effect in 2027.

Colorado

Colorado’s Artificial Intelligence Act regulates AI use in what the law defines as high-risk employment activities, including hiring, compensation, promotion, performance management, and termination. Employers with more than 50 workers must establish risk management programs, complete annual impact assessments, and conduct additional assessments following material changes to AI systems. If AI use results in an adverse employment action, employers must provide individuals with an opportunity to correct inaccurate data and access an appeals process. Implementation of this law has been delayed until June 30, 2026.

Illinois

Effective January 1, 2026, Illinois law requires employers to provide notice to applicants and workers when artificial intelligence is used to influence or facilitate an employment-related decision. Notices must be provided to current workers annually or within 30 days of adopting a new or substantially modified AI system and must be included in job postings for prospective workers. Companies are also required to retain related disclosures and records for at least four years.

Texas

Texas enacted legislation effective January 1, 2026, prohibiting intentional discrimination resulting from the use of artificial intelligence in employment decision-making. Enforcement authority rests exclusively with the state attorney general. Companies are entitled to notice and a 60-day cure period before penalties may be imposed.

For a broader view of AI-related employment laws beyond 2026, see TCWGlobal’s comprehensive AI Law chart.

4. Paid Family, Medical, and Protected Leave Programs Continue to Grow

State and local paid leave laws continue to expand in both scope and complexity, creating compliance challenges around accruals, eligibility, notices, and payroll deductions.

Key 2026 developments include:

Colorado

Colorado’s Family and Medical Leave Insurance program is expanding to provide up to 12 weeks of paid leave for parents whose child is receiving care in a Neonatal Intensive Care Unit, in addition to existing bonding leave. This allows for up to 24 weeks of total leave related to birth-related hospitalizations. The expansion took effect on January 1, 2026.

Delaware

Beginning January 1, 2026, Delaware’s Healthy Delaware Families Act allows workers to take up to 12 weeks of paid leave per year to bond with a new child and up to six weeks of paid leave per year to address a serious health condition or to care for a family member with a serious medical condition. Amendments to the law also prohibit employers from requiring workers to use accrued paid time off before accessing paid family and medical leave benefits, along with other worker-protective changes.

Illinois

Amendments to Illinois’ Nursing Mothers in the Workplace Act clarify that breaks for expressing breast milk must be paid at the employee’s regular rate of pay. Employers may not require workers to use paid leave for this purpose. These changes take effect on January 1, 2026.

Maine

Maine’s Paid Family and Medical Leave program enters its benefit phase in 2026. Although payroll contributions began in 2025, eligible workers may begin receiving paid benefits starting in May 2026. Workers may take up to 12 weeks of paid leave for their own serious health condition, to bond with a child following birth, adoption, or fostering, to care for a family member with a serious health condition, to address qualifying military-related needs, or to seek safety related to abuse or violence.

Minnesota

Minnesota’s Paid Leave law took effect on January 1, 2026, providing eligible workers with up to 12 weeks of paid family leave or paid medical leave. Workers who require both types of leave within a single benefit year may be eligible for up to 20 weeks of paid leave. Employers were required to notify workers of their rights and benefits under the program by December 1, 2025.

In addition, Minneapolis enacted a paid Earned Sick and Safe Time ordinance that allows workers to use accrued leave for qualifying bereavement purposes.

New Hampshire

Effective January 1, 2026, covered employers in New Hampshire must provide up to 25 hours of unpaid leave during the first year following a child’s birth or adoption. This leave allows workers to attend their own childbirth or postpartum medical appointments or their child’s pediatric medical appointments.

New York City

In October 2025, New York City enacted amendments to its Earned Safe and Sick Time Act expanding the permissible uses of earned safe and sick time. The amendments also create a separate bank of unpaid protected safe and sick time in addition to existing paid entitlements. These changes take effect on February 22, 2026.

Washington

Amendments to Washington’s Paid Family and Medical Leave law took effect on January 1, 2026, expanding eligibility for job-protected leave to workers after 180 days of service. Previously, workers were required to complete at least 12 months of employment and 1,250 hours of service to qualify. Washington also expanded paid leave protections to cover workers impacted by hate crimes.

Additionally, amendments to Washington’s paid sick leave law that became effective July 1, 2025, allow workers to use sick leave to prepare for or participate in judicial or administrative immigration proceedings involving the worker or a family member.

Rhode Island

Rhode Island amended its Temporary Disability Insurance program effectively January 1, 2026. The amendments expand the definition of covered family members to include siblings and increase the maximum temporary caregiver benefit from seven to eight weeks.

TCWGlobal ensures compliance with accrual tracking, wage statement requirements, employee notices, and policy updates.  Learn more about state and local paid leave requirements HERE and HERE.

5. Growing Scrutiny of "Stay or Pay" Agreements

So-called “stay or pay” agreements are drawing increased regulatory attention heading into 2026. These arrangements require workers to repay training costs, signing bonuses, relocation expenses, or other employer investments if they leave employment before a specified period. While historically common in certain industries, many states now view these agreements as restrictive, coercive, or functionally similar to unlawful penalties.

New in 2026 are the following:

California’s Assembly Bill 692

California enacted new legislation that takes effect January 1, 2026, expressly restricting “stay or pay” agreements associated with employment. Now, it is considered generally unlawful to include clauses that require workers to repay training costs, sign-on bonuses, relocation fees, or similar costs if they leave employment, subject to narrow exceptions and procedural requirements. Agreements entered on or after January 1, 2026, must comply with the new standards or risk being treated as void and against public policy.

New York’s Trapped at Work Act

New York’s Trapped at Work Act became effective December 19, 2025, and places restrictions on clawback provisions and many training repayment agreements. This law precludes employers from enforcing repayment obligations for training costs and similar expenses against workers if those obligations are required as a condition of employment.

As Employer of Record, TCWGlobal helps its clients structure compliant compensation, bonus, and training arrangements that align with jurisdiction-specific requirements. We reduce exposure tied to unlawful repayment obligations and ensure worker agreements comply with evolving state and federal standards.

Need Help Navigating Employment Law Changes in 2026?

TCWGlobal closely monitors evolving state and federal employment laws and supports businesses through comprehensive contingent workforce management, staffing, and Employer of Record solutions.

If you would like help understanding how these changes impact your workforce or want to learn how TCWGlobal can reduce your compliance burden, contact us at (858) 810-3000 or email hello@tcwglobal.com.