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New Year, New Laws: What Employers Need to Know About 2026 HR, Benefits and Retirement Compliance
STAY ON TOP OF FEDERAL POLICY CHANGES
Federal Policy Updates for Employers
OneDigital understands it’s more critical than ever to stay on top of anticipated legislative and regulatory developments so that leaders can adapt quickly, mitigate risk, and seize opportunities.
What to Watch: Quick Look
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Artificial Intelligence & Workplace Technology
- JAN 9, 2026 | The Department of Justice (DOJ) launched a national Artificial Intelligence Litigation Task Force (AI Task Force) to challenge state AI laws that are considered to be “inconsistent” with federal AI policy, following the Administration’s December 2025 executive directive.
- FEB 13, 2026 | The DOL released a non-binding AI Literacy Framework outlining core competencies that workers should develop to use AI effectively in the workplace. The framework also identifies employer training principles, emphasizing hands-on, job-specific, and ongoing learning.
- MAR 20, 2026 | The Trump administration released "A National Policy Framework for Artificial Intelligence," providing a non-binding set of legislative recommendations urging Congress to adopt a unified federal approach to AI regulation.
- Employers can expect increased federal litigation targeting state-level AI laws and regulations, particularly where state requirements conflict with federal priorities.
- Employers are still required to comply with existing state and local laws regulating the use of AI, including any applicable notice, documentation, or testing requirements, unless and until those laws are repealed, preempted, or enjoined as a result of anticipated federal challenges.
- The AI Literacy Framework does not create new legal obligations, but reflects the federal government's expectations for how employers should integrate AI literacy into workforce development programs.
- Employers should understand where and how AI technology is used in the workplace, and how those uses may impact employee rights or protections. Reliance on AI or automated tools does not relieve employers of their legal responsibility for employment-related decisions.
- The proposed National Policy Framework for AI does not presently create new employer obligations. Congressional action is required before any of its recommendations become enforceable.
- Employers should continue to build compliance strategies around existing state and local AI laws, which remain in effect regardless of the federal proposal.
Employment Agreements & Worker Mobility
FEB 12, 2026 | The FTC published a final action in the Federal Register to formally remove the Non-Compete Clause Rule (16 CFR Part 910) from the Code of Federal Regulations, closing out the agency's pursuit of a categorical nationwide noncompete ban.
- The formal removal of the rule does not eliminate noncompete scrutiny. The FTC continues to evaluate agreements on a case-by-case basis.
- State-level noncompete laws remain in effect and will continue to vary significantly by jurisdiction.
- Employers should review noncompete and other restrictive covenant agreements with legal counsel.
Federal Agency Regulation
Federal Agency Regulation
U.S. Department of Labor
What Happened?
- The DOL released updated compliance assistance tools, including redesigned web resources, new FMLA video tutorials, and updated industry specific toolkits aimed at improving employer understanding of federal wage and hour and leave requirements.
What Does This Mean for Employers?
- Employers may benefit from reviewing the DOL’s new compliance assistance resources. Tools may help reduce administrative errors and enforcement risk, but employers remain ultimately responsible for compliance with applicable statutory obligations.
Health Plans & Employee Benefits
- Feb 16, 2026 | Deadline for covered entities to update their HIPAA Notice of Privacy Practices (Notice) to address substance use disorder (SUD) protections.
- Feb 2, 2026 | Congress passed the Consolidated Appropriations Act, 2026 (CAA 2026). Included in CAA 2026 are new laws designed to change the pricing and compensation structures of pharmacy benefit managers (PBMs).
- Final regulations issued in 2024 require new protections for SUD/Part 2 records. An SUD record may contain information about a patient’s identity, diagnosis, treatment, billing, and any other information relating to a patient. Part 2 references HIPAA regulations that protects the confidentiality of SUD treatment records.
- Effective 2029, CAA 2026 requires that any contract with a PBM and either an employer-sponsored group health plan or health insurance carrier may not limit or delay disclosure of specific information to the plan. What information must be disclosed depends on various factors, including whether the plan is self- or fully insured and the size of the employer. Generally, each report must include information on compensation received by the PBM and the prescription drug claims and costs of the plan.
Immigration & Work Authorization
Immigration & Work Authorization
Form I-9
What Happened?
- MAR 16, 2026 | U.S. Immigration and Customs Enforcement (ICE) updated its Form I-9 inspection fact sheet to reclassify a number of previously technical violations as substantive violations, effective immediately.
What Does This Mean for Employers?
- Employers may face significantly elevated exposure for Form I-9 errors that were previously considered curable technical violations. Immediate fines may now apply without warning.
- Employers should conduct internal I-9 audits in consultation with legal counsel and should consult legal counsel immediately upon receipt of a Notice of Inspection from ICE.
People Practices & Workplace Inclusion
MAR 26, 2026 | President Trump signed Executive Order 14398, "Addressing DEI Discrimination by Federal Contractors," requiring federal agencies to include specific contractual requirements in all federal contracts and subcontracts regarding certain DEI activities.
- The EO is limited to federal contractors and subcontractors. The prohibited conduct (e.g., disparate treatment based on race or ethnicity) is already prohibited by existing anti-discrimination law. The primary new obligation is contractual compliance and the associated enforcement mechanisms.
- Federal contractors and subcontractors should review their federal contracts with legal counsel.
Taxes, Funding & Financial Policy
JAN 23, 2026 | The IRS released new FAQs on the qualified overtime deduction created under the One, Big, Beautiful Bill Act (OBBB). The guidance clarifies how “qualified overtime compensation” is calculated and confirms employer reporting obligations for TY 2025 and 2026.
- Employers need to configure payroll systems to accurately track qualified overtime compensation. Full reporting enforcement is confirmed for TY 2026, so employers should ensure systems are configured to collect and report on this information, as of January 1, 2026, or otherwise implement manual tracking protocols if internal systems lack the required capability.
- Updated forms and withholding tables are expected for TY 2026, so employers should continue to monitor additional guidance from the IRS.
Worker Wages & Classifications
- FEB 9, 2026 | The DOL published a notice in the Federal Register clarifying the status of the federal contractor minimum wage following conflicting executive actions. Effective May 11, 2026, updated wage rates under EO wage rates under EO 13658 are $13.65/hour for covered workers and $9.55/hour for tipped workers.
- FEB 26, 2026 | The DOL published a proposed rule that would replace the current six-factor totality of the circumstances test for worker classification under the FLSA with a framework prioritizing two core factors: (1) the degree of control the worker has over the performance of their work, and (2) the extent to which the worker has genuine entrepreneurial opportunity. Importantly, the proposed standard would apply not only to the FLSA, but also the FMLA and the Migrant and Seasonal Agricultural Worker Protection Act (MSAWPA), potentially expanding misclassification exposure beyond wage and hour issues.
- MAR 27, 2026 | The DOL issued a proposed rule that would modernize the methodology for determining prevailing wage levels for the H-1B, H-1B1, E-3, and PERM permanent labor certification visa programs.
- The Obama-era EO 13658 (2014) continues to apply only to contracts awarded between January 1, 2015, and January 29, 2022, that have not been renewed or extended since. Federal contractors should confirm whether their contracts fall within the scope of EO 13658 and update applicable wage rates accordingly.
- Contracts awarded or renewed after January 29, 2022 are not subject to the federal contractor minimum wage under either the Obama-era or Biden-era executive orders, following the revocation of EO 14026.
- The DOL has indicated they will not pursue enforcement of the 2024 Final Rule for independent contractor status. This means new or ongoing enforcement actions or investigations by the DOL’s Wage and Hour Division (WHD) will not apply the 2024 Final Rule.
- The 2024 Final Rule still applies in cases where the DOL has already assessed back wages and penalties. The 2024 Final Rule also remains in effect in private litigation (e.g., where a worker brings a claim against their employer), unless and until the rule is formally rescinded or replaced.
- Independent contractor classifications should be reviewed with legal counsel.
- If finalized, the proposed prevailing wage rule could significantly increase the minimum wage obligations for employers sponsoring workers through H-1B, H-1B1, E-3, and PERM programs. Employers should consult with immigration counsel on workforce planning implications.
- Employers should continue to monitor developments from the DOL.
Workforce Management & Accommodations
FEB 11, 2026 | The EEOC issued FAQs on ADA and Telework Accommodations for federal agencies, clarifying when telework must be considered as a disability-related accommodation.
Although directed at federal agencies, the ADA and Telework guidance provides meaningful insight into how the EEOC expects the ADA's reasonable accommodation standards to apply to telework requests.
2025 Policy at a Glance
2025 Policy at a Glance
Artificial Intelligence & Workplace Technology
What Happened in 2025
- The Administration revoked previous EOs addressing artificial intelligence (AI) and moved toward deregulation (EO 14179).
- A subsequent order directed federal action against states that undertake to regulate the use of AI (EO 14365).
Ongoing Impacts in 2026
- Employer may see fewer federal AI-related requirements, but are still required to comply with state and/or local laws, where applicable.
- Federal posture remains deregulatory as likelihood of litigation over state AI laws unfold.
Employer Considerations
- Consider mapping where AI is used (e.g., in hiring, screening, or employee performance) and how the use may impact employee rights and protections.
Compliance Made Clear
At OneDigital, we translate complex law into clear, actionable steps for your business. Explore our library of past compliance sessions to help your organization mitigate risk and manage your workforce with confidence.
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Stay informed. Stay compliant. Stay ahead.
