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As we close out 2025, several states and cities have released new workplace rules that will take effect in early 2026. From minimum wage increases and expanded leave laws to new compliance requirements around AI, worker rights, and retirement programs, these updates may affect hiring, budgeting, and day-to-day operations for many employers.
This month’s roundup highlights the most important state and local changes so you can plan ahead and keep your workplace compliant moving into the new year.
Stay with us as we walk through each update and help you understand what may matter most for your workplace.
ARIZONA
Tucson Minimum Wage Increase for 2026
Beginning January 1, 2026, Tucson’s minimum wage rises to $15.45 per hour following the city’s annual inflation adjustment. The rate is based on the Consumer Price Index for All Urban Consumers (CPI-U) and will continue to update each year on the same schedule. Tucson’s rate remains higher than Arizona’s 2026 statewide minimum wage of $15.15, and it will adjust upward if state or federal law ever sets a higher floor.
Arizona Minimum Wage Update for 2026
Effective January 1, 2026, the state of Arizona raises its minimum wage to $15.15 per hour, based on the annual inflation adjustment as required by Arizona Revised Statute § 23‑363. For tipped employees, the direct cash wage will be $12.15 per hour, which is $3.00 less than the standard minimum wage, provided that total compensation (wages plus tips) meets or exceeds the full minimum.
CALIFORNIA
Hotel Worker Training Ordinance — Los Angeles, CA (effective December 1, 2025)
Beginning December 1, 2025, covered hotel employers in Los Angeles must provide mandatory training for hotel workers. The training — at least six hours of live, interactive “Public Housekeeping Training” — must be delivered by a certified third-party organization designated by the city’s Office of Workforce Standards (OWS). Covered employees include room attendants and other staff working in guest rooms, public-area housekeeping, or hotel operations. The training covers hotel-worker rights and employer responsibilities, cleaning and safety procedures, and how to identify and respond to threats such as human trafficking, domestic/sexual violence, vermin infestations or other hazards. Employers are responsible for both the cost of the training and the employee’s time spent in training.
New California Law Requires Worker Rights Notification Starting 2026
California has introduced a new compliance requirement that employers need to prepare for. Gov. Gavin Newsom has signed the Workplace Know Your Rights Act (SB 294), a law designed to ensure every employee in the state understands their constitutional rights during interactions with law enforcement at work.
What’s Changing?
Starting Feb. 1, 2026, all California employers must provide a stand-alone written notice to every employee—both current staff and new hires—outlining key rights such as:
The Labor Commissioner will release a template notice by Jan. 1, 2026, to help employers meet this requirement.
New Notification Rules
The law also adds a real-time notification requirement. If an employee is arrested or detained during work hours or while performing job duties, and they’ve authorized this in advance, employers must notify the worker’s designated person. Employees must be given the chance to select and authorize their emergency contact by March 30, 2026.
Action Steps for Employers
Now is a good time to begin planning for compliance. Recommended steps include:
This new requirement highlights California’s focus on worker protection and transparency. Staying ahead of the timeline will help ensure smooth compliance and clear communication with your workforce.
California’s Latest AI Rule: Employers Now Fully Liable for AI-Driven Discrimination
Beginning October 1, 2025, California employers will face one of the strongest AI-related employment regulations in the country. Recent amendments to the state’s anti-discrimination rules make it clear: if AI contributes to a discriminatory employment decision, the employer is responsible — no exceptions for size, industry, or technology used.
Unlike federal law, which has only issued general warnings, California’s update directly ties employer accountability to AI-assisted hiring, promotion, and evaluation activities. Whether you’re using automated resume screening, algorithmic scoring, or performance analytics, these rules now apply.
What Employers Need to Watch:
This regulatory shift comes amid broader concerns around automation and job displacement. More legislation aimed at protecting human roles is likely on the horizon.
What HR Leaders Should Do Now:
Audit current HR technologies for any AI or automated components.
As AI becomes more embedded in the workplace, California is closing the accountability gap between human and machine. Employers that act now will be better positioned to avoid compliance pitfalls — and protect both their workforce and their organization.
California CalSavers Registration Deadline for Small Employers
By December 31, 2025, California employers with one to four employees must register for the CalSavers Retirement Savings Program if they do not offer their own qualified retirement plan. This deadline represents the final rollout phase created by SB 1126, which expanded CalSavers to all employers with at least one employee. After this date, every eligible California employer—regardless of size—is required to enroll or certify an exemption.
California State Minimum Wage Increase
Effective January 1 2026, California’s statewide minimum wage will increase to $16.90 per hour for all employers, regardless of size. The exempt-employee salary threshold for executive, administrative, and professional classifications will increase to $70,304 annually (or $5,858.67 monthly) in line with the minimum wage adjustment.
COLORADO
Edgewater, Colorado Minimum Wage Increase
Effective January 1 2026, Edgewater’s minimum wage will rise from $16.52 to $18.17 per hour. The direct cash wage for tipped employees will go from $13.50 to $15.15 per hour. (Edgewater, Colo., Code of Ordinances Sec. 6-18-40; Ord. No. 2023-07)
Boulder County, Colorado Minimum Wage Increase
On January 1 2026, the minimum wage in unincorporated Boulder County will increase from $16.57 to $17.99 per hour. For tipped employees in those areas, the direct wage will increase from $13.55 to $14.97 per hour. (Boulder County Minimum Wage Ordinance 2023-4
Colorado State Minimum Wage Adjustment for 2026
Effective January 1 2026, Colorado’s statewide minimum wage is adjusted for inflation to $15.16 per hour, based on the CPI-U for the Denver-Boulder-Greeley area. The tipped employee minimum direct cash wage will be $12.14 per hour, corresponding to the full minimum minus $3.02. (Colo. Const. Art. XVIII, Sec. 15; COMPS Order 7 CCR 1103-1)
Colorado Minimum Salary for Exempt (EAP) Employees Adjusted for Inflation
Starting January 1 2026, in Colorado, the minimum salary threshold for executive/supervisory, administrative, and professional (EAP) employees (and other exempt classifications under the COMPS Order) will increase based on inflation. The minimum hourly wage for exempt computer employees and minimum annual salary for highly-compensated employees are also adjusted. (7 CCR 1103-1(2.5))
CONNECTICUT
Connecticut Paid Sick Leave Expansion
Starting January 1, 2026, Connecticut’s paid sick leave law will apply to employers with 11 or more employees in the state, expanding coverage beyond the current threshold of 25 employees. The law expands again on January 1, 2027, when paid sick leave requirements will apply to all employers with at least one employee. This change is part of the revisions enacted under Connecticut H.B. 5005 (Public Act 24-8).
Connecticut Minimum Wage Adjustment for 2026
Effective January 1, 2026, Connecticut’s minimum wage will be adjusted for inflation based on the percentage change in the U.S. Department of Labor Employment Cost Index for wages and salaries for all civilian workers between June 30, 2024, and June 30, 2025. The final rate is rounded to the nearest cent, consistent with Conn. Gen. Stat. §§ 31-58 and 31-60.
DELAWARE
Delaware Paid Family and Medical Leave Benefits Begin
Beginning January 1, 2026, Delaware’s Healthy Delaware Families Act (HDFA) requires employers with 10 or more employees to provide paid family and medical leave (PFML) benefits. Eligible employees may receive benefits for parental leave, family caregiving leave, or medical leave due to their own serious health condition. Employers with 10–24 employees are required to provide parental leave only.
Employees may take up to 12 weeks of PFML in an application year. While up to 12 weeks of parental leave may be used, medical leave and family caregiving leave are limited to a combined six weeks within any 24-month period. Employer and employee contributions to fund PFML began January 1, 2025. A 2024 amendment also updated the definition of “employer” under the law.
ILLINOIS
Illinois Releases New Workplace Laws for 2026 – What Employers Need to Know
Illinois has enacted several important labor and employment laws that will take effect in 2026, and now is a great time for employers and business owners to prepare. Below is a quick breakdown of the updates that may impact your policies, agreements, and workplace practices.
Key New Requirements for 2026
• Family NICU Leave: Employers with 16–50 employees must provide 10 days of unpaid leave to parents with a child in the NICU. Larger employers must provide up to 20 days.
• Worker Safety Standards: Illinois will automatically restore prior federal OSHA standards if federal protections are rolled back.
• Workplace Transparency Expansion: Contracts can no longer limit employees from engaging in concerted activity about work issues, and confidentiality terms in separation agreements must reflect the employee’s documented preference—not an employer-created clause. Employers also cannot shorten statutes of limitation or require out-of-state law or venues for Illinois employees.
• Protection for Victims of Violence: Employers cannot discipline or retaliate against employees who use employer-issued devices to record violent crimes against themselves or family members. Employees must also be given access to any related recordings or photos.
• Organ Donation Leave for Part-Time Workers: Part-time employees now qualify for leave under the Employee Blood and Organ Donation Leave Act.
• Paid Breaks for Nursing Mothers: Nursing employees must receive reasonable break time paid at their regular rate.
• Military Funeral Honors Leave: Employers with 51+ employees must provide up to 8 paid hours per month (40 hours per year) for trained employees participating in funeral honors details.
• Updated Background Check Requirements: Child care workers and volunteers must undergo a criminal background check every five years under a new secure state process.
• Illinois Human Rights Act Update: Fact-finding conferences become discretionary for certain discrimination charges.
What to Do Next
It may be helpful to review your current handbooks, employment agreements, leave policies, and internal procedures to ensure you’re ready for these 2026 changes. Early updates can help reduce compliance risks and support a smoother transition.
Illinois Limits the Use of AI in Employment Decisions
Effective January 1, 2026, amendments to the Illinois Human Rights Act limit how employers may use artificial intelligence in employment decisions. The law classifies the following as discriminatory practices: using AI in recruiting, hiring, promotion or other employment actions that result in discrimination based on protected classes; using ZIP codes as a proxy for protected classes; and failing to notify employees when AI tools are used in employment-related decisions. These changes apply to employers covered by the IHRA and reflect the state’s growing oversight of automated employment tools.
MARYLAND
Maryland’s Updated Mini-WARN Rules Now Fully Enforced
Maryland’s updated regulations for the Maryland Economic Stabilization Act, also known as the state’s mini-WARN Act, are now in effect as of October 13, 2025. This means employers must fully comply with strict notice rules before any mass layoffs or reductions in operations. Although the notice requirement became mandatory in 2020, enforcement was delayed until these final regulations were completed.
The mini-WARN Act applies to employers with at least 50 employees in Maryland and requires a 60-day written notice before certain layoffs, workplace shutdowns, or relocations that meet specific thresholds. The rules also extend to remote and telework employees within the state, treating them as part of a single workplace.
Employers must notify all affected employees, any union representatives, the State Dislocated Worker Unit, and local elected officials. Notices must include key details, such as the expected start date, contact person, and whether the shutdown is temporary or permanent. Limited exceptions exist for active business rescue efforts and natural disasters.
Violations can lead to civil penalties of up to 10,000 dollars per day, and both sellers and buyers in a business sale may have notice obligations. The Maryland Department of Labor has also updated FAQs to address open questions, with more guidance expected.
Now is a good time for employers to review workforce plans, assess potential triggers, and confirm communication and compliance steps, especially if remote teams are involved.
Maryland Paid Family & Medical Leave Benefits Begin January 1, 2026
Beginning January 1, 2026, under the Time to Care Act, eligible employees in Maryland will have access to paid family and medical leave. The law allows up to 12 weeks of benefits in a 12‑month period for reasons such as caring for a child, a family member’s serious health condition, the employee’s own serious health condition, military caregiver needs, or qualifying exigencies. An additional 12 weeks may apply in certain combined situations. Employer and employee contributions began October 1, 2024; anti‑retaliation and notice requirements became effective January 1, 2023. (2022 Md. S.B. 275, amended by 2023 Md. S.B. 828)
MAINE
Maine Minimum Wage Adjustment for 2026
Effective January 1, 2026, the state minimum wage in Maine will increase from $14.65 to $15.10 per hour, based on a 3.1% rise in the Consumer Price Index for Urban Wage Earners (CPI‑W) for the Northeast Region from August 2024 to August 2025. The tipped employee direct cash wage will increase to $7.55 per hour, and the monthly tip threshold will increase to $191. Agricultural workers will also be covered under the wage rate.
MICHIGAN
Michigan Minimum Wage Increase to $13.73
Effective February 21, 2026, Michigan’s minimum wage will rise to $13.73 per hour, according to the schedule approved by the Michigan Supreme Court and published by the Michigan Department of Labor & Economic Opportunity. The minimum cash wage for tipped employees is set at 60% of the standard minimum (approximately $7.97 per hour), with the maximum tip credit limited to the remaining 40%. These changes reflect the court‑enforced schedule from the state’s original 2018 voter‑initiated minimum wage measure and will be subject to annual inflation adjustments.
Michigan Minimum Wage Increase & Tip Credit Phase‑Out Schedule
On February 21, 2025, Michigan’s minimum wage increased to $12.48 per hour. The schedule established by the Michigan Supreme Court extends through February 21, 2030, by which point the tipped minimum wage must match the standard rate—with no separate tip credit.
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MINNESOTA
Minnesota Paid Family and Medical Leave — Notice Requirements (effective December 1, 2025)
By December 1, 2025, Minnesota employers must inform all current employees about their rights under the Paid Family & Medical Leave (PFML) program. New employees must receive this information within 30 days of their hire date. Notices must be provided in each worker’s primary language and employers must obtain acknowledgment of receipt. Additionally, employers are required to display official posters for the state’s standard plan (or an approved equivalent), and cover leave for reasons such as bonding, serious illness, military exigencies, and more. Employers must also issue earned sick-time notices. These benefits under PFML are scheduled to take effect on January 1, 2026.
Minneapolis Paid Sick and Safe Time Ordinance Amendments — Minneapolis, MN (effective December 31, 2025)
The city of Minneapolis recently passed amendments aligning local sick-and-safe time rules with the new state law under Minnesota’s paid leave regime. The changes are intended to reduce confusion or overlap between city-level and state-level requirements. The amendments take effect on December 31, 2025 — preparing employers to transition in early 2026 under the revised regulatory framework.
Minnesota Paid Family & Medical Leave Contributions
Effective January 1, 2026, Minnesota’s paid family and medical leave law takes effect. Employers must begin collecting employer and employee contributions. Eligible employees may access up to 20 weeks of paid leave in a benefit year for qualifying reasons, including their own serious health condition, bonding with a new child, or caring for a family member. Wage statements must reflect the contributions. The first premium is due April 30, 2026 for wages earned January 1‑March 31. Anti‑retaliation and notice requirements are in effect as of November 1, 2025.
Minnesota State Minimum Wage Increase for 2026
Effective January 1, 2026, Minnesota’s statewide minimum wage increases to $11.41 per hour for employees not covered by higher local rates. The law also adjusts the training wage for employees under 20 years of age to $9.31 per hour. These rates apply unless a city ordinance (such as in St. Paul or Minneapolis) requires a higher wage.
MISSOURI
Missouri Minimum Wage Increase to $15.00
Effective January 1, 2026, Missouri’s minimum wage will rise to $15.00 per hour, up from $13.75 per hour for 2025. The maximum tip credit for employers will increase appropriately under the statute to reflect the change (i.e., the tipped cash wage floor will be $7.50 per hour, making the maximum tip credit $7.50). These changes are governed by Mo. Rev. Stat. § 290.502 as amended by voter‑approved Proposition A.
MONTANA
Montana Minimum Wage Adjusted for Inflation
Effective January 1, 2026, Montana’s minimum wage will increase to $10.85 per hour, reflecting the annual cost‑of‑living adjustment. The change is based on the increase in the Consumer Price Index for All Urban Consumers (CPI‑U) from August 2024 to August 2025 and is rounded to the nearest five cents in accordance with Mont. Code Ann. § 39‑3‑409.
NEBRASKA
Nebraska Minimum Wage Increase to $15.00
Effective January 1, 2026, Nebraska’s minimum wage will increase to $15.00 per hour, as approved under Initiative 433. After 2026, the rate will be adjusted annually based on changes in the Consumer Price Index (CPI‑U) for the Midwest Region. (R.R.S. Neb. § 48‑1203)
NEW JERSEY
New Jersey Captive Audience Restriction Extension — Extension to Unionization Campaigns (effective December 2, 2025)
Beginning December 2, 2025, New Jersey will extend its “captive audience” restrictions — originally designed for certain employer-employee meetings — to apply during unionization campaigns as well. This means employers will be restricted from requiring or compelling attendance at meetings where union organizing or collective bargaining issues are discussed. This change strengthens protections for employees’ rights to freely consider union representation. (Note: As of this time, public commentary and legislative analysis suggest this extension, but users should verify with the latest state regulatory publications or NJ Department of Labor guidance.)
New Jersey Minimum Wage Increase
Effective January 1, 2026, the statewide minimum wage in New Jersey will increase to $15.92 per hour for most employees of large employers. Seasonal and small‑employer rates will increase to $15.23 per hour (from $14.53). The direct cash wage for tipped employees will rise to $6.05 per hour, while the maximum tip credit remains $9.87 per hour. These adjustments align with the annual inflation‑based increase as required under New Jersey’s minimum wage law.
NEW MEXICO
New Mexico Launches First-in-the-Nation Free Child Care Program — What Employers Should Know
New Mexico has officially rolled out a universal free child care program for all families, regardless of income. Beginning Nov. 1, child care for infants and toddlers will be offered at no cost to families, supported entirely by the state’s strong oil and gas revenue. This is a major shift that aims to ease financial pressure for working parents and may help employers in the state reach a wider pool of talent.
Industry experts call this a promising step toward addressing long-standing challenges for working parents. Many families continue to struggle with rising child care costs, often spending far more than the federal affordability guideline. These pressures have also pushed more employers to introduce supportive benefits like child care subsidies, onsite centers, or dependent care FSAs.
While New Mexico’s new program is a strong example of progress, experts note that employers still play an essential role in supporting working families. Federal incentives, such as the expanded employer-provided child care credit, add further momentum for businesses to enhance their benefits.
As more states explore similar initiatives, this development may spark new conversations about how companies can better support the real needs of today’s workforce and make family-friendly benefits part of their long-term strategy.
NEW YORK
New York Minimum Wage Increase for 2026
Effective January 1, 2026, New York’s minimum wage will increase to $17.00 per hour for employees working in New York City, Nassau County, Suffolk County and Westchester County, and to $16.00 per hour for employees in the remainder of the state. These increases are set under NY CLS Labor § 652.
OHIO
Ohio Minimum Wage Adjusted for Inflation
Effective January 1, 2026, Ohio’s statewide minimum wage will increase automatically under Article II, Section 34a of the Ohio Constitution. The law requires the rate to rise each January 1 by the inflation rate for the preceding 12‑month period ending the previous September. For 2026, the increase takes the minimum wage to $11.00 per hour (up from $10.70), and the threshold for employer coverage (based on annual gross receipts) rises to $405,000 (from $394,000).
RHODE ISLAND
Rhode Island Increases Temporary Caregiver Leave to Eight Weeks
Effective January 1, 2026, Rhode Island’s Temporary Caregiver Insurance (TCI) benefit under its paid family‑leave regime is extended from seven weeks to eight weeks per benefit year. This follows a phased increase from six to seven weeks on January 1, 2025. (2023 R.I. H.B. 7171, amending R.I. Gen. Laws § 28‑41‑35)
Rhode Island Data Transparency and Privacy Protection Act
Beginning January 1, 2026, the Rhode Island Data Transparency and Privacy Protection Act will grant Rhode Island residents enhanced privacy rights regarding their personal data. Covered businesses must comply with data‑controller obligations including transparency about data collection, sale of personal data, and consumer rights. The law does not apply to individuals acting in an employment context. (2023/2024 R.I. H.B. 7787 / S.B. 2500)
SOUTH DAKOTA
South Dakota Minimum Wage Adjusted for Inflation
Effective January 1, 2026, the minimum wage in South Dakota will increase to $11.85 per hour for non‑tipped employees, up from $11.50. For tipped employees, the minimum direct wage will rise to $5.93 per hour, up from $5.75. These changes follow the state law requiring annual adjustment by the Consumer Price Index and rounding up to the nearest five cents.
VIRGINIA
Virginia Minimum Wage Sets at $12.77 per Hour
Effective January 1, 2026, Virginia’s minimum wage will rise to $12.77 per hour, based on the annual inflation adjustment described in Va. Code Ann. § 40.1‑28.10(F). Although a prior schedule sought a $15.00 minimum for 2026, that increase was not enacted, so the current legal rate is the inflation‑adjusted figure.
VERMONT
Vermont Minimum Wage Adjusted for Inflation
Effective January 1, 2026, Vermont’s minimum wage will be automatically adjusted based on the CPI‑U (U.S. city average, not seasonally adjusted) for the 12‑month period preceding September 1, 2025. The statute limits the bump to a maximum increase of 5 % per year. (21 V.S.A. § 384)
WASHINGTON
Washington State Minimum Wage Adjusted for Inflation
Effective January 1, 2026, Washington’s statewide minimum wage will increase to $17.13 per hour based on the cost‑of‑living adjustment tied to the CPI‑W.
City of Tukwila Minimum Wage Increase
Effective January 1, 2026, all employers in the city of Tukwila, Washington must pay a minimum wage of $21.65 per hour, adjusted for inflation.
City of Bellingham Minimum Wage Increase
Effective January 1, 2026, the minimum wage in Bellingham, Washington will be $19.13 per hour, which is $2.00 above the state minimum for large employers.
King County Minimum Wage Adjustment
Beginning January 1, 2026, for the unincorporated areas of King County, Washington, the minimum wage for large employers is adjusted for inflation based on the CPI‐W. Mid‑sized employers pay $1.00 less than the large employer rate, and small employers pay $2.50 less.
City of Renton Minimum Wage Adjustment
From January 1, 2026, in Renton, Washington, the minimum wage for large employers (501+ employees) is adjusted for inflation. The mid‑sized employer rate is unspecified in the statute but is currently expected to be $1.00 less than the large employer rate.
FEDERAL UPDATE
Ban-the-Box Laws Expand: What Employers Need to Know
Ban-the-box laws continue to spread across the country, and many employers still misunderstand what these rules mean. These laws do not prevent employers from asking about criminal history entirely — instead, they delay the timing of the inquiry to ensure applicants are first evaluated on their qualifications.
Ban-the-box requirements now apply to federal contractors and many jurisdictions across the U.S. States and cities/counties with laws covering private-sector employers include:
California (statewide), Los Angeles, San Francisco
Colorado
Connecticut
District of Columbia
Gainesville, FL
Hawaii
Illinois
Des Moines, IA; Waterloo, IA
Maine
Maryland (statewide), Baltimore, Montgomery County
Massachusetts
Minnesota
Columbia, MO; Kansas City, MO; St. Louis
New Jersey
New Mexico
Buffalo, NY; New York City; Rochester, NY; Suffolk County, NY; Westchester County, NY
Oregon (statewide), Portland
Philadelphia
Rhode Island
Columbia, SC
Austin, TX; DeSoto, TX (potentially pre-empted by TX HB 2127, currently being challenged)
Vermont
Washington (statewide), Seattle, Spokane*
The purpose of these laws is to increase fairness for applicants with prior convictions by ensuring they are not automatically disqualified at the start. Employers can still review criminal history later in the hiring process, usually after a conditional offer. Some jurisdictions also limit what types of convictions can be considered or how far back an employer can look.
Many areas require an individualized assessment explaining why a conviction may or may not be job-related. Because of this, HR teams must stay updated on ban-the-box, fair chance, and clean slate laws, as these rules often overlap.
Background checks are still allowed — and sometimes required — but should be used thoughtfully and consistently. Focusing first on a candidate’s skills, experience, and qualifications remains the recommended approach before reviewing criminal history.
Get Ready for 2026: New IRS Rules Will Change Your W-2 Reporting
The IRS is rolling out major changes for the 2026 tax year, and now is the right time to make sure your payroll and timekeeping systems are ready. These updates come from the One Big Beautiful Bill Act, which introduces new federal tax deductions for qualified overtime and voluntary tips earned from 2025 through 2028.
What’s changing?
Employees who qualify will be able to deduct:
These deductions phase out at higher income levels, and they apply only to federal tax filings.
Because of this, the IRS is redesigning Form W-2 for 2026. Employers will need to report new data points, including:
This means your HR, payroll, and time systems must be able to separate FLSA overtime from state-based or employer-enhanced overtime, and distinguish true voluntary tips from mandatory service charges.
Key challenges to plan for:
• Correctly identifying which overtime qualifies under FLSA rules
• Mapping job roles to the IRS’ new tipped-occupation list
• Updating payroll systems to handle new W-2 boxes and codes
• Ensuring data accuracy, especially SSNs
• Communicating new deduction rules to employees, especially around income limits
Practical next steps:
Beginning preparations now will help prevent costly reporting errors and minimize employee confusion during year-end.
