As the new year approaches, now is the perfect time for employees and employers alike to review key employment law changes to understand their rights, ensure compliance, and prepare for what’s coming starting January 1st. As an employment law expert and legal commentator, my goal is to cut through the complexity of the current landscape. We are seeing a whiplash of federal policy shifts and an acceleration of highly localized state laws nationwide. For every employer with multi-state operations, this creates a major compliance burden, and for employees, these new federal employment laws in 2026 expand their rights. Here is what you need to know.
What Are New Federal Employment in 2026? What Employees & Employers Need to Know to Prepare for the New Year
The federal landscape sets the foundational rules, which we will explore, but in 2026, the real action to note is in state legislation. The following essential legal changes cover federal worker status and pay, and afterwards, we’ll pivot to the complex, widespread trends shaping employment nationwide.
Related Article: New Federal-Level Employment Laws to Know
Federal Landscape: Independent Contractor, Pay, and Postings
While the federal front showed reduced regulatory activity in 2025, Congress is focused on legislative changes that could redefine the workforce. Still, there are critical updates for federal employees and contractors to be aware of.
1. New Independent Contractor Standard (H.R. 1319)
- Impact: House Bill H.R. 1319 (The Modern Worker Empowerment Act), which has passed the House Committee on Education and Workforce, aims to amend the Fair Labor Standards Act (FLSA) and the National Labor Relations Act (NLRA) to clarify the standard for determining worker status.
- The Standard: Under the proposed standard, an individual would be considered an independent contractor if the company does not exercise “significant control over the details of the way the work is performed” and the individual has the “opportunities and risks inherent with entrepreneurship.”
- Factors That Cannot Be Used: The bill also specifies that certain factors cannot be used to determine employee status, such as requiring the individual to comply with legal/statutory requirements, health and safety standards, or contractually agreed-upon performance standards (like deadlines).
- For Employees/Contractors: This is a crucial clarification, as independent contractors do not have the same rights as employees (e.g., minimum wage, overtime, workers’ compensation, or the right to organize).
2. Government Employee Pay and Contractor Postings
- For Federal Employees (General Schedule): The President’s Alternative Pay Plan will provide a 1% base pay increase beginning in January 2026. Special salary rates will provide an additional raise for certain law enforcement officials.
- For Federal Contractors: You must comply with additional posting requirements, including the Federal Contractor Minimum Wage, the NLRA, the Walsh-Healey Act, E-Verify, and Pay Transparency notices.
Nationwide State Trends: Leave, Pay, and AI
The most significant compliance challenges for multi-state employers in 2026 stem from the acceleration of state-level mandates in leave, compensation, and technology oversight.
Related Article: AI & Employment Law Update: Harper v. Sirius XM Radio, LLC
1. Washington State Paid Leave Expansion (Effective Jan. 1, 2026)
Washington state is significantly expanding its Paid Family and Medical Leave (PFML) program, requiring specific preparation from employers.
- Job Protection: Job protection eligibility is accelerated, now applying to employers with 25 or more employees (reduced from 50) and requiring only 180 calendar days of tenure (reduced from 12 months/1,250 hours).
- Health Coverage: Employers who must provide job protection must now maintain the employee’s health insurance throughout the leave, regardless of whether the employee also qualifies for FMLA.
- Leave Use & Coordination: The minimum consecutive absence required to trigger benefits is reduced from eight hours to four consecutive hours. Employers must also provide timely written notice to employees regarding how FMLA and PFML job protection time will be coordinated.
- Domestic Violence Leave: The Domestic Violence Leave Act (DVLA) is expanded to include protections for victims of hate crimes.
Related Article: Mental Health Awareness Month: Psychological Safety at Work & the New Frontier of Compliance
2. Acceleration of Pay Transparency
Pay transparency and equal pay amendments continue to be a dominant trend, with several new laws coming into effect that enhance employee rights.
- Mandatory Pay Disclosures: The trend requires employers to provide pay scale or salary estimates in job postings.
- Inclusivity & Recourse (CA-SB 642): California’s new law is a prime example, prohibiting pay disparity between employees of “another sex” (including non-binary individuals) and expanding the statute of limitations to three years.
Related Article: Equal Pay Day: What Employers and Employees Need to Know About Pay Equity
3. AI Regulation and Anti-Discrimination
- Trend: State laws are showing a trend toward enhanced employee rights in anti-discrimination and workplace protections, with federal laws likely influencing or aligning with this movement.
- Example (CA-FEHA): California has applied discrimination law directly to the use of Automated-Decision Systems (ADS) in employment decisions, requiring transparency and robust record-keeping to prevent algorithmic bias.
Related Article: Implications of the Trump AI Executive Order: What Employers and Employees Need to Know
Book Me for a Segment to Bring Law to Light as an Expert on New Federal Employment Laws in 2026 for Your Audience.
It’s important to understand that employment law complexity is accelerating, not slowing down. Let me help you keep pace with new federal employment laws in 2026 and beyond. Changes to worker classification, non-compete thresholds, paid family leave programs, AI regulation, and pay transparency laws will all continue expanding in 2026 and beyond. As a seasoned legal professional, my goal is to provide the expert analysis you need to navigate these major shifts.
By taking proactive steps to audit systems and update policies, employers mitigate legal risk and leverage a highly skilled workforce. Simultaneously, employees must know their expanded rights, from new compensation standards to protection against exploitative contract terms.
To learn more about my work as a mediator and neutral, including my focus on employment, Title IX, sex abuse, class action, and mass torts mediated cases, please reach out to me on LinkedIn @Angela J. Reddock-Wright, Esq., AWI-CH, or click here.
You may also reach me at Signature Resolution.
For media inquiries, please reach out to josh@kwsmdigital.com.
This communication is not legal advice. It is educational only. For legal advice, consult with an experienced employment law attorney in your state or city.
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