2026 Employment Law Changes: What Small Employers Should Check Now

Nearly 50 employment law changes took effect across the nation in the new year, and even very small employers are feeling the impact, according to a webinar hosted by SurePayroll featuring experts from SixFifty, an HR and employment law compliance platform.

The good news is you don’t need to become an expert to comply with the 2026 employment law updates and related 2026 HR compliance changes. You do need to understand which changes affect your business so you can comply with the new laws.  

This post helps break down key small business employment law changes for 2026 so you can understand what may apply to your business.

“Minimum wage, noncompetes, family and medical leave, AI, EEO, and pay transparency laws for 2026 are all areas where employers are seeing continued movement,” said Meira Bashir, legal product team member at SixFifty.  

SixFifty Chief Legal Officer, Ryan Parker shared that it’s “important to be aware that when it comes to legal updates, not all effective dates are created equal.”

Which Wage or Exemption Changes Could Already Be Affecting My Payroll?

Some of the most immediate 2026 changes affect pay, specifically minimum wage rates and salary thresholds used to help determine overtime exemption. These updates can directly affect overtime eligibility, payroll calculations, and budgeting.

Areas to review:

• Confirm hourly pay rates by work location. Minimum wage and pay requirements depend on where an employee performs their work, not where your business is based.
• Recheck salary exemption thresholds. Several states adjusted the salary levels used to determine whether an employee may be classified as exempt from overtime.
• Look for local rules that could apply to employees. City or county laws may also introduce wage, posting, or notice requirements.  
• It’s also worth your time to monitor developments from the U.S. Department of Labor (DOL) related to federal Fair Labor Standards Act (FLSA) salary exemption thresholds, which change independently of state rules.

When wage rates change, payroll software that handles automatic tax calculations can be essential. If you work with a small business payroll solution like SurePayroll, once you update new rates in your account, we will automatically calculate payroll, including withholding and filing deductions based on the new rates.  

Paid and Unpaid Leave

In 2026, several states expanded Paid Family and Medical Leave (PFML) rules in ways that may affect small employer leave requirements.

“Even if you have fewer than 50 employees, this issue is still relevant,” said Seth Barany, legal product counsel, SixFifty. “Many states have expanded family and medical leave requirements to smaller businesses.”  

These changes vary by state, but may often include lowering employer-size thresholds, extending the length of available leave, or adding new reasons employees can take protected time off.

For example, in Colorado, eligible employees can now take up to 12 weeks of paid Neonatal Care Leave while their newborn is receiving inpatient care in a neonatal intensive care unit.  

Washington state also made PFML updates, especially around job protection eligibility. Specifically, beginning January 1, 2026, job-restoration requirements may apply to employers with 25 or more employees, with further thresholds phased for 2027 and 2028.

Other states with notable PFML program activity in 2026 include Delaware, Maine, Minnesota, and New York.

This isn’t a full list of every leave-related change, but it highlights where small business employers are most likely to see updates. Because requirements depend on where employees work, it’s important to confirm which rules apply in each state where you have employees.

Factors to review include:

• Accrual rates. How leave is earned, whether accrual is capped, and whether frontloading options are available.
• Covered family members. Which relationships qualify for leave under state or local rules.
• Notice and documentation requirements. What employees must provide and what employers are required to share.
• Remote work considerations. Whether an employee’s work location determines their leave entitlements, even if your business is based elsewhere.

A payroll solution that includes time and attendance can help owners more easily manage track leave time, including paid time off, vacation, FMLA, and sick leave. With SurePayroll, employers can seamlessly integrate stratustime or choose from a selection of popular time-tracking tools that can help reduce manual data entry.  

Are There New Rules Around AI Or the Use of Automated Tools in Hiring?

To set expectations around what these laws actually cover: “When regulators talk about AI, they’re often referring broadly to automated systems that analyze data and produce recommendations or predictions,” said Parker.  

In 2026, more states are regulating how employers use artificial intelligence and the use of automated tools in recruiting and screening. These laws often include a focus on transparency and fairness, particularly when technology plays a role in hiring, screening, or other employment-related decisions.

Many of these laws and regulations define “automated tools” broadly. As a result, common technologies, such as résumé-screening software or automated candidate-ranking tools, could fall within scope, even if they’re widely used or provided by a third-party vendor.

For most small employers using standard applicant tracking or job boards, these rules don't yet apply — but monitor if your tools begin auto-screening or auto-ranking candidates.

Depending on the jurisdiction and the tools used, requirements may include providing advance notice to applicants, documenting how tools are used, or measures to help ensure that systems do not result in bias.

For small employers, it can help to check whether:

• Your hiring or screening software is considered an automated decision tool under the applicable law(s). Laws often apply based on if a tool influences decisions, not just whether it replaces human judgment.
• Applicants must receive advance notice about the use of artificial intelligence. Some jurisdictions require disclosure when AI or automated tools are used to make or assist in making hiring or employment decisions.
• Your vendor provides documentation or compliance support from a neutral third party. In many cases, requirements related to bias review or recordkeeping depend on information supplied by the software provider.

Do I Need to Update Required Notices, Postings, or Recordkeeping?

In 2026, several states implemented updated required workplace notices, including changes to what must be posted onsite and when electronic delivery is allowed or required. These updates are especially important for employers with remote or hybrid staff, where workplace posting requirements for 2026 may extend beyond a physical workplace.

In many cases, updated notices reflect changes to minimum wage rates, paid leave programs, or employee rights and protections. Some states also refined how notices must be distributed, making digital access an important part of compliance.

For small employers, the key is understanding which notices apply based on where employees work and how those notices must be shared.

Items to review include:

• Updated state or local posters and new hire notices. Many states refresh required posters annually or when employment laws change.
• Remote-friendly digital distribution. If you have remote or hybrid employees, some states require that mandatory notices be provided electronically.
• Posting requirements tied to equal employment opportunity (EEO) or technology use. Certain jurisdictions added notice obligations related to equal employment rights or the use of automated tools in employment decisions, which may require updated postings or disclosures.

Through their SurePayroll account, owners can download and print labor law posters for the states where they have workers.  

How Small Business Owners Can Make Sense of These Changes

When you’re a small business owner, it’s not always easy to determine which employment laws apply to your business. There are practical ways to help narrow your focus and avoid information overload.

How Do I Quickly Determine Which Rules Apply to My Business?

Remember, employment laws often apply based on where an employee physically works, and where your business is based. This location-based approach is especially important for multi-state payroll compliance, even if you only have one employee working outside your home state.

A practical first step includes making a simple list of where each employee works, whether in an office, remotely, or on a hybrid schedule. Once you have that, you can focus on the states that apply to your team.

From there, it can help to review a few categories that can affect small business owners:  

• Minimum wage updates
• Wage and exemption thresholds
• Paid and unpaid leave requirements
• Pay transparency rules in job postings
• Anti-discrimination and AI-related requirements
• Posting and notice updates

Which policies are most likely to need an update?

After you’ve identified which laws apply to your business, a good next step is to review your business policies or employee handbook for sections affected by recent changes.  

Written policies that are most often impacted include:

• Paid sick leave and family leave policies
• Overtime and employee classification language
• Updates to wage levels or exemption thresholds  
• Anti-discrimination and technology  
• Required postings and notices

Tips to Help Prioritize

Not every employment law update affects day-to-day operations in the same way. A helpful approach is o think about your review in terms of what needs attention first.

Here’s a simple way to prioritize without trying to do everything at once:

1. ‍Start with anything that affects pay accuracy. If minimum wage rates or exemption thresholds change where your employees work, take time to update or confirm that your payroll input reflects current requirements. Small adjustments can influence overtime eligibility or pay calculations. ‍
2. Review policies tied to employee rights and protections.  A quick review of leave programs, protected time off, and anti-discrimination policies can help you create clear expectations and reduce the chance of confusion later. ‍
3. Confirm required notices or postings. These updates are typically straightforward and can help you meet baseline compliance expectations, especially if you have remote or hybrid team members. ‍
4. Look at emerging areas, such as AI-related hiring rules. These rules may or may not affect your current tools or processes, but they’re becoming more common and are worth keeping on your radar.

What’s the simplest way to keep up with 2026 changes?

Once you’ve narrowed your focus and prioritized your list, the next question is how to keep up going forward without turning compliance into a full-time job.

It can be helpful to build a short, repeatable review into your routine. A brief quarterly “compliance sweep,” can be enough to catch updates related to wages, leave, postings, or hiring practices before they become urgent.

When updates are needed, keeping policies short, plain, and realistic matters, especially for very small teams.  

Where to Turn If You’re Not Sure Which Rules Apply

Some questions may be easy to answer, such as whether your state’s minimum wage increased, while others require a closer look, especially if you have remote employees or use technology in your hiring process.

When you need clarity without overcomplicating things, some practical resources can help.

Use State-Specific Summaries or Checklists

State-level summaries offer a plain-language view of what changed and where. They can help you quickly pinpoint which updates affect your policies, payroll, or notices without digging through full statutes or regulatory text.

Seek Legal or HR Guidance for Unique Situations

If you operate in multiple states, have remote employees in different jurisdictions, or use less common job classifications, a brief consultation with an HR or legal professional can provide focused direction for your specific situation.

Consider an HR Compliance Tool

A legal and HR compliance tool like SixFifty is another way small business owners can get support understanding employment law changes and generating compliant policies based on where their employees work.  

How SurePayroll Supports You

As wage and classification rules evolve, having payroll tools that support accurate calculations becomes an important part of payroll compliance for small businesses.

SurePayroll can help small business owners translate updated payroll policies into day-to-day payroll tasks by:

• applying payroll calculations based on updated information you enter. This can help ensure consistent wage, overtime, and salary calculations.
• aligning withholding and reporting with updated payroll details. When wage or salary amounts change, related payroll calculations and reports update accordingly.
• providing payroll previews before you run payroll. Previews make it easier to spot inconsistencies or unexpected changes before payroll is finalized.
• generating clear payroll reports. Organized reports can support bookkeeping needs and make it easier to respond to routine questions or audits.

You make the decisions, and SurePayroll helps keep payroll calculations consistent and accurate.

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