Perspectives

Minnesota employers should take note of updated minimum wage rates that took effect in 2026. These annual adjustments are tied to inflation and carry important compliance obligations for businesses operating throughout the state-with separate requirements for Minneapolis and St. Paul.

Statewide Minnesota Minimum Wage (Excluding Minneapolis and St. Paul)

As of January 1, 2026, Minnesota’s minimum wage increased:

• Standard minimum wage: from $11.13/hour to $11.41/hour
• 90-day training wage (employees under age 20): from $8.85/hour to $9.31/hour

These rates apply to all hours worked, regardless of whether an employee is full-time or part-time and regardless of how they are paid (hourly, salary, commission, etc.)

Importantly, Minnesota does not allow a tip credit. Employers may not count tips toward meeting minimum wage obligations. Employees who receive tips must be paid at least the full minimum wage, in addition to any tips earned.

Minneapolis Minimum Wage

Employers with employees working in Minneapolis are subject to higher local minimum wage requirements. As of January 1, 2026, the Minneapolis minimum wage increased:

• From $15.97/hour to $16.37/hour

This rate applies to all employees working in Minneapolis, regardless of employer size.

St. Paul Minimum Wage (Varies by Employer Size)

St. Paul continues to phase in minimum wage increases based on employer size:

• Employers with 5 or Fewer Employees:
  • Increases from $13.25/hour to $14.25/hour on July 1, 2026
• Employers with 6-100 Employees:
  • Increases from $15.00/hour to $16.37/hour on July 1, 2026
• Employers with 101+ Employees:
  • Increased from $15.97/hour to $16.37/hour on January 1, 2026

Employers with operations in multiple locations should confirm which wage requirements apply to each employee based on where the work is performed.

Employer Compliance Requirements

In addition to updating payroll rates, employers must also meet notice and posting obligations:

• Update minimum wage posters to reflect the new rates
  • Posters must be displayed in conspicuous location accessible to employees
• Provide written notice to employees of any change to their rate of pay before the change takes effect

Failing to update pay rates, notices, or postings can expose employers to wage claims, penalties, and compliance issues.

How WFJ’s Compliance Center Can Help

Wage and hour compliance continues to be a common source of employer risk-particularly for businesses operating across multiple cities with different wage laws. WFJ’s Compliance Center helps employers stay ahead of changing requirements through proactive guidance, compliance audits, policy support, and ongoing education. 

If you have questions about how these 2026 minimum wage updates impact your business-or would like help reviewing your wage practices, postings, or employee communications-our team is here to help you stay compliant and avoid costly missteps.

AI is changing the way music is created, distributed, and consumed-and not always in ways that benefit artists. If you’ve spent any time on streaming platforms lately, you may have come across an artist who seemed to appear overnight: polished tracks, impressive streaming numbers, and a rapidly growing fanbase. Recent controversy around bands like The Velvet Sundown has raised an important question for musicians and creators:

If AI can create music-even “artists”-what protections exist to stop someone from using your voice, likeness, or identity without permission?

Tennessee has taken a major step toward answering that question.

The ELVIS Act: A First-of-Its-Kind Law in the U.S. 

The ELVIS Act (Ensuring Likeness Voice and Image Security Act)- the first legislation in the United States specifically designed to protect musicians and other individuals from the unauthorized use of their voices through AI, deepfakes, and voice-cloning technology.

The ELVIS Act expands Tennessee’s existing Name, Image, and Likeness (NIL) protections and introduces several important updates, including:

• Expanded definition of “voice”.
  • “Voice” is now defined as a sound in a medium that is readily identifiable and attributable to a particular individual-whether it is the actual voice or a simulated version of that voice. 
• Property rights over identity.
  • Every individual has a property right in the use of their name, photograph, voice, and likeness in any medium or manner.
• Civil liability for unauthorized commercial use. 
  • Anyone who knowingly uses or infringes on an individual’s name, photograph, voice, or likeness for advertising, merchandise, fundraising, or other commercial purpose is to produce an individual’s photograph, voice, or likeness without authorization.
• AI-specific liability.
  • The law creates civil liability for distributing or transmitting content to an algorithm, software tool, or technology service when the primary purpose is to produce an individual’s photraph, voice, or likeness without authorization.
• Lowered knowledge threshold for liability.
  • The standard has shifted from “had knowledge” to “knew or reasonably should have known” that the use was unauthorized-making it easier for creators to hold bad actors accountable.

Why This Matters for Musicians and Creators 

The ELVIS Act closes a growing legal gap by formally extending name, image, and likeness protections to include voice-both real and simulated. This is critical as AI tools become more sophisticated and more accessible.

For musicians, this law:

• Protects against unauthorized voice cloning
• Limits the commercial use of AI-generated versions of your voice
• Creates legal consequences for businesses and platforms that misuse identity-based AI tools
• Expands accountability for those who “should have known” their use was unauthorized

In short, Tennessee has created meaningful guardrails that protect creative identity in the age of AI.

A National Signal from a Major Music State

Tennessee’s leaders on this issue matters. The state supports more than 61,000 industry jobs and contributes $5.8 billion to the state’s economy through music and creative industries. The ELVIS Act sets a precedent that other states are likely to follow as AI-generated content continues to reshape entertainment, marketing, and media.

As AI expands into nearly every area of business and creative work, artists should stay informed about legislative changes-especially how emerging technology may impact their voices, likenesses, and revenue streams. Understanding your rights is the first step to protecting your work.

How WFJ Can Help

WFJ regularly advises business owners and creatives navigating contracts, licensing, and intellectual property rights. As laws around AI evolve, our team can help you:

• Understand how new legislation applies to your creative work
• Protect you voice, image, likeness, and ideas
• Enforce your rights when unauthorized use occurs
• Structure contracts to account for AI-related risks

If you’re concerned about how AI may affect your work, your brand, or your income, WFJ can help you navigate this rapidly changing legal landscape with clarity and confidence.

About the Author
Paige Kochanski is an attorney in WFJ’s Entertainment Law group. Her practice focuses on music, film, and creative content matters. She regularly assists clients with contracts related to music, songwriting, publishing, copyright, and licensing, and is passionate about helping businesses and creatives protect their work and their rights.

Liens & Bonds Protect Cash Flow

For many contractors, subcontractors, and suppliers, lien and bonds are often viewed as last-resort tools-something to use only when a project has gone seriously wrong. In reality, liens and bonds are foundational legal protections, designed to preserve cash flow and prevent disputes long before they escalate.

Used correctly and early, liens and bonds are not aggressive. They are practical business tools that protect payment rights, improve leverage, and create clarity for everyone involved in a project.

Why Cash Flow Protection Matters

In construction, cash flow is more than a financial metric-it’s the lifeblood of the business. Delayed or missed payments can ripple through payroll, materials, subcontractors, and future projects.

Liens and bonds exist because the construction industry carries unique payment risk:

• Multiple parties working under layered contracts
• Payment dependent on project programs and owner funding
• Long timelines between work performed and payment received

Legal protections help balance those risks.

Liens and Bonds are Preventative Tools

Contrary to common belief, preserving lien and bond rights does not mean starting a dispute. In fact, these tools often prevent disputes. 

By providing notice and preserving rights:

• Expectations around payment are clarified early
• Issues are identified before they become crises
• Payment discussions remain structured and professional
• Leveral exists without immediate litigation

Many payment issues are resolved simply because lien or bond rights were preserved correctly and on time.

Understanding Lien Rights

A mechanics lien provides security for payment by tying unpaid work or materials to the property itself. It encourages resolution because unresolved liens can affect financing, refinancing, and property transfers.

Key points to understand:

• Lien rights are deadline-driven and unforgiving
• Notices often must be sent early in the project
• Missing a deadline can permanently eliminate rights
• Proper compliance strengthens negotiating leverage

Preserving lien rights is about keeping options available, not creating conflict.

Understanding Bond Claims

On bonded projects, payment bonds serve a similar function-providing an alternative path to payment when direct payment stalls.

Bond Claims:

• Protect subcontractors and suppliers on pubic and private projects
• Shift payment disputes away from property owners
• Often require strict notice and timing compliance
• Can resolve payment issues without litigation

Knowing whether a project is bonded-and how to preserve bond rights-is critical to cash flow protection.

Why Using These Tools Early Matters

Waiting too long to address payment protection increases risk. Once deadlines pass, leverage disappears.

Early use of lien and bond protections:

• Signals professionalism and preparedness
• Keeps projects moving forward
• Reduces the likelihood of litigation
• Protects relationships by addressing issues before emotions escalate

When used as part of a routine process, these tools become normal business practices-not confrontational actions.

Liens and Bonds Support Strong Business Relationships

Clear expectations protect everyone. When lien and bond rights are handled properly:

• Payment obligations are transparent
• Disputes are easier to resolve
• Business relationships are preserved
• Projects are more predictable

Strong legal protections often lead to fewer conflicts-not more.

Practical Guidance Makes the Difference

At Wagner, Falconer & Judd, we work with construction businesses to treat liens and bonds as strategic tools, not emergency measures. Our approach focuses on early planning, clear communication, and practical compliance-so clients protect cash flow while maintaining professional relationships.

Because getting paid shouldn’t require a fight-and the right legal protections help ensure it doesn’t.

Growth is a good thing-but it changes more than revenue, head count, and market reach. As businesses scale, their risk profile evolves, often in ways that aren’t immediately obvious.

Strategies that worked well for a smaller, more agile organization may no longer be sufficient once operations expand, teams grow, and decisions become more complex. Without adjusting legal strategies to match that growth, businesses can unknowingly increase exposure in critical areas.

Understanding how risk shifts-and planning for it-allows growth to happen with confidence instead of uncertainty.

Why Growth Changes Risk

As a business grows, its legal footprint expands. New locations, additional employees, larger contracts, and more sophisticated operations all introduce new variables.

Common growth-related risk shifts include:

• Increase regulatory obligations
• Great exposure to employment-related claims
• Higher contract values and longer-term commitments
• More complex payment and cash flow risks
• Expanded liability tied to customers, vendors, and the public

What once felt manageable can quickly become fragmented if legal strategies don’t keep pace.

Early-Stage Risk: Informal but Limited

In early stages, businesses often operate with:

• Fewer employees
• Shorter contracts
• Limited geographic reach
• More informal processes

Risk exists, but it’s typically narrower in scope. Leadership is closely involved in decisions, and communication is direct. Legal needs often focus on basic contract formation, entity structure, and foundational compliance.

While this approach can work initially, it doesn’t scale well.

Mid-Growth Risk: Complexity Emerges

As businesses expand, risk becomes more layered.

Growth often brings:

• Supervisors and managers making daily decisions
• Multiple contracts negotiated simultaneously
• Inconsistent practices across teams or locations
• Greater reliance on templates and policies

At this stage, gaps being to appear. Outdated contracts, unclear policies, and inconsistent enforcement can create exposure-often without immediate warning signs.

This is where legal strategy becomes essential, not optional.

Mature Growth Risk: Exposure Multiplies

For larger or more established organizations, risk is no longer isolated. One issue can have cascading effects across departments, locations, or projects.

At this stage, businesses must manage:

• Multi-state or multi-jurisdiction compliance
• High-value contracts and payment disputes
• Employment policies under increased disputes
• Public-facing risk, including personal injury exposure
• Greater likelihood of audits, claims and litigation

Without structured legal oversight, small issues can escalate quickly.

Scaling with Confidence

Growth should not mean increased uncertainty. Businesses that adapt their legal strategies as they scale are better positioned to:

• Protect cash flow
• Reduce disputes
• Respond quickly to change
• Support leadership decision-making
• Sustain long-term success

Legal planning doesn’t slow growth-it supports it by removing unnecessary friction and preventing avoidable setbacks.

Legal Insight for Every Stage of Growth

At Wagner, Falconer & Judd, we work with businesses at every stage-from early growth to large, complex operations. Our focus is helping clients understand how risk evolves and building legal strategies that grow alongside their business.

Because growth changes risk-and your legal strategy should change with it.

California employers should be aware of a new compliance obligation under the Workplace Know Your Rights Act (the “Act”). This law requires employers to provide employers to provide employees with a written notice outlining certain workplace rights by February 1, 2026, and annually thereafter. The notice must also be provided to all new employees at the time of hire.

The notice must be distributed as a stand-alone document using the employer’s usual method for communicating employment-related information-such as personal delivery, email, or text message. For unionized workforces, employers must also provide the notice annually to the employee’s exclusive collective bargaining representative, either electronically or by regular mail.

The California Labor Commissioner has issued an official “Know Your Rights Act” notice template, currently available in English and Spanish. Employers are required to provide the notice in the language they typically use to communicate with the employee-provide the Labor Commissioner’s template is available in that language. Because the template is expected to be updated annually, employers should ensure they are using the most current version each year.

What the Notice Must Include

The notice must inform employees of several key rights and protections, including:

• The right to worker’s compensation benefits
• The right to receive notice of an I-9 inspection by immigration agencies
• Protections against unfair immigration-related practices
• The right to organize a union or engage in concerted activity
• Constitutional rights when interacting with law enforcement in the workplace

Emergency Contact Notification Requirements

The Act also introduces new obligations related to employee emergency contacts. Employers must notify an employee’s designated emergency contact if the employee is arrested or detained at the worksite-but only if the employee previously requested that the employer make such contact.

If an arrest or detention occurs outside the worksite, but during work hours or while the employee is performing job duties, the employer must notify the designated emergency contact if the employer has actual knowledge of the arrest or detention. 

Employers must give current employees the opportunity to designate an emergency contact by March 30, 2026, and must offer the same opportunity to all new hires at the time of employment.

Anti-retaliation, Recordkeeping, and Penalties

Employers are prohibiting from retaliating against employees who exercise-or attempt to exercise- their rights under the Act. Employers must also maintain records demonstrating compliance for three years, including documentation showing when each required notice was provided.

Failure to comply with the Act may result in civil penalties ranging from $500 to $10,000 per employee. 

When laws change, your obligations can change with them WFJ works alongside businesses to translate new legal requirements into clear, actionable steps-helping you remain compliant, prepared, and protected before issues arise.

If it feels like the rules keep changing faster than your business can keep up, you’re not imagining it.

New laws. Updated regulations. Revised guidance. Shifting enforcement priorities. For many employers and business owners, compliance has become a constant background stress—one that never fully goes away. This ongoing pressure has a name: compliance fatigue.

Compliance fatigue doesn’t mean businesses don’t care about following the law. It means the volume and pace of change can be overwhelming, especially when compliance is layered on top of running day-to-day operations. Left unaddressed, fatigue increases the risk of missed updates, inconsistent practices, and reactive decision-making.

The good news? Compliance doesn’t have to feel this way. With the right systems and mindset, it can become sustainable, predictable, and far less stressful.

Why Compliance Feels So Overwhelming

Most businesses don’t struggle with compliance because they lack effort. They struggle because compliance today is:

• Constantly changing – Employment, benefits, construction, licensing, and regulatory rules are rarely static.

• Spread across multiple areas – HR, payroll, management, operations, and leadership all play a role.

• Poorly translated – Laws are written for lawmakers and regulators, not for day-to-day business operations.

• Reactive by default – Many businesses only address compliance when a problem arises.

Over time, this creates a cycle of urgency and exhaustion. Everything feels important. Nothing feels fully complete.

The Cost of Compliance Fatigue

Compliance fatigue isn’t just frustrating—it’s risky.

When teams are overwhelmed, compliance often becomes:

• A “check-the-box” exercise

• Inconsistent across departments or locations

• Dependent on one or two people holding institutional knowledge

• Addressed only after an issue surfaces

This increases exposure to audits, employee complaints, disputes, and penalties—often at a much higher cost than proactive planning would have required.

Shifting the Mindset: Compliance as a System, Not a Sprint

One of the most effective ways to reduce compliance fatigue is to stop treating compliance as a series of urgent tasks and start treating it as a system.

Sustainable compliance is built around repeatable processes, clear responsibility, and regular review—not constant fire drills.

Here’s how to start.

1. Prioritize What Actually Matters

Not every regulation carries the same level of risk. Trying to treat all compliance obligations as equally urgent is a fast track to burnout.

Start by identifying:

• Which laws apply directly to your business

• Which areas carry the highest risk if handled incorrectly

• Where enforcement activity is increasing

This allows you to focus your time and resources where they will have the greatest impact.

2. Assign Clear Ownership

Compliance often fails when “everyone” is responsible—which usually means no one truly is.

Clear ownership matters. Whether it’s HR, operations, finance, or leadership, each compliance area should have:

• A designated point person

• Defined responsibilities

• A clear escalation path when questions arise

Ownership doesn’t mean handling everything alone—it means knowing who is accountable for making sure it gets addressed.

3. Build Regular Review Cycles

Many compliance issues stem from policies and practices that haven’t been reviewed in years.

Instead of waiting for change to force action, establish:

• Annual or semi-annual policy reviews

• Scheduled contract and document check-ins

• Regular updates to employee communications and training

When review becomes routine, compliance stops feeling like a surprise.

4. Translate Rules Into Practical Steps

Legal compliance shouldn’t live only in statutes or policy manuals. It needs to be translated into how work actually gets done.

Ask:

• Do managers understand how these rules affect daily decisions?

• Are policies written in clear, plain language?

• Do employees know what’s expected of them?

Clarity reduces mistakes—and confidence reduces fatigue.

5. Get Proactive Guidance

One of the biggest drivers of compliance fatigue is uncertainty. Businesses spend significant time trying to interpret rules on their own, often without knowing if they’re focusing on the right issues.

Proactive legal guidance helps:

• Filter out noise and focus on what matters

• Anticipate changes before they become problems

• Provide practical solutions tailored to your operations

Compliance is far more manageable when you’re not navigating it alone.

Compliance Should Support Your Business—Not Drain It

At Wagner, Falconer & Judd, we believe compliance should add value, not create unnecessary stress. Our role is to help clients move from reactive compliance to confident, sustainable systems that support long-term success.

If compliance feels overwhelming, that’s a signal—not a failure. With the right structure, clarity, and support, it can become just another well-managed part of doing business.

And it doesn’t have to be exhausting.

What 2025 Taught Employers About Compliance and What’s Coming in 2026

As 2025 comes to a close, employers across the country are catching their breath after one of the busiest years in recent memory for employment law changes. From federal court rulings that upended Department of Labor overtime thresholds to a surge of new state-level requirements around paid leave, AI use, and non-compete agreements, compliance has been a moving target.

At Wagner, Falconer & Judd, we’ve spent the year helping employers navigate these changes-and now it’s time to look ahead. As you prepare for 2026, here’s what stood out in 2025, what’s on the horizon, and what proactive steps HR leaders and business owners should be taking right now.

Federal Highlights: Tax Deductions, Overtime Thresholds & AI-Usage Oversight

“One Big Beautiful Bill” (OBBB)

Although still under regulatory development, the OBBB introduces important employer and payroll-related changes. For example:

• New deductions for “qualified tips” and “qualified overtime” are available for employees from 2025-2028.
• Reporting obligations: Employers must file information returns and furnish statements showing certain cash tips and total “qualified overtime” paid during the year.
• For piece-rated workers (a historically tricky classification area), if they are non-exempt under the Fair Labor Standards Act (FLSA) and work over 40 hours in a workweek, the employer must track all hours and overtime-as the tax deduction framework still applies.

Action items for employers: 

• In your payroll and HR systems, prepare to accommodate the new reporting lines (e.g, total qualified overtime, cash tips) and ensure your W-2s/1099s reflect required items.
• Educate your payroll, HR, and finance teams about the upcoming tax-form requirements and timeline.
• Audit your workforce in tipped and piece-rate classifications: Are you correctly tracking hours, tip income, overtime? Misclassification risk remains high.

Overtime Exemption Salary Thresholds

The DOL’s (and employer-compliance) focus continues to be on the salary thresholds for exempt (white-collar) employees. While earlier proposed increases were struck down, many employers are preparing as through increases are imminent. WFJ’s resources show that:

• A threshold of $844/week ($43,888 annually) for the white-collar exemptions was noted for July 1, 2025, with a further jump to $1,128/week ($58,656 annually) on January 1, 2026
• Even if federal increases are delayed or blocked, many states maintain higher salary thresholds or independent duties/threshold test.

Action items for employers:

• Conduct a full classification audit: for every exempt employee, confirm duties test + current salary meets (or would soon meet) the most employee-friendly standard (state/local vs federal).
• Develop budget scenarios: If the salary threshold rises, what’s the cost to raise salaries vs reclassify employees as non-exempt (and pay overtime)?
• Ensure payroll systems and timekeeping are configured to track hours of any re-classified employees (non-exempt) to avoid overtime mispayment.

Artificial Intelligence (AI) in HR/Recruiting

As employers increasingly deploy automated systems in recruiting, screening, evaluations and HR decision-making, regulatory scrutiny is increasing. Some states have passed laws limiting discriminatory or opaque use of AI in hiring and personnel decisions.

Action items for employers:

• Inventory your use of automated tools (screening, voice/face-analysis, algorithmic decision-making).
• Review vendor contracts and documentation for bias safeguards, auditability, and candidate-opt-out/notice rights.
• Train HR/recruiting staff on the risk of discriminatory impact via automated tools-even if the employer did not build the tool.

State-Law Explosion: 38+ States with New Requirements

More than 38 states enacted or amended employment laws in 2025, covering topics such as sick/leave laws, non-compete bans, minimum wage increases, earned wage access, background check reforms, remote worker coverage and more.

Key areas to watch:

• Paid leave/sick & safe time: States like Minnesota, Colorado, Delaware have significant new programs or expansions. (Example: Minnesota’s Paid Family & Medical Leave program starts January 1, 2026).
• Non-compete agreement restrictions: More states are narrowing enforceability of non-competes, especially for healthcare practitioners. One noted example: Colorado’s 2025 amendment eliminating damages for violation of non-competes for certain health providers.
• Remote work/ multi-state compliance: Employers with remote workers must ensure compliance with the laws of the state where the employee physically works-not just where the employer is located.
• Wage transparency and minimum wage/ thresholds: Many jurisdictions now require posting salary ranges, or higher minimum wages.
• Rest & meal break laws / ESST (Earned Sick & Safe Time): Some states such as Minnesota have updated rules for rest/meal breaks, accrual/advance of sick time, etc.

Action items for employers with multi-state operations or remote workforce:

• Map your workforce by work-location (physical state) and ensure you track which state laws apply to each remote employee (or hybrid worker).
• For each jurisdiction: update your employee handbook/ to reflect 2025 law changes (paid-leave, rest breaks, wage transparency, non-compete enforceability, background checks).
• Update workflows: onboarding, notice delivery, wage-range postings, leave-request handling, break/meal tracking
• Evaluate whether your payroll/benefits teams are prepared for states with unique employer reporting, premium contributions, or private-plan alternatives (e.g., Minnesota’s Paid Leave).

Zeroing in on 2026: What HR Leaders Should Be Doing Now

To get ahead of the curve, here’s a checklist of priority items for employers to tackle now so you’re ready for 2026 and beyond:

Classification & salary-threshold audit

• Identify all exempt employees: job descriptions, salary levels, duties.
• Model cost scenarios: raise salary vs convert to non-exempt and pay overtime.
• Plan for system changes (timekeeping, payroll) for any re-classified employees.

Payroll/Benefits systems readiness

• Ensure your payroll system can capture/report: qualified tips, qualified overtime, new required fields on W-2s/1099s (if applicable under the OBBB).
• Prepare for leave-premium contributions or private-plan alternatives in states such as Minnesota.
• Check state-by-state premium caps and employer contribution limits.

Policy & handbook updates

• Update handbooks to reflect: new paid leave eligibility/rights, rest/meal break changes, wage-range postings, AI usage disclosures, non-compete/internship or child labor changes.
• Run internal communication campaigns to ensure employees and managers understand updated leave rights, classification status, meal/rest break rights, etc.

Remote workforce compliance mapping

• For each remote/hybrid worker, document the state of work and apply that state’s laws (not just employer’s home state).
• Revise onboarding policies to include state-specific disclosures, wage posting notices, leave program notifications, background check and “ban the box” rules, if applicable.

Automated systems & vendor review

• Review all HR/recruiting tech (AI, algorithmic decision-making, screening tools) for bias and regulatory risk.
• Ensure vendor contracts include audit rights, bias-mitigation documentation, candidate opt-out/notification procedures.

Training & Communication

• Provides supervisor/manager training on the new laws (meal/rest breaks, remote worker classification, leave rights, wage transparency).
• Communicate changes to employees (e.g., salary threshold changes, classification changes, new leave eligibility) to reduce confusion and potential litigation risk.
• Launch a “compliance awareness” campaign in your organization so HR/legal is seen as proactive instead of reactive.

Risk Assessment & Litigation Exposure Check-Up

• Ask: What are your biggest exposure areas? (Misclassification, remote-worker state law misapplication, non-compete enforcement risk, pay transparency violations, meal/rest break compliance, background-check issues.)
• Engage your employment counsel to perform a “compliance health check” now (rather than reacting after a claim.)

Insight from the Labor & Employment Environment

Beyond the laws themselves, it’s helpful to consider the broader context in which these changes are happening:

• Tight labor market & talent competition: With low unemployment and increasing demand for remote/hybrid flexibility, employers must balance compliance burdens with the need to attract and retain talent. Providing robust benefits (paid leave, flexibility) may help.
• Remote/work from anywhere workforce expansion: Many employers now have employees physically located in multiple states, each with their own employment-law landscape. This makes centralized “one-size-fits-all” policies difficult-customization is increasingly the norm.
• Greater scrutiny of classification and pay practices: Wage-hour claims, misclassification and meal/rest break litigation remain high-risk. Employers that proactively audit and adjust classifications are in a better position.
• Focus on workplace fairness, equity and technology: With expanded protections (pregnancy, caregiver status, AI bias) and increased litigation activity around discriminatory use of technology, employer practices around data, monitoring, screening and decision-making tools are under more scrutiny.
• Cost pressures and inflation: As wage demands rise (minimum-wage increases, living wage efforts) and benefits costs escalate, employers are under pressure to manage budgets-without compromising compliance. Proper modeling and budgeting for 2026 is critical.

Final Takeaways for 2025/2026

• Don’t wait for a claim to drive change. Proactive review and adjustment of classification, remote-worker state law mapping, leave/benefits program readiness, and payroll system configuration are essential.
• Focus on where your employees are physically working (not just where your HQ is) when determining applicable state laws.
• Update your HR policies, handbooks, training and communication now to reflect 2025 changes and calendar into 2026 the next wave of law changes (especially salary-threshold and leave premium updates.)
• Partner with employment law counsel-especially if you operate in multiple states, have remote employees, utilize AI/automated tools in HR, or rely on non-compete agreements.
• Recognize that the compliance burden is rising-but so is the opportunity: Employers who master compliance and craft fair, flexible, transparent workplace practices will be better positioned for talent retention and reduced litigation risk.

Need help? Our employment and labor team at WFJ is here to help take proactive steps to manage your company’s compliance strategy. Reaching out before you need help can lower litigation risk and save you money in the long run.