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.

Traffic issues have a way of popping up at the worst possible time-on your way to work, during a busy season, or when life is already moving fast. The good news? LegalShield members have meaningful legal support available when motor vehicle issues arise. Here’s a clear breakdown of what’s covered and how Wagner, Falconer & Judd can help.

Moving Traffic Violations: You’re Not On Your Own

If you’re facing a moving traffic violation, LegalShield coverage goes beyond basic advice. WFJ can assist with:

• Legal advice and consultation
• Negotiation related to the violation
• Review of relevant documents
• Representation in court for covered moving traffic violations

Having an experienced attorney involved early can make a significant difference in understanding your options and protecting your record.

Suspended or Revoked Driver’s License: Help When You Need It Most

A suspended or revoked driver’s licence can quickly impact your job, health care access, and daily responsibilities. When a license is suspended or revoked by the issuing authority-and the law provides a right to appeal-WFJ will advise and represent you.

WFJ can also assist with legal efforts to reinstate or maintain your driver’s license when the suspension affects:

• Job-related driving requirements
• Medical or essential personal needs

These situations are often time-sensitive, and having guidance is key.

Motor Vehicle Property Damage: Guidance Without Litigation

If your vehicle is damaged after being struck by another motor vehicle, LegalShield provides assistance to help you pursue recovery for property damage-up to, but not including- filing a lawsuit. WFJ can help you understand your rights, review documents, and navigate next steps to seek compensation.

One Important Step: Start With the Full Picture

To get the most out of your LegalShield benefits, it’s essential to fully discuss your situation with WFJ during your initial coverage call. Sharing all relevant details helps ensure your benefits are clearly understood and properly applied-so there are no surprises or missed opportunities for support.

When traffic issues arise, clarity matters. LegalShield members don’t just get coverage-they get access to trusted legal guidance when it matters most.

Copyright can be tricky. For musicians and anyone working in the music industry, understanding how it works is crucial-especially because each song you hear actually involves two separate copyrights and often two separate licenses. Knowing this can save you headaches, protect your work, and make sure your contracts reflect your rights.

Two Copyrights in Every Song

Every song has a musical work copyright and a sound recording copyright.

• The musical work copyright covers the written composition-the music and lyrics. This is typically owned by the songwriter or sometimes administered by a music publisher under a publishing agreement. Licensing this copyright often involves mechanical licenses, performance licenses, or synchronization licenses when your song appears in film or tv.
• The sound recording copyright covers the actual recorded performance. This is often owned by the record label, and licensing it-like with a master use license-is separate from licensing the musical work.

Understanding the difference is key because both copyrights must often be cleared for uses like film, tv, or streaming. Clearing only one is not enough.

Why Two Licenses Matter

If you hear a song in a movie or on a tv show, chances are both a synchronization license and a master use license were obtained. Musicians and industry professionals need to be aware of who owns each copyright and in what percentage. When licensing your own music, or using someone else’s-failure to clear both rights can lead to legal trouble and unexpected costs.

Protecting Yourself and Your Work

Here are some practical steps musicians can take:

• Know your rights: Identify who owns the musical work and the sound recording of your songs.
• Check your contracts: Have any agreements reviewed by an attorney before signing. Understand exactly which rights you are granting.
• Plan for licensing: If your music is going to be used in media, know which licenses are required and ensure both copyrights are cleared.

Copyright law is complex, but you don’t have to navigate it alone. At Wagner, Falconer & Judd, we help musicians, songwriters, and creative professionals understand their rights, protect their work, and confidently sign contracts. Focusing on art is your job-we’ll handle the legal side.

Meet our Expert:

Paige Kochanski, attorney at Wagner, Falconer & Judd specializes in music, film, and creative content legal matters. Paige works regularly with clients on contracts, copyright, publishing, and licensing, helping musicians and creators navigate the industry with clarity and confidence

At Wagner, Falconer and Judd, we spend a lot of time helping construction professionals navigate change. Two new California laws taking effect January 1, 2026 will significantly impact how private construction projects handle claims, payments, disputes, and retention.

If you own, manage, or work on private construction projects in California, now is the time to prepare.

Let’s break it down.

The Big Picture

What’s Changing?

Beginning January 1, 2026, most private construction contracts in California will be governed by two new laws:

Civil Code 8850- Creates mandatory claim, dispute resolution, and payment timelines

Civil Code 8811- Caps retention at 5% on most private projects

Why it matters:

These laws cannot be waived, override conflicting contract terms, and carry real financial consequences for noncompliance-especially for owners.

Section 8850: New Rules for Claims, Disputes, and Payment

Who does it apply to?

Most private construction projects in California executed on or after January 1, 2026, with limited exceptions (certain residential and small mixed-use projects).

What is a “claim” under the law?

A claim includes demands for:

• Extra time (including delay relief)
• Payment for work performed
• Payment of amounts the owner disputes

Once a claim is submitted, the clock starts ticking.

The New Claim Timeline (Simplified)

1. Contractor submits a claim with reasonable supporting documentation
2. Owner has 30 days to review and respond in writing
   1. Must identify what is disputed and undisputed
3. Undisputed amounts must be paid within 60 days of the owner’s response

If the owner disputes the claim or doesn’t respond on time, the law forces the net steps.

Required Dispute Resolution Steps

If a claim isn’t resolved:

• Informal conference
  • Contractor can demand it
  • Owner must schedule it within 30 days
• Mediation (non-binding)
  • Required if disputes remain
  • Costs split evenly
  • If parties can’t agree on a mediator, the contractor chooses

Only after mediation can the dispute move to arbitration or court (as the contract allows).

The “Hammer”: What Happens if Owners Don’t Comply

Section 8850 has teeth.

Contractors Can Suspend Work

If payment is due and not made-or if the owner fails to follow the dispute process-a contractor may suspend work without penalty, after giving proper notice.

This is broader than existing prompt-payment laws and may apply even when amounts are disputed.

Interest Adds Up Fast

• Unpaid undisputed accounts accrue 2% annual interest per month (24% annually)
• Interest may apply retroactively if a disputed claim is later found valid

On large claims, this exposure can be massive.

You Can’t Contract Around It

• Any contract terms that conflict with Section 8850 are void
• Parties may agree after a claim arises to skip mediation-but no in advance

What This Means in Practice

• Owners will face strong pressure to respond quickly and pay sooner
• Contractors gain leverage-but must follow notice requirements carefully
• Subcontractor claims must be passed through in good faith

How courts interpret some of the provisions (especially interest and stop-work rights) remains an open question-but the risk is real.

Section 8811: A 5% Retention Cap on Private Projects

The Rule

For most private construction contracts entered into after January 1, 2026:

• Retention at any tier cannot exceed 5%
• Total retention over the life of the contract cannot exceed 5%

This applies to:

• Owners–>Contractors
• Contractors–> Subcontractors
• Subcontractors–> lower-tier subs

Limited Exceptions

• Certain residential projects (non-mixed use, under four stories)
• Subcontractors who fail to provide a required bond after notice

Unlike public projects, there is no exception for complex projects. 

Enforcement

If someone violates Section 8811:

• The prevailing party is entitled to reasonable attorney’s fees

That alone should get everyone’s attention.

How this Compares to Public Projects

Both laws borrow concepts from California’s public works statutes-but private projects now face:

• Higher interest penalties
• Fewer exceptions
• Greater exposure for owners
• Mandatory processes that can’t be waived in advance

In short: private projects are being regulated more like public ones-but with sharper consequences.

Action Steps:What You Should Do Now

For Owners

• Review and revise contract templates for 2026
• Train project managers on strict response and payment timelines
• Budget for faster payments and potential interest exposure
• Tighten internal claim review processes

For Contractors

• Update claim procedures and documentation standards
• Track deadlines carefully-missed steps can cost leverage
• Understand your stop-work rights (and notice requirements)
• Prepare to pass through subcontractor claims properly

For Subcontractors

• Know your rights under the new payment timelines
• Watch retention percentages closely
• Communicate claims early and in writing
• Coordinate with upstream contractors to ensure compliance

Final Takeaway

California’s new private construction laws are intended to promote timely payment and reduce disputes-but they also raise the stakes for everyone involved.

Contracts that don’t comply won’t be enforceable.

Teams that aren’t trained will be exposed.

Owners, in particular, face the greatests financial risk.

At Wagner, Falconer & Judd, we help construction professionals simplify complex rules, update contracts, and stay protected before problems arise. If your projects-or contracts-will extend into 2026, now is the time to prepare. 

Minnesota’s Paid Family & Medical Leave (PFML) program is no longer theoretical. With required employee notices already behind us, employers should be shifting their focus from planning to execution, consistency, and documentation.

If your organization completed the initial notice requirements before December 1, 2025, the following steps will help ensure you remain compliant throughout 2026.

Confirm Payroll is Working Exactly as Intended

At this stage, payroll deductions and employer contributions should already be determined. Now is the time to verify accuracy.

Double-check that:

• Employee PFML deductions are being withheld correctly each pay period
• Employer contributions match the required rate
• Contributions stop at the applicable wage cap
• Your payroll system clearly separates PFML from other deductions

Ensure Quarterly Reporting is Accurate and On Time

PFML requires ongoing reporting, not just payroll deductions.

Make sure your team has:

• Established responsibility for submitting quarterly wage detail reports
• Confirmed reporting aligns with existing unemployment insurance filings
• Calendarized quarterly payment deadlines
• A process for correcting errors quickly if discrepancies are identified

Late or inaccurate reporting can result in penalties-even if deductions were taken correctly.

Align Leave Administration with PFML Rules

Now that employees can actively use PFML benefits, internal processes must align with state administration.

Confirm your team understands:

• Employees apply for PFML benefits through the state, not the employer
• PFML runs separately from employer-paid benefits, but may run concurrently with:
  • FMLA
  • Employer PTO
  • Short-term disability (if applicable)
• Job protection requirements, including reinstatement obligations
• Health insurance continuation during PFML leave

Clear internal workflows prevent delays, inconsistent approvals, and employee frustration.

Update and Enforce Written Leave Policies

If it hasn’t been finalized already, it is critical now.

Your handbook and internal policies should:

• Reference Minnesota PFML specifically
• Clarify whether PTO must, may, or may not be used concurrently
• Outline employee responsibilities for notice and documentation

Policies should reflect what your team is actually doing in practice-not aspirational language written months ago.

Maintain Proof of Required Notices

Although the December 1, 2025 notice deadline has passed, employers should still maintain documentation.

You should retain:

• Copies of employee notices
• Acknowledgments of receipt
• Records showing notices were provided to new hires within required timelines
• Proof that workplace posters remain displayed and accessible

If questioned later, documentation-not intent-will matter.

Reevaluate Private Plan Status (If Applicable)

If your organization opted for a private plan:

• Confirm the plan remains approved and active
• Ensure benefits still meet or exceed state requirements
• Monitor renewal dates and state reporting obligations
• Communicate clearly with employees about how benefits are accessed

If you are in the state plan, ensure leadership understands there is no “opt-out” after the fact without proper approval.

Prepare for Employee Questions and Edge Cases

As PFML becomes more widely used, questions will increase.

Be prepared to address:

• Partial leave or intermittent leave scenarios
• Coordination with remote or multi-state employees
• Return-to-work timing and reinstatement issues
• Overlapping medical and family leave situations

Having clear internal guidance now will prevent reactive decision-making later.

Final Compliance Check: What Should Be True Right Now

At this point, compliant employers should be able to say:

• Payroll deductions and contributions are accurate
• Reporting deadlines are assigned and tracked
• Leave policies reflect PFML realities
• Manager know when to escalate issues
• Documentation is organized and retained
• Employees know where to apply and what to expect

Bottom Line

Minnesota’s Paid Family & Medical Leave program is now an operational requirement-not a future project. Employers who focus on accuracy, consistency, and documentation will be best positioned to avoid compliance issues while supporting employees through qualifying leave.

If you need help reviewing policies, auditing payroll setup, or navigating complex leave coordination issues, working with experienced legal and compliance professionals can help ensure nothing is overlooked as PFML continues to roll out.

Current through June 1, 2025

Whether you’re a subcontractor, supplier, or equipment rental provider working on commercial or public projects in Wisconsin, understanding your lien and bond rights is essential for protecting your bottom line. While Wisconsin has not introduced substantive statutory changes in the past year, the state’s lien and bond laws include some of the strictest—and most technical—notice rules in the region. Missing even one deadline can eliminate your right to recover payment.

This guide breaks down the current Wisconsin lien, bond, and “lien against funds” laws in a straightforward way so you can stay compliant and get paid.

Private (Commercial) Projects: Mechanic’s Liens in Wisconsin

Who Has Lien Rights?

You may assert a mechanic’s lien if you contract with:

• The owner

• The prime contractor

• A subcontractor

Wisconsin statutes also strongly suggest that claimants contracting with sub-subcontractors may preserve lien rights.

No Preliminary Notice Required

Thanks to the 2006 statutory updates, Wisconsin eliminated the 10-day and 60-day preliminary notice requirements for commercial projects.

That means:

• No early notice to owners or prime contractors is required.

• Your lien rights remain intact without any preliminary notice—with one exception involving private payment bonds (more on that below).

Mechanic’s Lien Filing Deadlines

Wisconsin has a two-step process:

 Serve Notice of Intent to File a Lien

• Must be sent to the owner by certified mail

• Must be served at least 30 days before filing your lien

• Must be served no later than 5 months after your last furnishing date

 File the Mechanic’s Lien

• Must be filed within 6 months after your last furnishing date

• After filing, you must serve a copy of the lien on the owner via certified mail within 30 days

Because the Notice of Intent requires specific title information and strict timelines, claimants should start this process shortly after month four.

Foreclosing Your Lien

Once your mechanic’s lien is filed:

• You have two years from the filing date to commence a foreclosure lawsuit.

This is longer than many states, but delays can complicate recovery efforts—starting earlier is always safer.

Wisconsin’s “Double Jeopardy” Lien Rule

Wisconsin is extremely claimant-friendly here:

Your lien remains valid even if the owner already paid the prime contractor in full before you filed.

This protects subcontractors and suppliers from upstream payment issues.

Private Payment Bonds: Special Rules Every Claimant Should Know

Payment bonds on private projects are not mandatory—but when a bond is issued, Wisconsin law becomes more complex.

Why? Because the bond terms control.

Even though Wisconsin statutes don’t require notice, the bond itself may require a 90-day notice. Courts have enforced this—even when the claimant never received or saw the bond.

Key Action: Determine early if a bond exists

You have the right to request a copy of the bond from:

• The owner, and

• The prime contractor

Use certified mail and request the bond within 90 days of your first furnishing date.

If a Valid Payment Bond Is Furnished

The bond may:

• Eliminate mechanic’s lien rights, and

• Replace them with rights against the bond instead

But only if:

• The bond includes the statutory language

• It is approved by the owner

• It is approved by the mortgage lender

If any of these elements are missing, you still retain your mechanic’s lien rights.

Preliminary Notice Requirement for Private Bonds

If a proper private payment bond exists, you must:

• Serve a 60-day preliminary notice

• On the prime contractor via certified mail

• Within 60 days after your first furnishing date

If the notice is late, the law says it is invalid—but you should still send it, as it may protect you if other statutory exemptions apply.

Lawsuit Deadline for Private Bond Claims

A lawsuit must be started within one year after the project’s completion.
Because completion dates are often unclear, best practice is:

Use a conservative deadline of one year from your last furnishing date.

“Lien Against Funds” Claims on Private Projects

If a valid private payment bond exists, Wisconsin allows claimants to assert a “lien against funds” claim, which attaches to any money the owner still owes the prime contractor.

Key rules:

• Available only if you contracted with the prime contractor or a first-tier subcontractor

• Not available for claimants working under a sub-subcontractor

• No formal deadline—but the claim is only effective if the owner still holds funds

• Early service increases the likelihood of success

If the prime contractor or subcontractor disputes your claim within 30 days, you must start a lawsuit within three months.

Public Projects: Payment Bonds and Claims in Wisconsin

Wisconsin requires payment bonds on public projects when:

• The contract exceeds $148,000

This applies to most public construction—but with unique exceptions for highway improvement projects.

Who Has Bond Rights?

For non-highway public projects:

• Claimants contracting with the prime contractor or subcontractor have bond rights

• Sub-subcontractors likely do not

For highway improvement projects:

• Only claimants contracting directly with the prime contractor have rights

• No bond rights exist for claimants contracting with subcontractors

• Some county-executed highway projects may not require bonds at all

If you’re unsure whether your project qualifies as a highway improvement, have the bond documents reviewed early.

60-Day Preliminary Notice Required

To preserve bond rights, you must:

• Serve a 60-day preliminary notice

• On the prime contractor by certified mail

• Within 60 days after your first furnishing date

This applies whether you contract with the prime contractor or a subcontractor.

If you miss the deadline, still serve the notice—there are narrow exceptions.

Final Bond Claim Notice

Wisconsin does not require a final notice, but sending one is often beneficial to involve the surety early.

Lawsuit Deadline

You must file suit:

• Within one year after project completion

As with private bond claims, because completion dates are often unclear:

Use a conservative deadline of one year from your last furnishing date.

“Lien Against Funds” Claims on Public Projects

Wisconsin allows claimants contracting directly with the prime contractor to assert a lien on unpaid public funds still held by the public owner.

Key points:

• Sub-subcontractors cannot use this remedy

• No strict deadline, but it only works if funds remain unpaid

• A lawsuit to enforce the lien must be filed within three months after serving the claim

Additional Wisconsin Construction Law Notes

Trust Fund Claims

Wisconsin’s trust fund statute provides powerful protection:

• Funds paid or due to the prime contractor or subcontractor become trust funds

• Misuse of funds can create civil or criminal liability

• Particularly useful in bankruptcy or insolvency situations

Equipment Rental

Wisconsin permits lien claims for equipment rental.

Attorney Fees

Wisconsin does not allow attorney’s fees in mechanic’s lien foreclosure actions.

Pay-If-Paid Clauses

These clauses are not enforceable in Wisconsin.
However, “pay-when-paid” timing provisions are allowed.

Wisconsin’s lien and bond laws offer strong protections—but only if you understand and comply with their technical requirements. From 60-day notices to multi-step lien filings, the timing and accuracy of each step has a direct impact on your ability to recover payment. The construction law team at Wagner, Falconer & Judd is here to help you navigate these rules with confidence. If you have questions about a specific project, notice requirements, payment bond concerns, or enforcing a private or public claim, reach out to WFJ. We’re here to protect your rights and ensure you get paid for the work you perform.

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.