Are your HR Policies ready for 2026?
What’s Changing and What to Watch
As 2026 approaches, many U.S. states are rolling out major changes to employment laws, particularly regarding AI, leave policies, workplace safety, and pay practices. As a small or growing business, this is the time to get ahead and update systems and processes now, which can save you headaches later.
AI in Employment
Several states (e.g., Illinois, Colorado, California, Texas) will regulate (or have already) the use of artificial intelligence in hiring, promotion, discipline, termination, and other employment decisions (HR Dive).
For example, under the Illinois AI Employment Discrimination Law (effective Jan. 1, 2026), employers that use AI in the hiring process must notify applicants in advance, and the AI cannot use geographic identifiers, such as ZIP codes. (that Ethena).
The Colorado AI Act (CAIA) defines “high-risk” AI systems as those used in employment decisions, from hiring to termination. Some exemptions exist; however, employers will be required to implement risk management policies, conduct impact assessments, provide transparency, offer opt-outs, and clarify procedures for appealing adverse actions. These requirements are similar to New York’s Automated Employment Decision Tools Law, effective in 2023, which also requires transparency, bias audits, and opt-outs with accommodations (Mukherjee, 2026, The HR Digest).
As these technologies rapidly evolve, these laws will also change, requiring employers to urgently rethink AI-assisted hiring, performance evaluation, and HR automation tools to ensure compliance with new requirements.
Leave & Time-Off / Leave of Absence (LOA)
Many states are expanding leave protections beyond maternity leave. This now includes sick leave, mental-health days, leave to care for a sick family member, leave as a witness, or leave related to domestic violence, legal reporting, or treatment.
For 2026, we are seeing states expand qualification requirements, meaning that more employees will qualify, and coverage periods will increase under certain circumstances. In addition to longer-term leave protections, several states have enacted or expanded paid sick leave laws. Some states, like Connecticut, have been expanding these laws to include more employers. In 2026, Connecticut’s Expanded Paid Sick Leave will apply to employers with 11 or more employees, compared to 25 employees in 2025 (Compliance Guide, Christensen Group).
All businesses should review their sick time and PTO policies to ensure compliance; small businesses should also review these new laws, even if they were previously exempt.
Workplace Safety & Violence Protections
As work practices change, so do workplace safety standards. States are increasingly focused on protections against workplace violence, including harassment, assault, and hostile work environments (both physical and mental). In 2026, Oregon and Washington will have new requirements that address workplace violence. For example, employers will review their workplace violence prevention plans annually, provide mandatory employee training on workplace safety to prevent violence, and, in some cases, install safety devices such as panic buttons for isolated workers. (Esola, 2025, Business Insurance).
Wage & Hour Laws
Several states have planned minimum wage increases and expanded break-time regulations. While not new in 2026, some rates vary by jurisdiction or job type (e.g., training pay, tipped employees). Small businesses must understand these differences and whether rate changes apply. For example, minimum wages in certain cities in Colorado and New York differ from state rates, and Oregon's minimum wage varies by region.
Break time laws are changing rapidly. Minnesota is implementing specific break time requirements based on hours worked, and employers will be fined if employees fail to take mandated breaks. Illinois will require paid lactation breaks for nursing mothers starting in 2026.
Pay transparency and equity laws are also becoming more widespread (Parker, 2025, SixFifty). Employers in California with 15 or more employees will be required to list pay ranges on job postings. This is a change from the previous requirement of providing pay information only upon request (Gunderson Dettmer, 2025).
What This Means for Small Businesses
A few simple steps can go a long way toward compliance. Consider the following end-of-year prep:
Review and refresh your policies.
Standardize hiring and documentation.
Confirm employee classifications.
Train managers how to consistently handle employee issues.
Establish an annual cadence to check for updates each January.
Why This Matters, And Why Now
Employment laws are shifting rapidly, especially where technology meets HR. Formerly optional practices, such as using AI screening tools or handling leave individually, now face growing regulation and scrutiny beyond just large companies.
For small businesses, failing to comply can lead to legal liability, fines, negative publicity, or loss of trust. But with some attention and structure now, you can protect your people, your operations, and your margins — and create a workplace that’s fair, transparent, and stable.
HR can set the foundation, and legal can advise on the finer points; both are important.
If you're unsure where to begin, Moore Consulting LLC can help you get organized, identify gaps, and put practical systems in place so you can confidently move into 2026.
Let’s get your HR ready for the year ahead.
**NOTE: As an HR practitioner, I can set the foundation for and advise on employment policies. I always recommended that companies obtain a legal review of all employment policies and practices.