Employment Law Trends Every Business Leader Should Watch in 2026

Employment law is always evolving as new situations create challenges that decision-makers must meet to help both companies and the workforce thrive. While you may already be prepared for the usual legal changes, 2026 is shaping up to be one of the biggest years for new laws. Between new AI technology and increasing employee activism, it’s critical to start preparing as soon as possible to include these employment law trends in your business plan this year.

Pay Attention to Minimum Wage Changes

Minimum wage increases are fairly common at the beginning of each year. But, this year has 19 states and nearly 50 localities have increased the minimum wage for workers in the area. Later in the year, four more states and over 20 cities will increase their baseline wages, which could catch some companies by surprise. If you own a small business or one with unique payroll circumstances, then you’ll want to be especially cautious about following through with making adjustments to meet the increases as they occur.

Expect to Face More Exceptions for Pay Transparency

Recently, many states have fostered greater pay transparency by making laws that require companies to include good-faith salary ranges in their job postings. In the next year, you can expect more states to follow as employees demand clearer expectations for pay equality. Some states also have a ban on salary history inquiries for hiring practices, and you can expect to see even more tightening in this area. For instance, your company may also need to list salary ranges on internal documents to allow all employees the same access to salary information.

Watch for Non-Compete Thresholds to Rise

Non-compete agreements are going to continue to be a major topic in the field of employment law. While some states made these types of agreements illegal in past years, others will be allowing them in specific instances that change in 2026. Some states that have allowed non-compete agreements for people who fall within the highly compensated category are increasing the thresholds. Checking into the thresholds for your state can help you ensure that you don’t require an agreement from someone who isn’t legally allowed to receive one.

Assess Anti-Discrimination Policies

If you’ve been a business leader within the past decade, then you may already know how this field of employment law is constantly changing. Many states have laws protecting specific groups from discrimination. In Washington State, laws prevent workplace discrimination based on race, religion, sexual orientation, gender, age, pregnancy, marital status and veteran status. Recent Supreme Court decisions include the ruling that majority group members face the same proof standard as others from minority groups, which could impact how human resource departments investigate discrimination claims. Meanwhile, you may also see some states bucking down policies for protected classes, such as requiring employers to use requested pronouns. You might also need to ensure your company provides employees with information regarding their rights if your business operates in certain states.

Brush Up on Data Privacy Laws

Biometrics is becoming a major hot topic in the employment law industry. In the past, employers had to worry about Social Security numbers and other private information. Now, however, your company might need to pay attention to laws that require employers to protect biometric data. Fingerprints, face scanning and other unique identifiers are beginning to be included in data protection plans that may be governed by legal requirements for your company.

With the legal field becoming tighter regarding employment law, business leaders must stay on top of even the smallest changes that could lead to major fines and lawsuits. As a general rule, your company should plan for a legal review of all of the policies every year. Since most new laws kick in at the start of the year, there is no time like the present to begin making sure that your company complies with every change.