Welcome to the latest edition of AlphaStaffHCM’s Compliance Updates!

We are pleased to provide you with this Summer 1 edition of the AlphaAdvisor Compliance Updates featuring key federal and state legal developments. In this issue:

 

EEOC votes to eliminate EEO-1 reporting, Connecticut passes laws on AI use in hiring and employment, pay transparency continues in Maine, Virginia, and Connecticut, and Florida passes an “Operations Charge” transparency law that may impact wage and hour compliance, and more.  We also include resources from AlphaStaffHCM’s trusted legal partners to support your compliance efforts.

 

Note: The information contained in this Compliance Update is for general informational purposes only and is not legal advice.

Watch the video from Lindsay highlighting key topics in the Summer Part One update

Federal Law Updates 

 

EEOC Votes to Eliminate EEO-1 Reporting

The EEOC has issued a proposed rule that would eliminate the EEO-1 reporting requirement and rescind EEO-2, EEO-3, EEO-4, EEO-5, and EEO-6 reporting and recordkeeping requirements. The proposed rule is published and will undergo hearing and comment through late August. If the rule becomes law, the rollback will affect more than 100,000 employers nationwide and end the federal requirement for covered private employers and certain federal contractors to submit annual workforce demographic data by job category, sex, and race/ethnicity. Employers should avoid assuming reporting obligations have ended before a final rule is issued, and remember that the EEOC may still request specific, tailored records relevant to a charge investigation. AlphaStaffHCM will continue to monitor, and employers can read more here.

 

Green Card Holders Already in the U.S. Face Increased Rules

Recent U.S. Citizenship and Immigration Services (USCIS) guidance may make the employment-based Green Card process less predictable for workers already in the U.S. by requiring applicants to complete the process at a U.S. consulate abroad instead of from within the United States. Previously, nonimmigrants, such as Visa holders, could pursue an adjustment of status while remaining in the U.S. as a path to Green Card application. The USCIS has advised this practice is ending. This creates practical concerns for employers sponsoring foreign national employees, including possible travel disruptions, increased costs, longer timelines, and added uncertainty for workforce planning. The guidance is especially significant for H-1B and L-1 workers because those categories have historically allowed dual intent (maintaining temporary work status while pursuing a green card). Employers should review pending and planned Green Card cases with immigration counsel, identify affected employees, and plan for potential business continuity issues if employees must travel internationally to complete the process. Read more, here.

 

State Updates

 

California Signals Future Worker Protections Due to AI Layoffs

In late May, Governor Newsom signed an Executive Order setting the landscape for state control over employee impact due to AI. California’s new executive order does not require immediate action for employers, but it directs state agencies to study how AI may disrupt jobs and consider drafting worker-protected policies. Employers should watch the state’s review of potential changes involving WARN Act obligations, severance standards, workforce training, collective bargaining, and transition support for displaced workers due to AI layoffs. Employers using AI should begin assessing workforce impacts and tread carefully, documenting business reasons for AI-related decisions with clear policies on AI use in employment decisions and monitor future legislative or regulatory proposals before making any layoff decisions due to AI. Read more here.

 

California Minimum Wage Increase as of July 1, 2026

As of July 1, 2026, California increased local minimum wage in several cities and counties, including Alameda, Berkeley, Emeryville, Fremont, Los Angeles, Los Angeles County, Malibu, Milpitas, Oakland, Pasadena, San Francisco, and Santa Monica. As a reminder, California’s statewide minimum wage rose to $16.90 on January 1, 2026, increasing the exempt salary threshold to $70,304 based on a 40-hour workweek. Wage notices, posters, and offer letters should be updated. Read more here.

AlphaStaffHCM Action Item: For our clients, AlphaStaffHCM has automatically adjusted minimum wage accordingly.

 

Chicago Updates to Paid Leave Rules as of June 1, 2026

On June 1, 2026, Chicago issued revised rules for the Paid Leave and Paid Sick and Safe Leave Ordinance. As of June 1, 2026, permissible use of paid sick leave applies when informal childcare arrangements (or care for any other family member) become unexpectedly unavailable. With the clarification that employees can use paid sick leave due to a family member or any informal form of “care” no longer being available, employers may see increased unscheduled absences, particularly among employees who rely on informal care networks. Accordingly, the new rules have clarified the following patterns as misuse that can result in discipline: unscheduled paid sick leave on or adjacent to weekends, regularly scheduled days off, holidays, vacation or pay day; taking scheduled paid sick leave on days when other leave has been denied; and taking paid sick leave on days when the employee is scheduled to work a shift or perform duties perceived as undesirable. For many employers, this change is less about policy revision and more about operational awareness and day‑to‑day administration, read more here.

 

Chicago Changes Fair Workweek Rules as of June 1, 2026

Chicago has updated its Fair Workweek Rules effective as of June 1, 2026. In the new rules the previous “calendar week” definition was replaced by the Fair Labor Standards Act (FLSA) definition of a work week as seven consecutive 24-hour periods. The new rules also clarified employer-size calculations, added documentation requirements for schedules, and good-faith estimates of work hours. Recordkeeping has also significantly increased to include documenting consents for schedule changes, and written consent of employees that work a shift that begins less than 10 hours after the end of the previous day’s shift. As of June 1, 2026, employers must time-stamp work schedule postings, include additional details about on-call expectations, and track whether covered employees receive tips or perform both tipped and non-tipped duties. The rules also address providing a written schedule for new hires, employees returning from leave, and employees transferred or promoted into new roles. Covered employers should revise scheduling workflows, recordkeeping processes, and manager training to ensure the new rule obligations are met. Read more on how employers should comply, here.

 

Connecticut Laws Effective in October 2026 and 2027:

• Pay and pay code transparency: Effective October 1, 2026, all employers must include the wage or wage range and a general description of benefits in internal and external job postings. Employers with at least 100 employees also must create a pay code guide for overtime and commonly used pay differentials (on call pay, hazard pay, etc.) and include contact information for employees to dispute hours or pay differential calculations.
• Employment promissory notes: Effective October 1, 2026, employers with at least 26 employees may not require employees to sign employment promissory notes as a condition of employment or continued employment. The article notes limited exceptions, including agreements for employees to repay employer-paid costs in certain circumstances or to pay a lease, mortgage, loan, or relocation expense that is separate from employment.
• Workplace accommodation notices: Effective October 1, 2026, employers must post notices about reasonable accommodation rights under state and federal law. The poster has not yet been released by the Connecticut Labor Commissioner.
• Lactation breaks: Effective October 1, 2026, Connecticut clarifies workplace lactation break requirements to include pumping. Employers should also consider obligations to provide lactation breaks and accommodations under the federal PUMP for Nursing Mothers Act and Pregnant Workers Fairness Act.
• AI employment decisions: Effective October 1, 2026, using an automated employment-related decision process (employment AI tool) in a way that causes an employer to make an adverse employment decision against a protected individual shall be a violation of the Connecticut Fair Employment Practices Act.

As of October 1, 2027, Employers using AI or automated tools in hiring, promotion, discipline, discharge, training selection, or similar employment decisions will be required to provide notice to employees and applicants who interact with the automated employment-related decision processes, or who are subject to an employment decision by the automated employment-related decision processes. Before the automated employment-related decision process is used to make an employment-related decision, the employee or applicant must be notified:

• That an automated employment-related decision process is being used;
• The purpose for which it is being used;
• How to opt-out of the automated employment-related decision process; and
• How to contact the employer.

Then, if an adverse decision is made against an employee or applicant, the employee or applicant must be provided with:

• A high-level statement of the reasons for the decision; and
• An opportunity to examine and correct any personal data used in the decision-making process that was not provided by the employee or applicant.

Connecticut employers can read more here.

 

Florida July 1, 2026, Operations Charge Law Heightens Wage and Hour Compliance in Hospitality Industry

Effective July 1, 2026, Florida enacted a new “operations charge” law expanding how public food service establishments disclose fees to customers, including service charges, automatic gratuities, credit card surcharges, delivery fees, and other mandatory add-ons. The law applies to any “public food service establishment,” which is broadly defined to include any restaurant, food truck, hotel dining outlet, catering operation, or other place where food is prepared, served, or sold for immediate consumption or takeout. The law requires clear notice of the amount of charges on menus, websites, mobile apps, written contracts, bills, and receipts. Notably, the disclosure must also explain the purpose of the service charge, not just the amount or percentage, so if your establishment retains a portion for operational costs, that needs to be communicated to the customer.

 

Employers should note that this new requirement on “cost breakdown” raises heightened concerns for wage and hour compliance. Blurring the line between a tip and a service charge is not just a compliance risk under this new state law, it can also create wage and hour exposure under the federal FLSA. Therefore, employers should also focus on tip credit compliance, minimum wage obligations, overtime calculations and, importantly, employee expectations. Therefore, employers should review POS settings, online ordering flows, menu language, and internal practices/training managers. Read more here.

 

Maine Sets New Pay Transparency Requirements and Revises Workplace Drug Testing Law

Maine employers should prepare for new pay transparency and drug testing requirements taking effect July 29, 2026. The pay transparency law requires employers with 10 or more employees to include pay ranges in job postings, requires all employers to provide pay ranges to current employees upon request, and adds compensation recordkeeping obligations. Maine’s revised workplace drug testing law prohibits arbitrary testing and permits testing based on reasonable suspicion of impairment, criteria-based testing, and random testing using neutral selection methods. Employers should update job posting templates, establish pay ranges, review compensation records, revise approved drug testing policies, train managers on observable impairment standards, and confirm testing procedures comply with the new rules. Read more here and here.

 

Nebraska Mini-WARN Law Expands Advance Notice Rules Effective July 18, 2026

Effective July 18, 2026, Nebraska’s new mini-WARN law requires covered employers with 100 or more employees to provide 90 days’ written notice before a covered business closing or mass layoff, compared to the federal WARN Act’s 60-day notice period. Employers should evaluate Nebraska worksites early in any reduction-in-force or closure planning, including layoffs of 100 or more at a single site over a period of 30 days. Nebraska employers can read more here.

 

Tennessee Bans Non-competes for Employees Under $70k Effective July 1, 2026

Tennessee employers should prepare for a new noncompete framework applying to agreements entered into, renewed, or amended on or after July 1, 2026. The law makes non-competes void and unenforceable for employees earning less than $70,000 annually, with compensation including wages, salary, commissions, and nondiscretionary bonuses. The law also creates a presumption that two years or less for employees and independent contractors is reasonable. This means two-year non-competes are generally considered reasonable unless proven (rebutted) otherwise. The new law does not affect the enforceability of non-solicitation and non-disclosure agreements in Tennessee. Employers should review existing noncompete practices, identify workers below the compensation threshold and update standard forms and templates. Read more here.

 

Virginia Enacts Pay Transparency and Non-compete Bans Effective July 1, 2026

Beginning July 1, 2026, and continuing in phases, several new employment laws took effect.

 

As of July 1, 2026, employers must disclose good-faith wage or salary ranges in all internal and external job postings, remove salary history inquiries from hiring practices, and update recruiter and manager training to ensure compensation decisions are based on market and role-based factors.

 

Also as of July 1, 2026, non-compete clauses are unenforceable in cases of termination without cause where severance or other payments are not provided. There is no specific amount required, and the rule does not apply to agreements entered before July 1, 2026, unless the agreements are amended or renewed after that date. As a reminder, Virginia continues to prohibit non-competes for employee’s earning less than $78,000 annually and all non-exempt employees.

 

As of July 1, 2026, Virginia has banned any new or amended non-compete agreements with individuals licensed, registered, or certified by the Board of Medicine, Nursing, Counseling, Optometry, Psychology, or Social Work. Virginia employers can read more here.

 

 

Virginia Paid Sick Leave Begins July 1, 2027, and Paid Family Medical Leave in 2028

Virginia has also enacted statewide paid sick leave requirements applying to employers with at least 50 employees beginning July 1, 2027. Employers with at least 25 employees are required to comply beginning July 1, 2028, and employers with one to 24 employees beginning July 1, 2029. Employees will accrue one hour of paid sick leave for every 30 hours worked, up to 40 hours annually. Accrued, unused paid sick leave must carry over to following year, but employers can cap the accrual/usage at 40 hours in a year. Paid sick leave may be used for the employee’s own illness or health needs, to care for a family member (defined broadly) with illness or health needs, and to access safety-related services (domestic violence/sexual assault). The commissioner of labor and industry is to issue rules by July 1, 2027.

 

Virginia’s paid family and medical leave program will be administered by the Virginia Employment Commission (“VEC”) and provide eligible employees up to 12 weeks of paid leave, with payroll tax contributions shared by employers and employees. Employers should prepare for contribution obligations, job restoration and anti-retaliation protections, intermittent leave coordination, and evaluate whether any existing paid family and medical leave plan is at least as generous as the state program for VEC approval. Shared payroll contributions will begin April 1, 2028.

 

Virginia employers can read more here.