Welcome to the latest edition of AlphaStaffHCM’s Monthly Compliance Updates!
We are pleased to provide you with this April edition of the AlphaAdvisor featuring key federal and state legal developments. In this issue: EEOC guidance on telework accommodation requests, ICE’s I-9 error reclassifications, OSHA’s updated heat emphasis program, PWFA enforcement trends, tip credit reminders, notable state updates, 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 April update
Federal Law Updates
Courts are Split on Discovery of AI Chat History
Fisher Phillips explored two recent federal court cases where the Courts reaching different conclusions on whether AI chat histories created in the preparation of litigation are protected by attorney-client privilege and/or the attorney work product doctrine when the user consulted AI for legal advice. With AI use expanding across organizations, Fisher Phillips recommends employer training for managers and HR to limit or avoid AI use for hiring, firing, or other personnel matters that could potentially become relevant and/or discoverable in litigation. Read more, here.
EEOC Guidance on Remote/Telework Accommodation Requests
On February 11, 2026, The Equal Employment Opportunity Commission (EEOC) and Office of Personnel Management (OPM) issued joint technical assistance with FAQs addressing telework as a disability-related accommodation for federal workers. While not binding on private employers, it provides a strong indicator of the EECO’s enforcement approach and practical guidance for evaluating telework requests as a reasonable accommodation. The FAQs focus on three areas: participating in the application process, performing essential job functions, and enjoying equal benefits and privileges of employment. The document also discusses individualized approval, employee documentation, retaliation, and overall compliance considerations. If you may receive remote work accommodation requests, read more here.
ICE Reclassifies Specific List of Form I-9 Technical Errors to Substantive Errors
On March 16, 2026, Immigration and Customs Enforcement (ICE) updated its list of I-9 errors, reclassifying some technical errors to substantive errors, which means they are now incurable and subject to fines. Technical errors, on the other hand, may be corrected by employers. Errors like missing DOB, USCIS number, or signature date in Section 1 are now substantive. Employers should train HR staff to avoid these errors. A full list of these errors with changed classifications are available online here.
OSHA Updates Heat Emphasis Program
On April 10, 2026, the Occupational Health Safety Administration (OSHA) announced an updated National Emphasis Program (NEP) ahead of the summer season, focusing on heat risks in industries like farming, processing, manufacturing, department stores, air transportation, and certain housing and relief service providers. . The new NEP will last five years. . Employers should review these updated industries closely. In addition to federal compliance concerns, as a reminder the following states have heat safety laws: California, Colorado, Minnesota, Maryland, Oregon, Nevada, and Washington. Read Fisher Phillips’ six practical steps to protect workers from summer heat, here.
Pregnant Workers Fairness Act (PWFA) Update
The PWFA mandates that covered employers (with 15 or more employees) provide reasonable accommodation(s) for pregnancy, childbirth, and related medical conditions. Since the PWFA’s enactment, the EEOC has filed lawsuits for violations like failure to accommodate pregnancy-related conditions, unlawful termination, and forced leave for pregnancy-related conditions. In the 2024 fiscal year (the first complete calendar year with PWFA in effect), the EEOC received 2,729 charges of discrimination alleging violation of the PWFA. One of the major reasonable accommodations employers fail to provide is time off for appointments. Employers may also fail to accommodate by trying to reconcile PTO and leave policies with what is required under the PWFA, including for newer employees who have not accrued, or who have exhausted, their PTO. In these circumstances, employers must consider approving unpaid leave under the PWFA, unless there is an undue hardship. Read more on how employers can work on PWFA compliance, here.
Reduced OSHA Staffing Means Increased State Regulation
With current deregulation efforts and decreased OSHA staffing, Fisher Phillips predicts less inspections and future restrictions on OSHA’s ability to regulate risky work. However, state laws or regulations may increase. . For example, as of January 1, certain employers in Nevada were required to start monitoring air quality and reduce employees’ exposure to wildfire smoke under a new state regulation. Also, in effect as of January 1, Oregon established workplace violence prevention requirements for certain healthcare entities, and Washington expanded safety standards for isolated employees (such as janitors, security guards, and room service attendants). Fisher Phillips also expects to see continued efforts by local prosecutors to pursue criminal investigations/prosecutions related to workplace deaths, even without federal OSHA making any referrals to local government. Read more about safety trends, here.
Tip Credit Reminders
As a reminder, federal wage and hour rules currently allow employers to take a “tip credit” towards the $7.25 hourly federal minimum wage employers are required to pay employees. However, the minimum wage in many states is much higher than the federal minimum wage, and by the same standard most states have their own version of the “tip credit” that employers are allowed to take towards the minimum wage which is much less than the federal tip credit. For example, under federal law employers may claim a maximum credit of $5.12 per hour against federal minimum wage. This means under federal law workers who traditionally receive tips, such as servers, bartenders, or valets, can be paid as little as $2.13 an hour, so long as they make at least the standard minimum federal wage ($7.25 an hour) when tips are factored in. Employers should also keep in mind that they must provide proper notice to employees to apply a tip credit. Employers can read more on tip credit compliance and upcoming state law changes to tip credits, here.
State Updates
Illinois NICU Leave Law Effective 6/1/26
Effective June 1, 2026, Illinois’s Neonatal Intensive Care Leave Act (NICLA) provides unpaid leave for parents with a child in a NICU. The amount of leave required under NICLA depends on the size of the employer, but the leave only applies to employers with 16 employees. Employers with 16-50 employees must provide up to 10 days of unpaid leave while an employee’s child is a patient in a NICU. Employers with more than 50 employees must offer up to 20 days of unpaid leave. NICLA leave is available to employees regardless of how long they’ve worked for the employer or full-time status. The leave can be taken intermittently or continuously, and employers may establish a minimum increment of time in which leave may be used, as long as the increment is no greater than two hours. NICLA is separate from FMLA and applies after FMLA is exhausted, but employers cannot mandate exhaustion of paid time off prior to NICLA, unlike FMLA. NICLA also requires job reinstatement. Read more about how employers should comply here.
(Get Compliance Reminder Emails)
Indiana Applies OBBBA to State and County Income Taxes
Good news for Hoosier workers, the One Big Beautiful Bill Act’s (OBBBA) “no tax on tips and overtime” now also applies to income tax in Indiana. Approved for the 2026 Tax Year only, Indiana employees (and independent contractors regarding tips) can apply the same tax deduction limits (the cap depends on filing jointly or single) on Qualified Overtime and Qualified Tips as applied to Federal Income Tax, to Indiana’s State Income Tax and any county income taxes. Employers can read more about the deduction amounts in AlphaStaffHCM’s previous posts on OBBBA, here. For more about Indiana’s new law, read here.
AlphaStaffHCM Action Item: AlphaStaffHCM will assist our clients with the reporting of Qualified Tips and Qualified Overtime for Indiana income taxes as well as Federal Income Tax on the 2026 W2s, as required by OBBBA. However, clients are responsible for reporting tips and time and attendance to AlphaStaffHCM for Qualified Overtime and Qualified Tips to be reported correctly on W2s.
New Jersey Family Leave Act Expands 7/17/2026
On January 17, 2026, New Jersey amended the New Jersey Family Leave Act (NJFLA), with the new law taking effect on July 17, 2026. The NJFLA currently provides 12 weeks of leave every 24 months to eligible employees who require time off to care for a seriously ill family member or bond with a new child. To be eligible for NJFLA leave under existing law (up until July 17, 2026), an employee must: (1) work for an employer with 30 or more employees; (2) have been employed at least 12 months; and (3) have worked at least 1,000 hours in the 12 months preceding the requested leave start date. As of July 17, 2026, an employee will be eligible for NJFLA leave if the employee: (1) works for an employer with 15 or more employees; (2) has been employed for at least 3 months; and (3) has worked at least 250 hours in the preceding 3 months. This means smaller employers with at least 15 employees are covered, so long as at least one of those employees works in the State of New Jersey. Employers should also be aware that under the new law, employees receiving state temporary disability income benefits for their own medical condition must be restored to the same job they had before taking leave, or a job that is equivalent in terms of “seniority, status, employment benefits, pay, and other terms and conditions of employment.” Read more on how employers should comply with the new NJFLA, here.
(Get Compliance Reminder Emails)
New Jersey Updates Employee Separation Reporting
Effective December 8, 2025, New Jersey created a new reporting portal to replace the previous email method for reporting employee separations. The reporting requirement originally began July 21, 2023, which required employers to “immediately and simultaneously” transmit electronically to the New Jersey Department of Labor (NJDOL) (1) the unemployment start date contained on the Form BC‑10 provided to the separated employee and (2) additional information sufficient to enable the NJDOL to make a benefits determination. Now employers must submit using the new Employer Access portal. According to the NJDOL, the portal enables employers to submit separation information, respond to NJDOL information requests, track submissions, and manage mass‑layoff data. Read more about the new reporting requirements, here.
Washington Bans Non-Competes Effective 6/30/2027
Effective June 30, 2027, Washington state has banned nearly all non-compete covenants. As of June 30, 2027, all current employment-based and independent contractor-based “noncompetition agreements” will be void and unenforceable, and employers will not be able to have new hires enter into such agreements. Employers will still be able to include narrowly drafted non-solicitation agreements, confidentiality agreements, covenants prohibiting the disclosure of trade secrets or inventions, noncompetition covenants for individuals who are buying or selling at least 1% of total ownership interest as part of the sale or acquisition of a business, noncompetition covenants as part of certain franchisee transactions, and/or “an agreement to pay for education expenses between an employer and a current or potential employee.” The new law will require employers to notify employees, former employees, and independent contractors, in writing, by October 1, 2027, that any applicable non-compete agreements are no longer enforceable. Read more about how to comply, here.