Ones To Watch: Legislation Landscape for 2026

Ones To Watch is back with Littler’s fourth annual forecast of the year’s trendiest topics in federal and state labor and employment-related legislation. Three months into the year, with all but a handful of state legislatures currently in session, several trends have emerged for 2026. While we cannot know which of these will ultimately be enacted, the following themes stand out from the crowd.

Immigration

Just as in 2025, we see a significant amount of proposed legislation regarding immigration and employment at the state level. Many of these bills focus on the federal E-Verify program, which uses federal government records to confirm an employee’s authorization to work in the United States. While the program is voluntary, several states already require public employers and government contractors to use E-Verify. A handful of others require private sector employers to use the program for new hires. New proposed legislation would establish or enhance requirements for employers to use E-Verify. For example, New Jersey, Rhode Island, and South Dakota do not currently require E-Verify but are considering bills that would require most or all private employers to use the program.

Read more

Additionally, even in states with existing E-Verify requirements, bills have been introduced to broaden the scope of these laws. For example, Florida presently requires employers with 25 or more employees to use E-Verify, but is considering a bill that would require private employers of all sizes to use E-Verify and also require an employer to certify compliance when the employer makes its contributions to the state unemployment insurance fund. Another Florida bill would require an employer to use E-Verify to confirm an employee’s work authorization status before filing a workers’ compensation claim for that employee.

In other states, we find greater focus on protections for workers against immigration-related discrimination and retaliation. California, Tennessee, and Virginia, among others, are considering bills that would prohibit an employer from using an employee’s immigration status to coerce or retaliate against the employee, such as threatening to contact federal authorities if an undocumented employee asserts a claim for unpaid wages. Other protective legislation centers on employees’ identification documents. Colorado HB 1283 would prohibit an employer from confiscating or otherwise requiring an employee to surrender the employee's government-issued identification card. 

Finally, some states have introduced legislation that would assist bolster employers’ rights with respect to federal immigration enforcement operations. A proposed law in Tennessee provides that only an employee with “actual authority” is authorized to consent to an immigration enforcement action within a private workplace. Vermont is considering a bill that would prohibit employees in sensitive, non-public locations on an employer’s premises from granting access to federal immigration authorities unless a judicial warrant is presented.

No Tax on Tips / No Tax on Overtime

After the federal One Big Beautiful Bill Act (OBBBA) was enacted in July 2025, many similar initiatives have been proposed at the state level. The OBBBA established above-the-line tax deductions for qualified tipped and overtime income. Several states that have mirrored the federal tax code in previous years are considering adopting these changes at the state level, or have enacted separate legislation distinguishing their permitted deductions for tipped and overtime wages.

Read more

Indiana enacted a law on March 5, 2026, which permits individual tax deductions on qualifying tipped and overtime compensation in conformity with federal law, and similar measures have been proposed this session in other states, including New Mexico and West Virginia. Relatedly, several others, including Arizona, Illinois, and New York, are considering legislation that would allow for state-level deductions for overtime mirroring those under the OBBBA. Demonstrating more of a middle-ground approach, Virginia SB 694 would permit taxpayers to deduct 25% of their federal tip deduction at the state level.

Conversely, some jurisdictions have opted to decouple their tax code from the federal Internal Revenue Code in response to these new federal deductions. Likely the most newsworthy of these efforts in 2026 so far has been the District of Columbia, where the city council did not incorporate the OBBBA’s tip and overtime deductions into the District’s tax code, resulting in a back-and-forth with Congress and the federal government’s first disapproval of a D.C. revenue law.

Requirements for Job Postings Beyond Pay Range Disclosure

Over the past several years, about a third of U.S. states have enacted pay transparency laws, which require that job postings must include the wage or wage range for the position being advertised. This year, some states have proposed laws that would require even greater transparency in the hiring process. These bills are intended to prevent an employer from posting a job that is not actually vacant or for which the employer has already identified a candidate.

Read more

For example, Kentucky HB 342 prohibits postings for “ghost jobs,” which the bill defines as “any job posting that is not intended to be filled within a reasonable time frame or is posted by an employer without the intention to hire.” Similarly, New Jersey SB 2136 would require job postings to include a statement disclosing whether the posting is for an existing vacancy or not, and if the posting is for an existing vacancy, an estimated timeframe for when the position will be filled. If the posting is for a position that is not vacant, the employer would be required to include a disclaimer that there is no existing vacancy. This bill would also require employers to notify third-party job posting sites to remove inactive job listings. New York AB 6292 would require each job posting to affirmatively state whether the posting is for a current vacancy, and if so, the date by which the employer intends to fill the position. If the posting is not for a current vacancy, the posting must include a statement that the employer is simply gathering resumes for future job openings.

Another similar type of bill is legislation designed to create greater transparency into an employer’s procedures for promotions or lateral transfers. For example, New Jersey AB 1990 would require an employer to notify current employees of open positions or opportunities for promotion. A bill pending in New York City would require an employer to make a job opportunity known to all current employees on the same calendar day and prior to the date on which the employer makes a selection decision.

Portable Benefits for Independent Contractors

As the so-called “gig economy” has expanded and app-based worker populations have substantially increased, so has attention on the status of these workers. After the federal Department of Labor reinstated an opinion letter in May 2025 clarifying its position that digital platform workers are independent contractors, there is renewed interest in these workers’ ineligibility for benefits such as unemployment insurance, certain types of leave, and overtime pay.

Read more

In response, states have been active in considering legislation that would provide independent contractors with optional portable benefit plans. These plans, which are voluntary, are held by the worker, and hiring parties or workers can choose to contribute funds to pay for benefits such as health insurance, unemployment or disability coverage, and retirement plans. These funds may be withheld from the contractor’s compensation, or voluntarily contributed by the hiring entity. Already this year, Wyoming has enacted a law establishing these voluntary benefit accounts, West Virginia’s voluntary benefits bill has passed both houses of the state legislature, and at least seven other states, including Florida, Kansas, and Kentucky, are considering similar legislation.

Importantly, each of the bills enacted or introduced this session that would establish these voluntary benefit accounts includes language specifying that contributions to a worker’s portable benefit account may not be used as a factor in determining that worker’s employment status or cause the worker to be classified as an employee.

TRAP Laws and Stay-or-Pay Provisions

Training repayment provisions (“TRAPs”) and similar stay-or-pay provisions have been highly legislated in 2026. These provisions are agreements between employees and employers that require an employee to pay certain costs that employers incur, such as the cost of training, if the employee leaves their position before a specific time period. Current legislation seeks to mostly ban these provisions.

Read more

In late 2025, both New York and California adopted their own respective “Trapped at Work” laws. California’s law prohibits employers from requiring employees or applicants to repay certain debts, such as the cost of training or requiring the worker to pay the employer when the employee is terminated or leaves employment, with certain exceptions. Similarly, New York’s law prohibits “promissory notes” as a condition of employment that would force financial obligations on workers at the end of employment. Notably, New York amended its provisions in the early 2026 legislative session to push the effective date to December 19, 2026, among other amendments.¹ Multiple other states have laws that address similar stay-or-pay provisions.² 

In the 2026 legislation season, various jurisdictions are seeking to restrict these provisions. For example, Illinois, Maryland, Minnesota, and New Jersey have introduced similar legislation prohibiting the repayment of certain employer expenses at the end of employment. As of March 18, 2026, Virginia HB 923 has passed the Virginia House. The bill outlines certain stay-or-pay contracts that are prohibited, and provides multiple exemptions to the law. If passed, the bill allows an employee a private right of action, and employers could be subject to a civil penalty of $10,000 per violation.

State Level Control of Labor Relations

For most of 2025, the National Labor Relations Board (NLRB) lacked a quorum, and was therefore unable to create new precedent and issue final decisions during that period. In response, states sought jurisdiction over the NLRB’s cases. 

Read more

In September 2025, California enacted AB 288, allowing the California Public Employment Relations Board to take jurisdiction over the NLRB’s cases under specific circumstances, such as when the NRLB declines jurisdiction. Subsequently, the NLRB sued on the grounds that the law was likely preempted by the National Labor Relations Act (NLRA). In December 2025, the U.S. District Court of the Eastern District of California agreed that the law was likely preempted and the court mostly blocked the California law. Similarly, New York expanded its authority for the New York Public Employment Relations Board to exercise jurisdiction over all employees in the state except for cases in which the NLRB affirmatively exercises jurisdiction over employers, employees, trades, or industries pursuant to a federal court order. As expected, the NLRB filed suit seeking to prevent the enforcement of the law, and it is still pending. 

Hawaii has introduced SB 2460, which would provide that employees protected by the Hawaii Employment Relations Act include individuals under the jurisdiction of the NLRA when the NLRB does not have a quorum for 30 or more days, and has not exercised jurisdiction over the employee pursuant to a federal district court order. Maryland HB 1539 would establish a state labor relations board to oversee collective bargaining activities in private employment. If passed, Massachusetts SB 1327 would provide that if federal law ceases wholly or partially to preempt the regulation of private labor management relations in Massachusetts, state law labor protections would govern. Finally, New Jersey initially introduced a law that was focused on cannabis employers, but Senate committee amendments would have established state labor jurisdiction over all private employers. Ultimately, the amendments were written out, and the bill became law relating to cannabis employers only. 

As of January 7, 2026, the NLRB has formally regained quorum. At this time, it is expected that more states will introduce similar legislation for potential future NLRB disruptions.

Accommodation for Menopause and Related Conditions

In 2025, Rhode Island enacted a first-of-its-kind law that expanded pregnancy accommodation provisions to require employers to accommodate certain menopause-related conditions. Shortly thereafter, Philadelphia, Pennsylvania followed by requiring employers to reasonably accommodate menstruation, perimenopause, and menopause if the symptoms substantially interfere with the employee’s ability to perform their job functions. 

Read more

During the 2026 legislative session, menstrual health protection bills are gaining momentum, ranging from reasonably accommodating certain menstrual conditions, prohibiting discrimination due to menopause or related conditions, or even providing time off or hybrid schedules as potential accommodations. Connecticut, Maryland, Pennsylvania, and Virginia have bills pending that would require employers to provide reasonable accommodations for menopause, unless it would cause the employer an undue hardship. However, employers should note that “menopause” and “related conditions” are only vaguely defined, if defined at all.

Generous leave accommodations have been introduced in Illinois SB 2967, allowing employees to use up to 40 hours of leave under the Paid Leave for All Workers Act for menstrual health reasons, and if this leave is insufficient, an employee may request an additional 40 hours of paid leave per year. Employees that make a request for leave for three days or more must have a documented history of a debilitating menstrual health condition. Under the law, “menstrual condition” means symptoms caused by menstruation, endometriosis, polycystic ovary syndrome, or menopause. New York’s AB 10270 and SB 9244 would permit an individual to take family leave to seek services for menopause, and would allow an additional five days of leave per 52 weeks for menopause. Finally, New Jersey’s SB 3057 would require employers of individuals suffering from specified menstrual disorders to provide remote work accommodations for two full days a month.

Medical Privacy – Vaccine Discrimination

Since the COVID-19 pandemic, an emphasis on personal liberty related to employee vaccinations and other medical interventions has crept into virtually all legislative bodies nationwide. Several states have passed laws since 2020 to limit COVID-19 vaccine mandates in private employment, increasing religious exemptions for these mandates, and discrimination protections for employees that choose, or refuse, COVID-19 vaccinations. Some states, such as New Jersey and South Dakota, have continued to introduce legislation specifically to regulate COVID-19 vaccination and discrimination in 2026. However, this trend has shifted to include an employee’s right to privacy with regard to all vaccinations or medical interventions generally. 

Read more

For example, Missouri is considering a bill that would prohibit discrimination against an employee due to their private medical history or medical choices. In addition, Iowa’s HB 2368 would expand on its prohibition of employer-required COVID-19 vaccinations by prohibiting discrimination based on medical interventions. As proposed, a medical intervention is defined as “a health care procedure, treatment, device, drug injection, medication, biologic or action taken to diagnose, prevent, maintain, or treat the health or biological function of a person.” Indiana and Oklahoma would prohibit certain medical interventions as a condition of employment.

States are also focusing on creating vaccination exemptions in 2026. Arizona SB 1016 would require employers to provide reasonable accommodation on the basis of religion for employees whose beliefs prevent them from taking certain medical products. Further, the bill would not allow an employer to inquire into the accuracy of the employee’s religious beliefs beyond the extent of what is allowed under federal law. Kentucky’s SB 108 would require employers that mandate employee immunizations to grant exemptions on the basis of religious belief and medical contraindication. If enacted, it would mandate employers to notify employees about the allowable exemptions and would require the employee to acknowledge receipt in writing.

Prohibiting Discrimination Based on Intersectionality or Perceived Characteristics

As the type and presentation of discrimination claims in employment continue to evolve, so do laws protecting employees from unlawful discrimination. The 2026 legislative session has been no different, as legislatures consider expanding antidiscrimination protections beyond their existing scope and updating what constitutes discrimination. Additionally, as local jurisdictions often administer their own antidiscrimination ordinances, this remains doubly important for employers at the state and local level.

Read more

While antidiscrimination laws have long protected against unfair treatment based on certain protected characteristics (race, sex, national origin, religion, etc.), legislators across the country have sought to expand these protections, and most recently to incorporate circumstances where an employee is perceived to possess a protected characteristic, regardless of whether they actually do. For instance, California AB 2563 would clarify that the definition of “sex” for purposes of antidiscrimination law includes any actual or perceived characteristics related to sex. Other bills go further: Hawaii HB 1878 would prohibit discrimination based on a person’s perceived possession of protected characteristics, as well as their perceived association with a person who is perceived to possess a protected characteristic. Importantly, these bills also prohibit discrimination based on a person’s combination of protected characteristics.

Moreover, local legislative bodies continue to expand their own antidiscrimination protections. Proposed legislation in New York City would prohibit discrimination based on actual or perceived poverty, a proposed ordinance in Philadelphia would prohibit discrimination based on perceived citizenship or immigration status, and the Portland, Oregon city council recently passed legislation prohibiting discrimination based on family or relationship structure.

Artificial Intelligence

Artificial intelligence continues to be a major target of state-level regulatory efforts. In December 2025, President Trump signed an executive order entitled “Ensuring a National Policy Framework for Artificial Intelligence,” which attempts to limit states’ ability to regulate the use of AI by establishing an AI Litigation Task Force within the Department of Justice that is authorized to challenge state AI laws on the grounds that they are unconstitutional burdens on commerce, are preempted by federal regulations, or are otherwise unlawful. Nonetheless, many states have introduced AI-related bills in 2026 that would set guardrails on the use of AI, including legislation that would impact private sector employment law. These tend to fall into one of several categories:

Read more

Comprehensive regulation of automated decisionmaking tools: These bills (such as New York AB 9601) would prohibit the use of automated systems to make employment decisions absent a risk assessment and a meaningful human review of the output of the automated system prior to the final employment decision, and would also require employers to notify applicants and employees prior to use of an automated system.

Limitations on the use of “bossware”: These bills, including California AB 1883, aim to regulate the use of workplace surveillance tools (software or devices that collect worker data, activities, communications, actions, biometrics, or behaviors) to profile workers related to protected classifications or protected activity, or to serve as the sole driver of personnel-related decisions such as discipline, promotions, and terminations.

Prohibition against surveillance data-based wage setting: Illinois SB 2255 and similar bills would prohibit an employer from using surveillance data as part of an automated decision system to inform the individualized wages paid to employees without first providing clear disclosures and ensuring the data used is tailored to each employee’s job tasks.

Business restructuring: These bills, such as Maryland HB 314, would require an employer to notify the state labor department and affected employees regarding AI-related layoffs and/or offer job retraining to employees whose positions were eliminated due to AI advancements.

Honorable Mention: Additional Notable Trends

Along with the categories of legislation discussed above, the following are topics and trends to keep an eye on in 2026:

Read more

Workplace standards for warehouse workers. These laws, already in place in several states, require employers to notify warehouse employees upon hire of any quotas that they will be subject to during employment, as well as any adverse employment actions that may result from the employee’s failing to meet a quota. For 2026, some of these bills have new wrinkles. Missouri’s bill would require a warehouse employer to report any AI-related job impact it has experienced to the state. Legislation pending in Congress and in Virginia would require warehouse employers to provide employees with information relating to how quotas are monitored, including whether workplace surveillance technology is in place to collect and assess employee work speed data. Arizona HB 2488 would require employers with more than 25 warehouse employees to establish a labor management safety committee, and Hawaii HB 1791 would prohibit quotas that would prevent warehouse workers from reasonable use of bathroom facilities.

Disparate impact theory of liability codified. In September 2025, the EEOC closed almost all pending charges based solely on allegations of disparate impact discrimination in response to an executive order directing all federal agencies to cease using disparate impact theory in investigations of violations of federal civil rights laws. Several states, including Illinois, Minnesota, and New Jersey, have responded by introducing legislation that would codify the disparate impact theory of liability in their antidiscrimination statutes. New York enacted such a law in December 2025.

Heat illness mitigation protocols. In July 2024, the Occupational Safety and Health Administration proposed a federal heat standard aimed at protecting workers from heat-related illnesses in both indoor and outdoor work settings. While this proposed standard continues to work through the federal rulemaking process, action has continued at the state level to prevent and mitigate heat illness in the workplace. Virginia, Georgia, Arizona, and Pennsylvania are among the states that have heat illness mitigation bills pending.

Workplace standards for security employees. In the last six months, three cities – Baltimore, Philadelphia, and New York City – have enacted ordinances establishing minimum compensation and/or other labor standards for security employees. These ordinances define “security employee” fairly broadly, pulling in a wide range of employers for coverage under these laws. New York City’s and Baltimore’s laws require minimum hourly compensation to be established by a city agency as well as supplemental benefits including paid time off. The Philadelphia law requires employers of security employees to ensure that these workers have completed a certified training program. The employer must bear all training costs and compensate employees for training time.

Regulation of noncompetition agreements. After the Biden-era Federal Trade Commission’s rule prohibiting nearly all noncompete agreements was blocked by a federal court and subsequently rescinded during the second Trump administration, numerous states have moved to regulate the use of these agreements. While some would provide a blanket prohibition on noncompetes similar to the federal rule, others are limited to prohibiting their use within certain industries or for employees paid below a certain wage.

Whistleblower protections. There is renewed interest in expanding whistleblower protections in 2026. Various bills seek to provide protections for employees who report their employers for general unlawful conduct, failure to report security vulnerabilities, and for violations of workplace safety and health requirements, immigration law, and other industry-specific statutes. Wyoming and Florida are considering bills that would provide whistleblower protections to government contractors that report specified legal violations, and Connecticut’s SB 403 would prohibit employers from disciplining or otherwise penalizing a cybersecurity employee if they report a material security deficiency to Connecticut’s Division of Emergency Management and Homeland Security.

Conclusion

While it is uncertain which, if any, of the above bills will become law, it is clear states will continue to take the lead in shaping employment law. The second quarter of the year is when many of these laws will either advance or die in committee, so employers are encouraged to pay attention to state and local legislative activity.