2026 Employment Law Checklist

Each year, LP’s Employment & Executive Compensation Group is pleased to provide a short checklist of steps that all companies should consider taking to measure their readiness for the coming year. We hope you find our 2026 Employment Law Checklist a helpful guide to best practices for the year ahead.

• Make sure employment documents comply with new Illinois Workplace Transparency Act (IWTA) requirements effective January 1. Amendments to the IWTA place new requirements on confidentiality covenants in employment agreements, offer letters, policies, handbooks, investigation procedures, and separation agreements, among others. Employers that “carve out” information that falls under the IWTA to avoid jumping through the hoops the law sets need to update their carve-outs to make sure employees aren’t prohibited from making disclosures about a newly expanded range of (alleged) unlawful employment actions. On the other hand, employers that expect their confidentiality covenants to cover these types of disclosures need to meet new heightened requirements. Either effective carve-outs or compliance with new requirements is critical because of consequential damages on top of the already provided penalties, fees, and costs.
• Update policies to reflect new leave and break requirements. States continue to expand family, medical, sick, lactation, and other job-protected leave and break rights, with several changes that took effect January 1, 2026. Alaska, Connecticut, Delaware, Illinois, Maryland, Minnesota, New Hampshire, New York, Rhode Island, and Washington have implemented new eligibility thresholds, benefit amounts/duration, notice and front-loading requirements, contribution rates, and coordination between state paid leave programs and employer-provided leave. Other states have refined paid sick/safe leave requirements, including dictating accrual, carryover, and permissible uses. With increasing complexity and variation across states, employers should review policies, payroll and benefits administration, manager training, and employee notices to ensure that policies and practices align with requirements in states where employees work.
• Include compensation information in job postings. It has been five years since the first states started requiring disclosure of pay and benefits information in job postings. At the beginning, it made sense for employers to try to limit the postings that included this information, but with 12 states and D.C. (and some cities) requiring compensation information in job postings, employers that have a multi-state workforce or would consider a remote employee should consider simply including pay and benefits information in postings as a matter of course.
• Prepare for greater scrutiny of equal pay registrations and audits. In recent years, Illinois and California have taken state equal pay act requirements to a new level by requiring large employers to report pay, demographic, and other workforce data and certify that they have conducted an equal pay audit. Minnesota recently adopted a similar program for state contractors. There has also been an uptick in enforcement, with the Illinois Department of Labor reporting that denials of Equal Pay Registration Certificates more than tripled between 2022 and 2025 and that the state issued 63 notices of violation in 2025. If an employer has a significant number of employees in Illinois, California, or another state with similar regulations, it is a good time to consider an internal and privileged equal pay audit.
• Take care when using artificial intelligence (AI) in employment decisions. Employers are using AI as part of their hiring and other employment decision making processes, and state legislators are taking note. In Illinois, amendments to the Illinois Human Rights Act not only prohibit using AI in ways that cause discriminatory outcomes but also significantly expand employer obligations of transparency, notice, and accountability (including detailed requirements). At the same time, Colorado’s new law (scheduled to become effective June 30, 2026) prohibits discriminatory AI use and requires monitoring and reporting of AI use in hiring, and implementation of a risk-management policy, annual impact assessments, and notices. Similarly, California amendments clarify that state anti-discrimination protections extend to decisions made through automated systems and that employers must regularly audit their automated systems to ensure there is no bias. And, surprisingly, Texas had a similar law take effect on January 1. We expect more states to follow suit. Senior leaders need to make sure that they understand how AI is used across the organization in hiring, performance management, compensation, and termination decisions, among other areas, and ensure that policies and practices align to the new requirements.
• Be careful considering credit history. States and municipalities continue to limit employers’ ability to use credit history in hiring and other employment decisions. New York is the 11th state to restrict employer use of consumer credit information, largely prohibiting employers from requesting or relying on credit history except in narrow circumstances. Similar restrictions already exist in California, Colorado, Connecticut, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, and Washington, with some local jurisdictions imposing even stricter rules. As these laws expand and evolve, employers need to review background check practices, confirm whether any exemptions apply to specific roles, and ensure that multi-state hiring processes are aligned with applicable state and local requirements to reduce compliance risk.
• Revisit remote work policies and practices. Return-to-office and in-office requirements continue to be a hot-button issue for employers, with caselaw continuing to find remote work a reasonable accommodation in many circumstances. Policies requiring in-office work need to be applied consistently among similarly situated employees and provide a process for responding to employee requests to work remotely due to a disability or sincerely held religious belief. Without consistency and processes to consider accommodations (and approve where appropriate), employers risk claims they failed to engage in the interactive process or provide a reasonable accommodation. At the same time, if an employer believes in-person work is an essential function of a job, job descriptions and postings need to support this position.
• Guard against tech-enabled fraud. Whether it’s fake or misrepresented job applicants or employees using technology to claim they’re working when they’re not, we’ve seen an increase in technology being used to defraud employers. For current employees, we are seeing employees using a “mouse jiggler” to trick their employer’s system into detecting activity when they aren’t actually working, as well as an increase in employees holding multiple full-time jobs at the same time without disclosing and/or doing the work. Similarly, we’ve seen an increase in fraudulent job applicants. It may be a “fake” applicant, one person applying on behalf of another (with or without consent), or even an applicant claiming they’re in one location when they’re actually in another. Employers must understand technological capabilities and consider policies regarding on-camera or in-person check-ins. Consider training managers of remote teams to quickly recognize when something is off with a candidate or new hire.
• Anticipate and address deepfake-driven harassment risks. AI-generated content (i.e. deepfake images, videos, and audio) is emerging as a new form of workplace harassment that can create hostile work environments, particularly when it targets individuals based on protected characteristics. Employers may face liability, not only under employment statutes but also from privacy and intentional-infliction claims, if they fail to prevent or promptly address such conduct. Update anti-harassment and digital-conduct policies to expressly prohibit the creation or distribution of manipulated media and consider training employees and managers to recognize and report deepfake use. Proactive planning, timely response procedures, and training can help mitigate legal, reputational, and cultural harm as AI-enabled harassment evolves.
• Avoid liability for tip theft! How tips are handled — and what employees have a right to retain— has been a hot topic for a number of years. Federal law says tips are the property of employees, but a new California law raises the risk by creating a private right to sue and obtain civil penalties, attorneys’ fees, and costs if an employer takes any part of a tip left for an employee, makes deductions from tips, or redistributes tips. This serves as a good reminder to make sure that you’ve vetted tip-related practices with an employment attorney.

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