Each month, Optimum HR gathers the latest updates and changes to federal and state employment law. Read on to learn how these changes may affect you, and how Optimum can help you ensure compliance.
Federal Updates
Heightened Military Engagement: Unpacking Employers’ USERRA Responsibilities
The recent United States military engagement in the Middle East, as well as significant domestic deployments in multiple large cities in 2025 and 2026, underscores the increasing reliance on National Guard and Reserve forces. Recruitment trends indicate an expanded operational role with nearly 50,000 National Guard enlistees added in 2025. At this time, understanding employers’ compliance obligations under the Uniformed Services Employment and Reemployment Rights Act (USERRA) is more important than ever. Read more
NLRB Formally Reinstates the 2020 Joint Employer Rule
The National Labor Relations Board (NLRB) has officially reinstated a narrower standard to determine joint employer status under federal labor law by formally reinstating its 2020 rule and withdrawing a 2023 rule that was vacated by a federal court in March 2024. The new rule provides that an employer must exercise “substantial direct and immediate control over one or more essential terms or conditions of employment” to be considered a joint employer with another entity. Read more
Where the PWFA Stands Today: Key Legal Lessons for Employers
March is Women’s History Month, lending itself to a review of the lessons learned over the last three years since enactment of the Pregnant Workers Fairness Act (PWFA). While the guidance from the U.S. Equal Employment Opportunity Commission (EEOC) provides some insight, employers regularly face accommodation requests falling within areas of lingering ambiguity. There are, however, some recent enforcement actions that may provide some clarity for navigating unchartered waters. Read more
Use of AI Tools as a Reasonable Accommodation?
To date, the conversation surrounding artificial intelligence tools in the workplace has mostly focused on an employer’s use of AI in the decision-making process and related risks and guidance. Given the privacy and security concerns inherent in the use of AI, many employers have also implemented AI policies that prohibit or significantly limit an employee’s ability to use AI tools for work-related tasks. However, Cedeno v. Walt Disney World Parks and Resorts, currently pending in the United States District Court for the Middle District of Florida, marks a shift in this conversation and raises familiar ADA principles in a novel context: if, when, and how AI tools may constitute a reasonable accommodation under the ADA. Read more
State Updates
Alabama
Alabama Bans Confidentiality Agreements That Prohibit Disclosure of Sexual Abuse
Alabama has joined a growing number of states restricting the use of nondisclosure agreements in cases involving sexual abuse. On February 18, 2026, Governor Kay Ivey signed into law Senate Bill (SB) 30, known as “Trey’s Law.” Read more
California
California AB 692 and Its Impact on Employer Green Card Reimbursement Agreements
California’s AB 692, officially in effect as of Jan. 1, 2026, is bringing notable changes to how employers may use repayment or “stay or pay” provisions in employment agreements. While the law applies broadly to various repayment obligations, AB 692 has meaningful implications for organizations that have historically used reimbursement agreements when sponsoring foreign national employees for U.S. permanent residency (green cards). Read more
Colorado
Colorado Amends Wage Compliance Rules, Revises Recordkeeping Requirements, and Implements New Youth Employment Standards
The Colorado Department of Labor and Employment (CDLE) has adopted COMPS Order #40, amending administrative regulations implementing the Colorado Wage Act, and released an updated COMPS Order poster. The revisions, which took effect on February 1, 2026, expand the definition of “employer,” allow localities to increase tip credits consistent with recent statutory amendments, and increase employers’ recordkeeping obligations for vacation and sick leave. Colorado also adopted final rules implementing the Colorado Youth Employment Opportunity Act, increasing compliance obligations for employers that hire minors, and amended Wage Protection Rules, which modify the calculation of the pay rate for sick pay under the Healthy Families and Workplaces ACT (HFWA). Read more
Connecticut
Connecticut Supreme Court Rules Screening Time Must Be Paid
The Connecticut Supreme Court recently issued an impactful decision that will affect how employers across the state handle security screening procedures and wage calculations. In Del Rio v. Amazon.com Services, Inc., the court held that time employees spend undergoing mandatory security screenings on their employer’s premises is compensable as “hours worked” under Connecticut General Statutes § 31-76b(2)(A). The court also held that Connecticut’s wage laws do not incorporate a de minimis exception that would permit employers to disregard small amounts of otherwise compensable time spent by the employees undergoing the security checks. Read more
New York
New York Amends the Trapped at Work Act: What Changed and What Remains Unclear
New York recently enacted amendments to the Trapped at Work Act that delay its effective date to December 19, 2026, and redraw several key boundaries. The statute still broadly prohibits employment agreements that require an employee to pay money if employment ends before a stated period. Read more
NYC Employers: Changes to NYC Earned Safe and Sick Time Act Require Prompt Action
On February 22, changes to the New York City Earned Safe and Sick Time Act (ESSTA) and the Temporary Schedule Change Act took effect. In short, employers will be required to provide additional paid leave and unpaid leave to all employees, including new employees upon hire with no probation period. By March 8, employers are required to revise policies and procedures to comply, and must also physically post and distribute an updated notice of employee rights to current employees and new hires. Read more
Virginia
Virginia Court Ruling Clarifies State’s Ban on Noncompete Agreements Against Low-Wage Workers
On January 27, 2026, the Court of Appeals of Virginia ruled in Sentry Force Security, LLC v. Barrera that employers in the state: (i) can enforce customer nonsolicitation clauses that restrain low-wage workers from directly soliciting a customer, (ii) cannot enforce customer nonsolicitation clauses that purport to restrain low-wage workers from accepting unsolicited business from a customer, and (iii) cannot enforce employee nonsolicitation provisions against low-wage workers. Read more
