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
AI-Powered Sextortion: A Growing Threat Your Workforce Needs to Know About
A family’s ordinary afternoon was shattered when an unknown number added multiple relatives, including a teenager, to a group chat and shared what appeared to be AI-generated explicit images of a family member, the Wall Street Journal (WSJ) reported. The goal was simple: to extort money by threatening to release the images more widely. The scheme was sophisticated, leveraging publicly available social media photos and AI tools to fabricate convincing pornographic content and to map out family relationships for maximum emotional impact. Read more
Federal Agencies Clarify Rules for Rewards in Employer-Sponsored Wellness Programs
On August 26, 2026, the U.S. Department of Labor (DOL), the U.S. Department of Health and Human Services (HHS), and the U.S. Department of the Treasury released guidance indicating that they will not take enforcement action against employers if they do not provide retroactive application of a wellness program reward back to the beginning of the plan year to employees who meet a reasonable alternative standard, instead of the traditional standard for the wellness program. The guidance follows a recent wave of litigation challenging tobacco surcharges and health-contingent wellness programs. Read more
What does the EEOC’s increased focus on DEI mean for employers?
The EEOC has experienced increased pressure to bring “DEI-related discrimination” cases. As an employer, what’s the practical impact of this shift? Read more
State Updates
California
California Aligns With Federal Law on Arbitration Agreements
On June 30, 2026, California Governor Gavin Newsom signed into law a bill making arbitration agreements unenforceable under state law when the Federal Arbitration Act (FAA) does not enforce them. Under Assembly Bill (AB) 2155, employers cannot enforce arbitration agreements in California if the FAA would not enforce them. The law will take effect on January 1, 2027. Read more
Connecticut
Deadline Imminent for Connecticut’s Expanded Electronic Monitoring Law
On June 4, 2026, Connecticut Governor Ned Lamont signed Public Act No. 26-73 (SB 472), “An Act Concerning the Electronic Surveillance of Employees,” which repeals and replaces Conn. Gen. Stat. § 31-48d. The law takes effect October 1, 2026, and significantly updates Connecticut’s longstanding requirements governing electronic monitoring of employees by employers. Read more
Illinois
Illinois Curbs Ability to Require Driver’s License in Job Postings
Effective January 1, 2027, Illinois will limit the discretion covered employers have to insist on a driver’s license1 in job postings.2 HB4758 amends the Illinois Job Opportunities for Qualified Applicants Act—commonly referred as the state’s “Ban the Box law”—to restrict covered employers from stating in a job posting that applicants must have a valid driver’s license unless driving is an essential function of the job and a business necessity.3 If a license is required, the posting must include a brief explanation of why that requirement is necessary. Employers that violate the law are subject to penalties imposed by the Illinois Department of Labor.
Illinois Introduces Workplace Protections for Menopause-Related Conditions
On August 7, 2026, Illinois enacted amendments to the Illinois Human Rights Act (IHRA) establishing workplace protections for employees experiencing menopause-related conditions. The amendments apply to Illinois employers with one or more employees and will be effective January 1, 2027.
Massachusetts
What Massachusetts’s PROTECT Act’s I-9 Notice Rule Could Mean for Employers Nationwide
On September 8, 2026, Massachusetts Governor Maura Healey released guidance implementing the PROTECT Act. The law took effect on August 5, 2026, and limits federal civil immigration enforcement on state property, in healthcare facilities, and in the workplace. Read more
Pennsylvania
Pennsylvania Mandates Human Trafficking Awareness Training for Certain Hospitality Workers
Pennsylvania recently joined a growing number of states requiring anti-human-trafficking training by hospitality employers. On July 20, 2026, Governor Josh Shapiro signed House Bill 1286, expanding Pennsylvania’s anti-human-trafficking law by requiring human-trafficking awareness training for certain hospitality industry employees and contractors. The legislation amends Pennsylvania’s existing National Human Trafficking Resource Center Hotline Notification Act, which requires certain establishments to post notices displaying human trafficking hotline information in locations where both employees and the public can readily view them. The law also imposes training, recordkeeping, and compliance obligations on covered establishments. Read more
Washington
New Form I-9 Employee Notice Requirements for Washington Employers, Effective October 1, 2026
Washington’s Immigrant Worker Protection Act (Second Substitute House Bill (2SHB) 2105) requires employers to provide notice before a federal Form I-9 inspection, provide notice of the inspection results afterward, and post a workplace notice of immigration-related rights. Employers will be subject to the new requirements on October 1, 2026. Read more
