Parental Leave Takes Center Stage in Employment Updates, While California Leads on AI, ICE Workplace Regulations

A number of states have enacted new or amended employment laws, many of which take effect on January 1. While these developments span a wide range of issues, clear themes emerge across jurisdictions — reflecting broader societal and regulatory responses to rapidly evolving workplace challenges.

One trend dominates the changes nationwide: new or expanded parental leave policies, both paid and unpaid. And in California, always at the forefront of workplace regulation and employee rights, there is an emphasis this year on two new and fast developing legal issues: Artificial Intelligence in the workplace and heightened federal immigration enforcement. We can expect to see more states address these issues in the near future.

This roundup provides a high-level overview of generally applicable labor and employment law developments across the country. Note that it does not address industry-specific requirements that may affect certain employers and should be considered when reviewing policies.

CALIFORNIA

Expanded Paid Sick Leave Use (AB 406) – January 1, 2026

As we wrote in a previous update, AB 406 amends paid sick leave laws to include jury duty and subpoenaed appearances. Now, as of January 1, employees can use sick pay (or take unpaid time off without penalty) to attend judicial proceedings related to certain crimes. 

Expanded Requirements for Cal-WARN Notices (SB 617) – January 1, 2026

Currently, covered employers must give employees 60 days' notice of a mass layoff, termination, or relocation pursuant to the Worker Adjustment and Retraining Notification Act. Under the new law, those employers are now required to provide additional information in their notices, including:

• Whether the employer will provide the impacted employees with coordinated services
• Information regarding CalFresh, the state’s name for the federal Supplemental Nutrition Assistance Program
• A specific description (provided in the law) regarding rapid response activities offered by the Local Workforce Development Boards
• Employer contact information for impacted employees 

Whistleblower Protections for Employees of “Frontier Developers” (SB 53) – January 1, 2026

The Transparency in Frontier Artificial Intelligence Act (TFAIA) is a landmark law in the Artificial Intelligence landscape. It provides protections for employees who report “catastrophic risks” arising from activities of frontier AI developers and imposes a civil penalty for noncompliance. The TFAIA also requires large AI developers to publicly publish a detailed outline describing how the company has incorporated industry standards and best practices into its AI framework. The goal, according to the state’s press release, is to “advance the development and deployment of artificial intelligence that is safe, ethical, equitable, and sustainable by fostering research and innovation.” 

Employee Protections Against AI-Imposed Discrimination in Hiring (AB 316) – January 1, 2026

AB 316 prevents employers from avoiding liability when their use of AI results in discrimination against applicants or employees. The law does not prohibit the broad use of AI, but it imposes specific regulations and protections for employees or applicants that are harmed. Companies can still use AI to perform various tasks in the hiring process, including, but not limited to: providing assessments to measure applicants’ aptitude, skills, personality fit, etc.; developing ads for open positions directed at targeted groups; screening resumes for certain terms; analyzing voices and facial expressions as part of an assessment; and analyzing employee data acquired from third parties. However, the company is liable for any discriminatory outcome, even if it uses a third-party vendor to develop and/or administer the tools. Employers must also provide notices of use and opt-out rights to employees and applicants. 

Stay-or-Pay Contracts Limited (AB 692) – January 1, 2026

California’s Stay-or-Pay law imposes further restrictive covenants upon employee contracts executed on or after January 1. Employers are now prohibited from clawing back sign-on bonuses, relocation expenses, and education expenses from a terminated employee. 

Of course, there are various exceptions. For example: 

• Signing bonuses made at the commencement of employment. The bonus cannot be tied to performance, the repayment obligation must be memorialized in a separate agreement, the time period cannot be more than two years, no interest can be charged, it must be prorated if the employee’s departure is earlier than the term, and the funds can only be clawed back in cases of resignation or termination for misconduct. Further, the employee must be notified of his or her right to an attorney’s review and be given five business days for the review, and the employee must have the option to defer receipt of the signing bonus until the term has been completed and the bonus fully earned.
• Repayment of Tuition for a transferable credential offered by a third-party institution. The agreement must be in a contract separate from the employment agreement, and it must not be a requirement for the position. The repayment terms cannot demand an amount higher than the cost of tuition paid by the company. There can be no repayment requirement if the employee was terminated unless there was employee misconduct.
• Certain leases or other real estate financing or purchase agreements are allowed.

The new law creates a private right of action under the California Labor Code, providing statutory or actual damages, injunctive relief, and fees and costs for violations. Employers that include stay-or-pay provisions in employee contracts are encouraged to read the full bill. 

Expanded Pay Transparency (SB 642) – January 1, 2026

Most employers are already required to disclose position pay scale in job postings, but SB 642 modifies the definition of “pay scale” to mean a good-faith estimate of a wage range the employer will pay upon hire. It also adds definitions of “wages” and “wage rates” to include “all forms of pay, including, but not limited to, salary, overtime pay, bonuses, stock, stock options, profit sharing and bonus plans, life insurance, vacation and holiday pay, cleaning or gasoline allowances, hotel accommodations, reimbursement for travel expenses, and benefits.” Note that the new law only applies to the relevant section of the Labor Code, and these definitions are not to be applied to other statutes. 

Additionally, the statute of limitations for equal pay claims is extended from two to three years, and the statute now includes language related to continuous claim accrual. 

Minimum Wage Increases to $16.90/hour – January 1, 2026

The statewide increase is the floor, while certain fast food and specified health care facility workers, among other trades, have higher wage rates. Furthermore, many cities and counties will have more significant increases. Employers with employees earning minimum wage should review the changes carefully, as there are nuances within local laws. 

Workplace Know Your Rights Act Assists Employees Facing Immigration Enforcement During Work Hours (SB 294) – February 1, 2026

To address the increase in immigration enforcement actions, the Know Your Rights Act requires all employers to provide standalone written notice to all California employees and collective bargaining representatives of certain workers’ rights, including those related to immigration inspections and when interacting with law enforcement. As is typical, the Labor Commissioner will post a model notice by January 1, and employers will have 30 days to distribute the notice. Thereafter, employees must provide the notice annually and to all new employees. Employers must also demand judicial warrants for ICE access to nonpublic areas of the workspaces. 

Finally, on March 30, 2026, employers will also be required to give employees the option to provide emergency contact information in the event they are arrested or detained during work hours. If an employer is aware of an arrest or detainment, they must notify any provided contact. 

The Act imposes daily statutory damages for an employer’s failure to provide the notices, up to $10,000 per employee.

NEW YORK

Growing State Mandate for Paid Sick, Unpaid Sick, and Paid Prenatal Leave – February 22, 2026

Paid Sick Leave Expanded to Smaller Employers (SB 5005) – January 1, 2026

Covered employers now include companies with 11 or more employees.

DELAWARE

Paid Family and Medical Leave (SB 1) – January 1, 2026

Provides 12 weeks of paid parental leave, six weeks of paid caregiver leave, or six weeks of paid medical leave.

FLORIDA

Minimum Wage Increases to $15.00/hour – September 30, 2026

The final increase in a voter-approved constitutional amendment from 2020 to gradually increase minimum wage by $1 annually goes into effect in September. Thereafter, the state intends to adjust the rate annually for inflation, based on the Consumer Price Index. 

ILLINOIS

Unpaid Leave for NICU Care – June 1, 2026

The Family Neonatal Intensive Care Leave Act (NICLA) provides unpaid leave of 10-20 days. NICLA supplements the existing Paid Leave for All Workers Act, which offers paid leave.

Retaliation Protection for Electronic Recording (HB 1278) – January 1, 2026

Employers may not discriminate or retaliate against employees for recording acts of violence on employer-provided electronic devices.

MINNESOTA

Paid Family and Medical Leave (HF 2) – January 1, 2026 

Employees are entitled to 12 weeks of paid leave for a serious health condition or for family care or bonding. The limit is 20 weeks of aggregate leave in a benefit year.

Meal and Rest Breaks (SF 17) – January 1, 2026

Employers must provide a paid rest break of 15 minutes every four hours of consecutive work. After six hours of consecutive work, employees are entitled to a paid 30-minute meal break. 

NEW HAMPSHIRE

Unpaid Family and Medical Leave (HB 2) – January 1, 2026

Establishes unpaid, job-protected leave up to 25 hours per year for covered employers. Employees may take leave for childbirth, postpartum, and pediatric care purposes. 

NORTH DAKOTA 

SB 2047 – January 1, 2026

Employers must obtain consent before withholding employee income taxes.

TEXAS

HB 149 – January 1, 2026 

The law provides for the regulation of AI programs to prevent discrimination and enhance disclosure requirements.

WASHINGTON

HB 1524 – January 1, 2026

Certain employers are required to provide annual training on sexual assault and harassment.