Q1 Compliance Update Report
By: Christian Moro
The Rules Just Changed. Here’s What HR Needs to Know.
Federal agencies are pulling back Biden-era protections while states push forward. For HR teams managing contingent workforces, the gap between federal rollbacks and state obligations has never been wider.
If you manage a contingent workforce, January 2026 brought a wave of changes that pulled in opposite directions at once. Federally, regulators have loosened rules on who counts as a joint employer and how to classify independent contractors. But at the state level, 19 jurisdictions raised minimum wages on January 1st, and California’s emergency contact law just took effect.
The practical takeaway for HR professionals is this: federal rollbacks do not reduce your compliance burden if your workers are in states with stricter rules. If anything, the patchwork just got more complicated to navigate.
Effective Now — Joint Employment
The NLRB Narrowed the Definition of a Joint Employer: What That Actually Means for Staffing Arrangements.
As of February 27, 2026, the National Labor Relations Board formally scrapped the broader joint employer rule that had been in place since 2023 and returned to the narrower 2020 standard. For HR teams, this distinction matters a lot.
Under the rule that just went away, a company could be considered a joint employer of a contractor’s workers simply by having indirect or reserved control over conditions of employment. That created real liability exposure for companies using staffing agencies or third-party contractors, because vague contractual authority could pull them into labor disputes they never expected to be part of.
Under the reinstated 2020 standard, a company is only a joint employer if it actually exercises direct, immediate, and substantial control over core terms like wages, hours, hiring, and discipline. Theoretical authority in a contract is no longer enough to create that relationship.
What to watch
The rule change reduces your legal exposure on paper, but it does not change what actually happens on the ground. If your managers are regularly directing staffed workers day-to-day, correcting their work, setting their schedules, or handling discipline, your operations may not align with the structure you intend. Review how your teams interact with contingent workers before assuming the risk has disappeared.
Proposed Rule – Comment by April 28: Independent Contractor Classification
The DOL Wants to Simplify How You Classify Independent Contractors. There’s a Catch.
The Department of Labor published a proposed rule on February 27, 2026 that would replace the Biden-era six-factor classification test with a simplified two-factor framework. The public has until April 28, 2026 to submit comments before the rule is finalized.
The Biden-era test asked employers to weigh six separate factors with roughly equal consideration, which made the analysis complex and outcomes less predictable. The proposed framework shifts the weight to two core questions: how much control does the company exert over the worker’s day-to-day tasks, and does the worker have a genuine opportunity to profit or lose money based on their own business decisions? Three secondary factors, including the worker’s skill level, how permanent the relationship is, and how central the work is to the company’s operations, remain part of the analysis but carry less weight.
In theory, this simplification makes it easier to defend a contractor classification. In practice, the more important limitation is often overlooked: the federal test does not override state law. California’s ABC test, for example, is dramatically harder for companies to satisfy, yet it still applies in full. Any HR team operating in multiple states must apply whichever test is most stringent in each location, not default to the federal standard.
Deadline: March 30, 2026 — California SB 294
California’s Emergency Contact Law Has a Hard Deadline & Penalties That Add Up Fast.
California’s Workplace Know Your Rights Act, known as SB 294, created two obligations that apply to every employer with California workers, regardless of company size. The first, a written notice covering workers’ compensation rights, immigration inspection rights, organizing rights, and Fourth and Fifth Amendment protections, was due to all current employees by February 1, 2026. If you have not distributed that notice yet, do it now and add it to new hire onboarding going forward.
The second obligation had a March 30, 2026, deadline. Every current employee must have the opportunity to designate an emergency contact person to be notified specifically in the event of an arrest or detention at the worksite. This requirement was created in direct response to the escalation of federal immigration enforcement at workplaces, and the specific framing matters legally.
The standard emergency contact forms in your HR system are not compliant. The form must explicitly reference arrest or detention and include a checkbox authorizing the employer to make that notification. The distinction is not bureaucratic hairsplitting. California will treat a generic “emergency contact” form as non-compliant, and the penalties are structured to escalate quickly.
The financial exposure
Violations of the emergency contact requirement carry penalties of up to $500 per employee per day, capped at $10,000 per employee. For a company with 50 California workers, noncompliance could result in $25,000 in daily fines. Records must be kept for three years. For new hires, collect the form at onboarding from this point forward.
In Effect January 1, 2026 — Minimum Wage
19 States Raised Minimum Wages on January 1st. Poster Requirements Changed Too.
Pay rate compliance is one of the most operationally exposed areas for HR teams managing workers across multiple states, because the floor keeps moving. As of January 1, 2026, 19 states raised their minimum wages. For companies with significant multi-state operations, the numbers that matter most are California at $16.90 per hour, Washington at $17.13 (with Seattle at $21.30 and Tukwila at $21.65), and New York at $17.00 for New York City, Long Island, and Westchester, with $16.00 applying to the rest of the state.
New Jersey moved to $15.92 per hour, Connecticut to $16.94, and Colorado to $15.16. Missouri and Nebraska both reached $15.00, Michigan moved to $13.73, and Virginia to $12.77. Florida reaches $15.00 on September 30, 2026, and California’s healthcare worker minimum hits $25.00 per hour by July 2026. The federal minimum wage remains unchanged at $7.25, which is now largely academic for most employers with workers in regulated states.
One compliance requirement that is easy to miss amid payroll updates: every company’s worksite must post updated minimum wage posters reflecting the new rates. This is a separate obligation from the pay adjustment itself, and it applies to every physical location where workers report.
Ongoing — Monitor Weekly: Immigration Enforcement
ICE Worksite Enforcement Is at Record Levels. Here’s What HR Needs to Be Doing Right Now.
Federal immigration enforcement at worksites has intensified to a degree not seen in years, and the practical burden of staying compliant has shifted significantly onto HR teams. There are three specific areas where employers need to take action today.
First, the automatic 540-day extension that previously applied to Employment Authorization Documents when a renewal was filed has been eliminated for EAD applications filed on or after October 30, 2025. That change is significant because many HR teams were accustomed to treating a timely-filed renewal application as a bridge that kept a worker authorized past their card’s expiration date. That bridge is gone. The expiration date on the card is now the hard deadline. Workers whose EADs expire must be reverified before that date, or employment must be suspended.
Second, for workers with Temporary Protected Status from Haiti, the situation is actively in flux. Federal courts have stayed TPS terminations for Haiti and several other countries, meaning affected workers retain authorization for now, but the status of those court orders changes regularly. USCIS has issued specific guidance requiring a particular notation in Section 1 of those workers’ I-9 forms. Monitoring this weekly is not an overstatement; a court ruling can change the compliance requirement in a matter of days.
Third, E-Verify’s Status Change Report has become an ongoing monitoring obligation rather than a one-time check for hire. Running this report regularly allows employers to identify workers whose authorization was revoked after they were hired, before an enforcement action surfaces the issue. Treating E-Verify as a hire-only tool no longer reflects the current enforcement environment.
Bottom Line for HR
The Federal Pullback Does Not Mean Less Work. It Means Different Work.
The narrative around the current federal regulatory posture often gets framed as deregulation, and in some narrow legal senses, that is accurate. But for HR professionals managing contingent workforces across multiple states, the operational complexity has not decreased. The joint employer rule change reduces exposure in some arrangements, but it requires you to actually examine whether your management practices reflect the structure you intend. The contractor classification proposal simplifies federal analysis while state law remains as demanding as ever. And on immigration, the compliance obligation has shifted from passive to active, requiring new internal processes.
The states where your workers are located determine your current obligations. That has always been true, but the current gap between federal and state standards makes it more consequential than it has been in recent years. Review your California emergency contact process, confirm wage poster updates are in place at every location, and build a weekly check on TPS court status into your I-9 compliance workflow.
This newsletter is provided for informational purposes only and does not constitute legal advice. Reach out to your dedicated Workwell North America account manager for guidance specific to your workforce and operational footprint.
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