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Takeaway
Stay ahead of 2026 HR compliance updates with key changes to federal wage laws, state tax withholding tables, paid sick leave requirements and new employer reporting obligations.
Paycom is committed to helping HR professionals navigate the ever-changing compliance landscape. In this edition of State of Compliance, we look at changes across four states and at the federal level. Please note this list is not intended to be comprehensive. Our team is constantly monitoring for updates that may impact organizations across the country.
Federal HR Compliance Updates
The Department of Labor issued a final rule, implementing federal court judgments that vacated the department’s 2024 final rule revising the FLSA white-collar exemption regulations. The amendment removes the vacated 2024 regulatory text from the Code of Federal Regulations and restores the Part 541 regulations as they existed before the 2024 rule took effect.
Effective May 15, 2026, the DOL issued a final rule restoring the Part 541 regulations to the 2019 levels. As a result:
- The federal standard EAP salary threshold reverts to $684 per week, or $35,568 per year.
- The highly compensated employee threshold is back to $107,432 per year.
- The 2024 salary increases to $844 per week, $1,128 per week, $132,964 per year and $151,164 per year are no longer operative.
- The automatic three-year update mechanism is removed.
- The duties tests and salary basis requirements remain the same.
State HR Compliance Updates
Illinois
The Illinois Department of Employment Security (IDES) has announced a change to the Illinois Administrative Code regarding employer contributions to employee 401(k) plans.
Effective July 1, 2026, employer contributions to a worker’s 401(k) plan made on and after this date will no longer be considered “wages” under the Illinois Unemployment Insurance Act. As a result, these employer contributions should not be included when reporting wages paid to employees to IDES after July 1.
Please note that employees’ contributions to their own 401(k) plans will continue to be considered “wages” for reporting purposes.
To learn more, see Section 2730.155 of the Rules of the Illinois Department of Employment Security.
Utah
The Utah State Tax Commission released revised withholding tables effective June 1, 2026, in response to Senate Bill 60 being signed on March 23. The new tables are effective retroactively to Jan. 1, 2026.
For more information, visit the Utah State Tax Commission website.
Virginia
Virginia employees must begin accruing at least one hour of paid sick leave for every 30 hours worked, under House Bill 5, signed May 20, 2026, and effective:
- July 1, 2027, for employers with 50 or more employees
- Jan. 1, 2028, for employers with 25 or more employeesFreq
- Jan. 1, 2029, for all employers
Employees may accrue or use up to 40 hours of paid sick leave each year unless an employer offers more. Employers may front-load leave instead of using accruals, and existing PTO policies may comply if they meet the law’s requirements.
Washington
House Bill 2105 takes effect June 11, 2026, with core employer compliance requirements effective Oct. 1, 2026. This bill requires employers to notify workers within five business days of receiving a Form I-9 inspection notice and again within five business days of receiving inspection results.
This law includes antiretaliation protections, limits on reverification practices and potential penalties for noncompliance.
To learn more, visit the Washington State Legislature website.
House Bill 2345 changes how paid family and medical leave premiums are split between employers and employees, while keeping overall funding about the same. This bill is effective June 11, 2026.
Visit the Washington State Legislature website for more information.
House Bill 2479, effective June 11, 2026, updates how the state investigates and enforces unpaid wage complaints.
To learn more about this new law, visit the Washington State Legislature website.
