Topics covered
Takeaway
Stay ahead of 2026 HR compliance updates with key changes to federal wage laws, state tax withholding tables, unemployment insurance, new employer reporting obligations and more.
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 eight 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 salary increases for 2024 (to $844 per week and $132,964 per year) and 2025 (to $1,128 per week 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
Arkansas
The Arkansas Department of Finance and Administration released revised withholding tables in response to House Bill 1001 being signed on May 6, 2026. The new tables are effective retroactively to Jan. 1, 2026.
For more information, visit the Arkansas Department of Finance and Administration website.
Georgia
The Georgia Department of Revenue released revised withholding tables in response to House Bill 463 being signed on May 11, 2026. The new tables are effective retroactively to Jan. 1, 2026.
For more information, visit the Georgia Department of Revenue website.
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.
Indiana
Indiana Senate Bill 162, effective July 1, 2026, updates the state’s unemployment insurance laws.
The new law:
- affects how vacation and sick leave payments are treated in regard to unemployment benefits
- affects the definition of “employment” in regard to certain organizations
- tightens the definition of “suitable work”
- codifies administrative procedures for claims
- authorizes limited direct deposit disbursements
- addresses disaster unemployment assistance
To learn more, visit the Indiana General Assembly website.
Mississippi
Mississippi House Bill 4073 establishes the Mississippi Work and Save Program and takes effect July 1, 2026.
This state-sponsored retirement savings initiative:
- allows eligible employees and employers to voluntarily contribute to Roth IRAs via payroll deductions
- updates Mississippi’s public retirement and deferred compensation systems
- places limits on when and how retirees can return to public-sector work
To learn more, visit the Mississippi Legislature website.
Utah
The Utah State Tax Commission released revised withholding tables for payroll periods beginning on or after 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
There are a number of Virginia laws taking effect July 1, 2026:
House Bill 1207/Senate Bill 2 establishes a statewide paid family and medical leave insurance program.
House Bill 238 is a labor and employment law covering worker classification, wage provisions and sentence credits.
House Bill 636/Senate Bill 215 prohibits employers from requesting or relying on a candidate’s wage or salary history and requires employers to include a good-faith wage or salary range in job postings.
To learn more, visit the Virginia General Assembly website.
Washington
A number of Washington state laws took effect June 11, 2026:
House Bill 2105 took effect June 11, 2026, with core employer compliance requirements effective Oct. 1, 2026. This law includes Form I-9 inspection notices, antiretaliation protections, limits on reverification practices and potential penalties for noncompliance.
House Bill 2345 changes how Paid Family and Medical Leave premiums are split between employers and employees.
House Bill 2479 updated how the state investigates and enforces unpaid wage complaints.
To learn more about these new laws, visit the Washington State Legislature website.
