New Labor Laws from Q1 2026 That Could Affect Your Payroll Run

A Labor Compliance Roundup 

Here’s a brief update on the latest labor compliance laws, including state and local developments. This overview highlights key industry challenges and issues but is not legal advice. For questions or more information, contact us at compliance@castandcrew.com.  

State and Local Laws

California

• New requirements for California pay data reporting
  The California Civil Rights Department has released the final pay data reporting templates for the 2025 reporting year, along with an updated FAQ. The updated templates now include additional fields for reporting employees’ exempt/non-exempt classification, as well as full-time, part-time or intermittent employment status and the number of weeks worked during the reporting year. More here.

Illinois

• Illinois Unpaid Neonatal Intensive Care Leave Act, effective June 2026
  Effective June 1, 2026, eligible employees can take up to 20 days of unpaid leave under the Neonatal Intensive Care Leave Act for their child receiving neonatal intensive care. This leave is job-protected and is available to all employees, regardless of their service length or work status. More here.
• Amendments to the Transportation Benefits Act, effective January 2026
  As of January 1, 2026, HB 3094 revised the Transportation Benefits Act, which previously applied only to full-time workers, to broaden the eligibility criteria for pre-tax commuter benefits to include part-time workers. More here.

Maine

• Maine’s Paid Family and Medical Leave benefits, effective May 2026
  As of May 1, 2026, employees in Maine can apply for Paid Family and Medical Leave benefits including up to 12 weeks of paid leave each application year for various qualifying leaves such as medical, parental, family care, military family, or safe leave. Leave is job-protected for employees who have been employed for at least 120 days prior to their leave. More here.

New Jersey

• Updates to New Jersey Family leave Act, effective July 2026
  New Jersey has updated the Family Leave Act, expanding coverage and easing eligibility, among other changes. The changes will take effect on July 17, 2026. The law now broadly defines “family member” and grants job protection for employees taking leave for their own health while receiving Temporary Disability Insurance (TDI) and Family Leave Insurance (FLI). Employees will now also be allowed to choose which leave or benefit to use first, and employers are prohibited from requiring employees to exhaust their accrued sick leave before using state disability or family leave funds. Additionally, the eligibility criteria will change from the current requirement of 12 months of employment and 1,000 hours worked to just 3 months of employment and 250 hours worked in the last year. More here and here.

New York

• NYC Unpaid Safe and Sick Leave, effective February 2026
  New York City introduced amendments to the Earned Safe and Sick Time Act which took effect on February 22, 2026. One of the keys updates involves the introduction of 32 hours of unpaid leave available to eligible employees. The amendments also expand leave reasons to include schedule adjustments for caring for dependents or attending legal matters. Additionally, the Department of Consumer and Workers Protection has released a revised FAQ as well as published a new Notice of Employee Rights that employers must distribute. The FAQ can be found here, and the notice can be found here. 

Puerto Rico

• Puerto Rico Five-Day Emergency Leave, effective January 2026
  On January 27, 2026, Puerto Rico’s Governor Jennifer Gonzalez-Colon announced a public health emergency due to an increase in influenza casas, prompting special paid sick leave for non-exempt employees through executive order EO 2026-005, which will be effective until the situation improves. Employers are required to provide five days of paid sick leave to all impacted employees. Once employees run out of their sick leave, they may be eligible for an additional five days as needed. More here.