A bill recently passed by the New York Legislature could significantly change how employers manage employee personnel records. If signed by Governor Hochul, the legislation would create new requirements for providing employees access to their personnel files, responding to record requests, documenting disciplinary actions, and retaining employment records after separation.

While many employers already maintain personnel files, most employers do not have a policy of making ALL personnel (or any personnel) information available as a matter of regular course. Instead, most companies decide, on a case by case basis, if and how much of personnel file information to make available to current and former employees.  Thus, this proposal would transform employee access from a per-company policy issue into a legal obligation—with strict deadlines and potential penalties for noncompliance.

What the Proposed Law Would Require

Under the legislation, employers would be required to provide current and former employees with copies of their personnel records within five business days of receiving a written request.

Records would need to be provided: 

• At no cost to the employee
• Within five business days
• For both current and former employees

The proposal also includes anti-retaliation protections for employees who exercise these rights.

What Counts as a Personnel Record?

The bill uses a broad definition of personnel records. Potentially covered documents include: employment applications, performance evaluations, disciplinary records, promotion documentation, compensation-related records and transfer and job history records.  In practical terms, many of the documents HR professionals rely upon when making employment decisions could become accessible to employees upon request.

A Major Change: Notice of Negative Information

Perhaps the most significant operational change is a new requirement that employers notify employees when negative information is added to their personnel file.

Under the proposal:

• Employees must be notified within 10 days
• Employees may submit a written response
• The employer must retain that response alongside the original record
• The response may need to accompany the record when it is later disclosed

This requirement would create a level of transparency that many employers do not currently maintain.

For organizations with decentralized management structures, ensuring timely notification could become a significant administrative challenge.

New Record Retention Requirements

The legislation would also require employers to maintain personnel records for at least three years after employment ends.

While many employers already retain records longer than this for litigation and compliance purposes, organizations without formal retention procedures may need to revisit their recordkeeping practices.

Why HR Leaders Should Pay Attention

If enacted, this law would impact much more than personnel files.

It would affect:

Documentation Practices

Managers and supervisors may need additional training on how performance concerns, coaching conversations, and disciplinary actions are documented.

HR Response Procedures

Organizations will need processes for receiving, tracking, and responding to personnel record requests within a short timeframe.

File Organization

Employers with paper files, decentralized records, or inconsistent documentation practices may face challenges locating records quickly enough to meet statutory deadlines.

Employee Relations

Because employees would gain easier access to personnel records, employers should expect greater scrutiny of evaluations, disciplinary records, and employment decisions.

Questions Employers Should Be Asking Now

Even before the bill becomes law, employers may benefit from evaluating:

• Where personnel records are currently stored
• Whether records are centralized and easily accessible
• How disciplinary information is documented
• Whether managers receive training on documentation standards
• Whether current retention policies are sufficient

Organizations that wait until the law takes effect may find themselves scrambling to create processes that should have been established months earlier.

Forework’s Perspective and Advantage

Workforce compliance increasingly depends on having organized, accessible, and accurate employee data.  Whether it’s payroll records, timekeeping information, personnel files, or performance documentation, employers are facing growing expectations for knowing what records to keep, maintaining such records completely, accurately and consistently, and having that information available for regulator review and inspection on short-notice. Forework provides all clients with an attorney-reviewed and approved record retention checklist, and ensures that all employers are maintaining the records required to be maintained by law, as well as those records where it is best practice to maintain.  The records are maintained digitally, where available, and employees may (depending on employer choice) have access to some or all of their personnel files in digital format. 

In early 2025, New York quietly added a new question to its WARN Act filing system: did AI or automation contribute to these layoffs? More than a year later, not one of the 160-plus companies that filed a notice has said yes.  That’s either genuinely good news — or a sign that the reporting system isn’t working the way it was intended.

How the disclosure works

Governor Hochul directed the state’s Department of Labor to start collecting this data in January 2025, with the change going live in March. When filing a WARN notice, employers now see a checkbox asking whether “technological innovation or automation” played a role in the layoffs. If checked, they’re asked to name the specific technology.

The problem is that New York’s WARN Act statute was never actually amended to require this — it was just added to the form. That leaves employers with real uncertainty: Is this mandatory? What counts as “technological innovation or automation”? Does AI need to be the sole cause of the layoffs, or just a contributing factor? Without answers, most employers are probably leaving the box unchecked regardless.

What might be coming

Two bills in the state legislature would go further:

One would require larger employers — those with 100 or more employees, or any publicly traded company — to submit annual reports to the state on how AI is affecting hiring, workforce reductions, and unfilled positions. It would also require disclosure of how AI is being overseen and how often it’s being used.

The other, called the “Automation Displacement Protection Act,” would require employers with 50 or more full-time employees to give advance notice any time AI or automated technology eliminates positions or cuts workforce hours by 25% or more over a 12-month period. Affected employees would be entitled to a 90-day transition period with either continued pay or access to retraining. Employers who don’t comply could lose eligibility for state grants, loans, and tax incentives for five years — and face civil penalties up to $10,000 per day for willful violations.

Neither bill is law yet, but the direction of travel is clear. New York has been at the front of AI-related workplace regulation, and other states are paying attention.

Employers — especially those operating in multiple states — should be monitoring these developments closely and thinking now about how they would track and report AI’s role in workforce decisions if required to do so.

FOREWORK BENEFIT: Federal and state WARN Act obligations are extremely tricky, even without a AI component.   Employers who are considering shutting down locations, departments, or conducting a mass layoff of employees form multiple branches and divisions should consul their designated Forework human resources representative.

The EEOC recently submitted a plan to the White House to eliminate annual employer reporting requirements — including the EEO-1 Report, which has been required since 1966. If finalized, the change would also scrap similar reports for local unions, state and local governments, and public schools.

Currently, private employers with 100 or more employees must submit race, ethnicity, sex, and job category data annually by location. Federal contractors with 50 or more employees have the same obligation.

The proposal follows pressure from within the administration to align EEOC practices with executive orders ending DEI programs and policies. Efforts in Congress to preserve the reporting requirement through appropriations language did not gain traction.

But none of this means employers should change anything yet. Here are three things to avoid doing right now:

1. Don’t assume EEO-1 reporting is off the table for 2026. The current regulation still requires employers to file by September 30 each year. The administrative process to formally rescind that requirement takes time — and it may not be complete before this fall’s deadline. Treat the obligation as fully in effect until you hear otherwise officially.

2. Don’t stop collecting employee demographic data. Even if the federal reporting requirement goes away, Title VII’s recordkeeping rules remain. Federal guidelines still require employers to maintain data showing whether their hiring and selection practices have a disparate impact based on race, ethnicity, or sex. Keep requesting that information at the time of hire.

3. Don’t overlook your state obligations. California and Illinois already have their own employer reporting requirements. Massachusetts currently ties its requirement directly to the EEO-1, so changes at the federal level could prompt changes there too. And if the federal requirement disappears entirely, more states may step in with their own rules. Employers contracting with state governments may also have separate affirmative action or reporting commitments that depend on demographic data.

We’ll continue to monitor the EEOC’s proposal and update you as the situation develops — particularly as the September 30 deadline gets closer.

FOREWORK BENEFIT:  Clients of Forework who need assistance gathering data and preparing the EEO-1 report can speak with their designated Forework counsel and HR representative about the annual report obligations. 

Federal agencies recently proposed a rule that would make it simpler for employers to offer fertility benefits outside of their main health plan — without running into compliance problems under the Affordable Care Act.

Here’s the quick backstory: Under the ACA, stand-alone benefit plans (ones not integrated with a major medical plan) generally have to meet a number of coverage requirements to be compliant. There’s an exception for what are called “excepted benefits” — a defined category that includes things like dental and vision coverage. The new proposal would add fertility benefits to that list.

What the proposed rule would require

For a fertility benefit to qualify as a new “limited excepted benefit,” it would need to meet four conditions:

1. It must be offered separately from the employer’s main group health plan, and employees must be able to decline the main plan and still enroll in the fertility benefit.
2. The benefit must be primarily for the diagnosis or treatment of infertility or related reproductive health conditions.
3. Lifetime coverage cannot exceed $120,000 per participant (adjusted over time for medical inflation).
4. Participants must receive a written notice describing the benefit — at enrollment, annually, and upon request.

On that last point: a general mention buried in a Summary Plan Description won’t cut it. The agencies specifically want the notice to be short and easy to understand.

A few things to keep in mind

The proposal appears aimed at employers who don’t currently cover fertility treatments under their major medical plan, giving them a new, structured way to do so. That said, elective fertility treatments — like egg freezing for someone without an infertility diagnosis — don’t appear to be covered under this proposal as written.

If finalized, the rule would apply to plan years beginning on or after January 1, 2027. Comments on the proposal are due by July 13, 2026.

THE FOREWORK BENEFIT:  Whether you’re thinking about adding fertility benefits for the first time or you already offer them and want to make sure your current structure holds up under the new framework, Forework members can use their monthly attorney hours to work through exactly these questions — plan design, notice requirements, compliance gaps, and more.

The Department of Labor recently proposed a rule that would create a single, consistent standard for determining joint employer status under three federal laws: the Fair Labor Standards Act, the Family and Medical Leave Act, and the Migrant and Seasonal Agricultural Worker Protection Act. For employers who use staffing agencies, share workers, or operate in franchise or contractor relationships, this proposal deserves a close read.

Why this matters in practice

Joint employment is one of those issues that catches employers off guard. A company brings on workers through a staffing agency, or a franchisor sets operational standards for its franchisees, and suddenly there’s a question about whether both entities are on the hook for wage-and-hour violations, overtime, or FMLA leave obligations. The consequences of a joint employment finding are real: back pay liability, civil penalties, and litigation costs that can run deep — often shared across entities that never expected to be in the same legal boat.

The DOL says the goal here is to reduce compliance and litigation costs, improve enforcement, and bring more uniformity to how courts analyze these relationships. That last point matters. Right now, the analysis varies significantly depending on the circuit you’re in, which creates real unpredictability for multistate employers.

Two types of joint employment — and they work differently

The proposal distinguishes between two structures, and understanding the difference is important.

Vertical joint employment is the more common scenario: a worker is employed by one business (often a staffing agency or subcontractor) but also performs work that benefits a second employer. Think of a manufacturer that contracts with a staffing firm to supply line workers. The test focuses on whether the second employer — the one that isn’t cutting the paycheck — has real influence over the employment relationship. The key factors are whether that employer can hire or fire, substantially supervises or controls the work schedule or conditions, determines pay rates, and maintains employment records.

The supervision factor tends to be the most contested in practice. Companies often believe that because they’re not formally managing someone, they’re in the clear. But if someone at the host company is the one directing daily work, setting hours, or deciding whether a worker comes back the next day, that functional control matters — regardless of what the contract says.

Horizontal joint employment is less intuitive. This is where a worker splits time between two separate employers that are sufficiently connected to each other — think two commonly owned businesses, or two franchisees that share staff. The question is whether those employers are “sufficiently associated” with respect to the worker. The rule points to three indicators: a formal arrangement to share the worker’s services, one employer acting in the interest of the other regarding the employee, or shared control arising from common ownership or control structures.

What won’t automatically create joint employment

One of the more practically useful parts of the proposal is what it says won’t establish joint employment on its own. Sharing a vendor, being co-franchisees of the same brand, requiring compliance with legal or quality control standards in a contract, offering shared benefit plans, or maintaining brand standards — none of these, standing alone, create a joint employer relationship.

This is significant for franchisors especially, who have spent years navigating the tension between maintaining brand consistency and avoiding joint employer exposure. The proposal doesn’t give franchisors a blank check, but it does acknowledge that routine business relationships aren’t enough.

The control question: reserved vs. actual

The proposal takes a clear position on one of the more nuanced questions in this area: it’s not enough that an employer could exercise control — what matters more is whether they actually did. A contractual right to approve staffing decisions that’s never been used carries less weight than a franchisor that regularly intervenes in day-to-day scheduling.

This distinction between reserved and exercised control is one that matters enormously when structuring these arrangements. Paper distinctions need to be backed up by how things actually operate on the ground — because that’s what investigators and courts look at.

What to do now

The comment period closes June 22, 2026. If you have concerns about how this rule could affect your business arrangements, this is the time to make your voice heard.

More importantly, if this rule is finalized, employers who want to maintain separate employer status should take a hard look at their current arrangements — staffing agency relationships, subcontracting structures, franchise operations, and shared-employee arrangements between affiliated entities. The goal is to understand where actual control is being exercised and, where necessary, restructure so the legal intent matches operational reality.

FOREWORK BENEFIT: If your business supervises, directs, or shares workers through a staffing agency, contractor arrangement, franchise structure, or affiliated entity, you should be thinking carefully about your joint employment exposure — and not just under the FLSA.  A joint employment finding can ripple into workers’ compensation coverage, paid leave obligations, benefits eligibility, and more. Talk to a Forework attorney or your designated HR representative to best understand any exposure your business might have under joint employment, and how to minimize any such legal exposure. 

Part 1 of Series, “Payroll Mistakes that turn into Class Actions”

A recent federal court decision out of Western Pennsylvania serves as a powerful reminder that wage and hour compliance failures—particularly those embedded in payroll practices—can expose employers to significant and expensive litigation. The case arose from a lawsuit filed by employees who claimed that they were not properly compensated for: 

• out-of-town travel time
• time spent in pre-shift safety meetings
• bonuses (because bonuses were not calculated or considered in the regular rate for overtime calculations)

While the decision reflects a careful application of class certification principles, the underlying claims highlight a more fundamental issue: many wage and hour violations are not the result of bad intent—but of flawed payroll and compensation systems design.

The Claims: Where Payroll and Compliance Intersect

On March 31, 2026, in Justin Lawrence, et al. v. Sun Energy Services LLC d/b/a Deep Well Services, the U.S. District Court for the Western District of Pennsylvania certified, but significantly narrowed, a Rule 23 class action and Fair Labor Standards Act (“FLSA”) collective action.  

The employees in the Lawrence case worked in oilfield operations, performing field-based services such as well servicing, snubbing, and other energy extraction support functions. These roles required workers to travel to remote job sites, often across state lines, stay overnight, and report to centralized locations for assignments. Their work was structured around shifts, with operational requirements that included travel, safety protocols, and coordination across crews—all of which created multiple categories of compensable and potentially compensable time.

Each of their claims in the lawsuit arose directly from how compensation policies are structured, interpreted, and ultimately operationalized in payroll systems.  After much back-and-forth in the lawsuit (and expensive litigation discovery), the federal court certified the class and collective action only as to the travel time and bonus claims.  The off-the clock claim did not proceed in the lawsuit because the court did not find a “uniform” policy or procedure in the employer’s business that would sustain a systemic claim (i.e., the class claim). But the travel and bonus claims were both tied to uniform employer practices, making them suitable for class-wide adjudication.

The Court’s Message: Uniform Practices Create Uniform Risk

The decision reinforces a critical point for employers: When compensation practices are applied uniformly—but incorrectly—they create scalable liability.  The court emphasized that differences in damages calculations do not defeat class certification where liability stems from a common policy.  In other words, once a flawed payroll rule is applied across a workforce, exposure can multiply quickly—regardless of variations in individual circumstances.

What Went Wrong—and What Could Have Been Prevented

From a compliance perspective, the issues in this case were not novel. They reflect recurring problem areas under the FLSA:

• Misclassification or exclusion of compensable travel time from consideration as work time – and if the employer does not consider specific travel time to be compensable worktime, then the employer will not pay for that time (resulting in minimum wage and overtime exposure)
• Failure to properly account for non-discretionary bonuses in overtime calculations  (employers cannot just pay employees a bonus without any consideration of its impact on the overtime calculation but that is exactly what happened in this case)
• Non payment of pre- and post-shift activities – activities mandated or accepted by the employer before or after a shift will often be considered compensable work time and need to be accounted for

The Missed Opportunity: Pre-Payroll Legal Structuring

What this case illustrates most clearly is not just litigation risk—but a missed opportunity.  Had the employer:

• Conducted a legal analysis of compensable time under the FLSA
• Properly structured its bonus programs to align with regular rate requirements
• Designed payroll rules to reflect compliant compensation logic

…it is likely that the certified claims—those based on uniform practices—could have been avoided altogether.

A Shift in Approach: From Reactive Defense to Proactive Design

Traditionally, employers address wage and hour compliance after problems arise—through audits, litigation defense, or reactive policy changes.  That approach is increasingly insufficient. Modern compliance requires a shift toward pre-payroll structuring, where legal analysis is embedded into the design of compensation systems before they are implemented.

How Forework Changes the Equation

Unlike traditional payroll providers, Forework integrates labor and employment law analysis directly into payroll setup, from day one.  This includes:

• Learning an employer’s systems and procedures, how its employees work, so as to ensure that all work time is being captured.  Because if the employer does not know that it must pay for XYZ time, then the employer will not pay a worker for that time, and the employer will be exposed to labor law claims 
• Structuring compensation policies to comply with FLSA requirements and local laws (state and city-specific wage compensation laws) 
• Designing payroll rules that properly capture compensable time, and that ensure this captured time is compensated
• Ensuring bonuses and other incentives are correctly incorporated into overtime calculations
• Identifying and resolving compliance risks before the first payroll is processed

Key Takeaways for Employers

This decision offers several practical lessons:

• Uniform payroll practices create class-wide exposure if they are not legally compliant
• Differences in damages will not shield employers from certification where liability is common
• Courts are closely scrutinizing compensation policies, not just high-level compliance statements
• Prevention—not defense—is the most effective strategy

Conclusion

The Lawrence decision is not just a procedural ruling, nor is it a novel case.  Class action litigation related to compensation practices and wage/hour errors are some of the most expensive lawsuits in the United States to litigate, and they are often not cases where employers win.  

Employers that rely on off-the-shelf payroll setups or operational shortcuts are increasingly vulnerable to wage and hour litigation. The cost of getting payroll wrong is no longer limited to back wages—it includes class certification, litigation expense, and reputational risk.

The better approach is clear: build compliance into payroll from the outset.

In a single day, Illinois Governor J.B. Pritzker signed more than 200 bills into law. Among them are over a dozen new or expanded employment-related requirements—many already effective and others rolling out through January 1, 2026. Illinois employers should begin preparing now for significant policy, compliance, and operational changes.

Two Newly Enacted Employment Laws

Workers’ Rights and Safety Act

Illinois has enacted new protections designed to “freeze” certain federal employee safeguards at their early-2025 levels. If future federal wage-and-hour or mining-safety laws are weakened, Illinois agencies must adopt state-level regulations that maintain the earlier, more protective standards. Agencies remain free to adopt even stronger employee protections and must report their actions to the Legislature.

Family Neonatal Intensive Care Leave Act

Beginning June 1, 2026, employers must provide job-protected, unpaid leave to employees who have newborn children receiving treatment in a neonatal intensive care unit (NICU).
Covered employees may take:

• Up to 10 days of NICU leave if the employer has 16–50 employees
• Up to 20 days of NICU leave if the employer has more than 50 employees

Leave may be taken intermittently in increments as small as two hours. NICU leave includes protections similar to those under the Family and Medical Leave Act (FMLA) and is in addition to any FMLA leave for eligible employees.

Key Amendments to Existing Employment Laws

Illinois Human Rights Act (IHRA)

For claims filed after January 1, 2026, fact-finding conferences will no longer be automatically required. The Illinois Department of Human Rights may hold them at its discretion or upon joint written request of both parties.
The Human Rights Commission also gains expanded authority to impose civil penalties “to vindicate the public interest,” with penalties ranging from $16,000 to over $70,000 per violation depending on employer history.

Workplace Transparency Act

Effective January 1, 2026, confidentiality provisions in employment, severance, and settlement agreements face tighter restrictions. Agreements may not prohibit employees from participating in “concerted activities” related to workplace concerns under the National Labor Relations Act (as it existed in early 2025).
Additional requirements include:

• Separate consideration for any confidentiality terms in separation or settlement agreements
• Prohibitions on non-Illinois choice of law or venue clauses
• Prohibitions on clauses shortening statutes of limitations

Wage Payment and Collection Act (WPCA)

Effective immediately and retroactively, unpaid final wage orders issued by the Illinois Department of Labor now become debts owed to the State if not paid within 35 days after the review period closes. This change streamlines enforcement, allowing the State to collect these amounts like other civil judgments.
Penalties and fees for unpaid wage orders have also increased.

Military Leave Act

The former Family Military Leave Act has been renamed and expanded. Employers with 51 or more employees must now provide up to eight hours of paid leave per month (maximum 40 hours annually) for employees who perform military funeral honors duties.

Nursing Mothers in the Workplace Act

All lactation breaks must now be paid for up to one year after childbirth. Employers may not require employees to use paid leave or experience any pay reduction for reasonable lactation breaks. Employers may still require these breaks to run concurrently with existing break periods.

Equal Pay Act

Coverage under the Illinois Equal Pay Act now extends to all employers with 100 or more employees working in or reporting to Illinois, regardless of federal EEO-1 filing status.

Victims’ Economic Safety and Security Act (VESSA)

Employees (or family members) who record incidents of violence using employer-issued devices must be granted access to the images or documentation. Employers may not take adverse action based solely on the device containing evidence of a domestic, sexual, gender-based, or other violent incident.
Employers may still enforce reasonable device-use policies and comply with investigations or court orders involving device content.

Additional Changes Affecting Employees

Other amendments expand rights for employees in areas such as:

• Eligibility for unemployment if leaving a job due to a mental health disability
• Pre-tax commuter benefit eligibility for part-time employees
• Paid leave rights for part-time organ donors
• Military differential compensation for any missed shift, regardless of length or schedule

Industry-Specific Updates

Industries facing targeted amendments include:

• Public works construction: Expanded Prevailing Wage Act coverage, enforcement tools, and penalties
• Gaming: Updated occupational licensing, background check, and identification badge requirements
• Child care: Enhanced criminal background check rules for child care workers

What’s Ahead

The Illinois Legislature continues to consider additional employment measures, including potential restrictions—or complete bans—on non-compete and non-solicitation agreements. Employers are also awaiting final Department of Labor rules interpreting the amended Day and Temporary Labor Services Act, which will further shape compliance obligations.

What Employers Should Do Now

Illinois employers are encouraged to:

• Review and update policies, handbooks, and employment agreements
• Revise confidentiality, separation, and severance agreement templates
• Prepare for expanded leave rights and paid-break requirements
• Adjust compliance systems, including payroll and timekeeping, to reflect new mandates
• Reassess AI-related employment practices, especially in anticipation of January 1, 2026 changes

Forework will continue monitoring legislative and regulatory developments to help employers stay compliant and minimize risk.

The Massachusetts Department of Family and Medical Leave has released two major updates affecting Paid Family and Medical Leave (PFML) benefits and contributions beginning in 2026. Employers must review these changes now to ensure compliance ahead of the January 1, 2026 effective date.

New Guidance on Tax Treatment of PFML Benefits and Contributions

The Department issued a memorandum clarifying how PFML benefits and contributions should be treated for federal tax purposes. The guidance reflects recent IRS rulings addressing state-administered paid family and medical leave programs. Notably, the memorandum does not address private or self-insured PFML plans.

Family leave PFML benefit payments are considered taxable income but are not wages for employment tax purposes. These payments will be reported by the Department on Form 1099-G, and employers will not have additional reporting or withholding responsibilities.

Medical leave PFML benefits have a more complex structure. For employers with 25 or more employees, Massachusetts requires the employer to cover 60% of the medical leave PFML contribution. As a result:

• Sixty percent of an employee’s PFML medical leave benefit is treated as taxable wages subject to income tax and employment taxes and must be reported on the employee’s W-2.
• The remaining forty percent is not taxable and does not need to be reported on a W-2.

Beginning January 1, 2026, the Department will withhold the employee share of FICA on the taxable portion of PFML medical leave benefits. Employers with 25 or more employees will be responsible for the employer portion of FICA and FUTA taxes on these taxable benefits. The Department will transmit benefit and withholding information through the Employer Portal.

Employers with fewer than 25 employees do not fund the employer share of medical PFML contributions. Therefore, medical leave PFML benefits paid to employees of these smaller employers are not taxable and do not create additional employer reporting obligations.

The memorandum also outlines tax rules for PFML contributions. All employers must treat employee PFML contributions as taxable wages for W-2 reporting. If an employer voluntarily pays the employee’s required PFML contribution, that payment is also treated as taxable wages. Required employer PFML contributions are not considered wages.

Although the IRS ruling is currently in effect, calendar year 2025 is considered a transition period. Employers will not be penalized for failing to follow the new rules for PFML benefits paid in 2025, but full compliance is required starting January 1, 2026.

It is essential for employers to maintain access to the Department’s Employer Portal to retrieve taxable benefit information and ensure accurate W-2 reporting.

2026 PFML Contribution Rates and Maximum Benefit Amount

The Department has announced the PFML contribution rates and maximum weekly benefit amounts for 2026.

Effective January 1, 2026, the maximum weekly PFML benefit increases to $1,230.39, up from $1,170.64 in 2025.

PFML contribution rates for 2026 remain unchanged:

• Employers with 25 or more employees:
  • Family leave contribution: .18%
  • Medical leave contribution: .70%
  • Total: .88%
• Employers with fewer than 25 employees:
  • Family leave contribution: .18%
  • Medical leave contribution: .28%
  • Total: .46%

Employers with approved private or self-insured PFML plans remain exempt from submitting contributions to the state but must update their plans to reflect the new 2026 maximum benefit amount.

Employers are also required to:

• Display the updated PFML workplace poster
• Issue 2026 rate sheets to all current employees
• Provide PFML rights-and-obligations notices to new employees within 30 days of their start date

Updated posters, rate sheets, and employee notices—including versions for employers with fewer than 25 employees—are available on the Department’s website in multiple languages.

As we enter the busy holiday season, employers face an annual question: what are your obligations when it comes to paying employees for holidays? The U.S. Department of Labor (DOL) provides clear guidance under the Fair Labor Standards Act (FLSA), but many businesses still get tripped up—leading to avoidable wage claims, audits, and litigation.

Below is an overview of the federal rules you need to know as you prepare your end-of-year schedules.

No Federal Right to Paid Holidays (For Most Employees)

Under the FLSA, hourly and non-exempt employees have no legal right to be paid for holidays they do not work. Paid holidays—such as Christmas Day, Thanksgiving, or New Year’s Day—are considered a voluntary employer benefit unless a union agreement, employment contract, or company policy requires paid time off.

Exception: Salaried Exempt Employees

For overtime-exempt salaried employees, employers generally must pay their full weekly salary if the business is closed for a holiday and the employee works any portion of that workweek. Failing to do so risks undermining the employee’s exempt status.

If Non-Exempt Employees Work on a Holiday: No Required Premium Pay

The FLSA imposes only one baseline obligation when non-exempt employees work on a holiday: they must be paid at least the applicable minimum wage for all hours worked.

Beyond that requirement, there is no federal mandate to pay premium or bonus rates for holiday shifts. Extra compensation is optional unless required by policy or collective bargaining.

Important Note About Premium Rates Below 1.5x

For overtime-eligible employees, holiday premiums can affect overtime calculations.

If an employer pays a premium that is less than 1.5 times the employee’s regular rate—for example, an additional two dollars per hour, or a premium of 1.25x or 1.3x—that additional amount must be included in the employee’s regular rate when calculating overtime. These payments increase the regular rate and therefore can increase the overtime rate owed for that workweek.

Only premium payments at 1.5x or higher are excludable from the regular rate.

These rules apply only to overtime-eligible (non-exempt) employees.

Holiday Premium Pay and Its Effect on Overtime Calculations

Under DOL regulations (29 CFR Part 778), premium pay of 1.5x or more for holiday work may be excluded from the regular rate for overtime purposes.

Premiums at 1.5x or higher do not increase overtime liability. Premiums below 1.5x must be factored into the regular rate and can increase overtime costs. These regular-rate rules apply only to non-exempt employees who are eligible for overtime under the FLSA.

Understanding this distinction is critical during the holiday season when schedules fluctuate and employees work irregular hours.

How Forework Protects Your Company During the Holiday SeasonAt Forework, our payroll rules for holidays are pre-configured to comply with federal labor laws, including the correct treatment of holiday premiums, inclusion or exclusion of premium payments from the regular rate, proper handling of exempt salary obligations, accurate overtime calculations, and state-specific holiday rules where required.

Our system ensures employees are paid correctly, employers remain compliant, regular-rate errors are avoided, and businesses minimize legal exposure and reduce the risk of costly lawsuits.

Forework exists to help employers navigate the complexities of wage-and-hour laws with confidence—especially during the most compliance-heavy time of the year.

New York State is officially moving forward with the rollout of the New York State Secure Choice Savings Plan, a state-facilitated Roth IRA program for private-sector workers who do not have access to an employer-sponsored retirement plan. After several years of delay, employer registration is now open, and beginning in March 2026, employers will be required to either register for the Program or certify that they are exempt.

The statewide rollout includes detailed deadlines tied to employer headcount. Businesses should begin preparing now for compliance, data gathering, and payroll adjustments.

Which Employers Are Covered?

An employer is required to participate in New York Secure Choice if it meets all of the following (a) Has been in business for at least two years, (b) Employed 10 or more employees in New York during the previous calendar year, and (c) Does not offer employees a qualified retirement plan (such as a 401(k), SIMPLE IRA, or SEP).  Employers that offer a qualified plan are exempt but must certify their exemption to the Secure Choice Savings Program Board.

There are no fees for employers to participate. However, enrolled employees will be charged a $28 annual account fee, plus an investment-based fee ranging from 0.22% to 0.31%.

Key Registration and Certification Deadlines

Employers must register or certify their exemption based on their New York headcount. The registration deadlines are:

– March 18, 2026: Employers with 30 or more employees
– May 15, 2026: Employers with 15 to 29 employees
– July 15, 2026: Employers with 10 to 14 employees

All covered employers must take action by their applicable deadline.

What Covered Employers Must Do

Covered employers must complete several compliance steps once required to participate:

1. Provide program information, disclosures, and instructions.
2. Manage enrollment by collecting employee elections or opt-out forms.
3. Automatically enroll employees who do not respond within 30 days at the default 3% Roth IRA payroll deduction rate.
4. Withhold after-tax Roth IRA contributions and remit them to the state-designated provider.
5. Ensure payroll accuracy and remittance compliance.

Employers are not allowed to make employer contributions or matching contributions to Secure Choice IRAs.

Employee Enrollment Rules

All employees aged 18 or older who earn taxable wages from a participating New York employer must be enrolled unless they opt out. Employees have 30 days after enrollment to select a different contribution percentage, change investment selections, or opt out entirely. Employees who do nothing will be automatically enrolled at 3% of gross income. Employers are responsible for accurate withholding and remittance.

Investment Options and Vendor Selection

New York State has pre-selected the program administrator and investment menu. Participants will choose from four state-approved funds or remain in the default investment option. Employers have no role in plan design, investments, or vendor selection.

Should Employers Consider Offering Their Own Retirement Plan Instead?

Secure Choice is intended as a baseline compliance option, not a comprehensive retirement benefit. Employers may want to evaluate whether adopting their own qualified retirement plan offers more flexibility and value.

A private plan allows employers to choose plan design, eligibility, vesting schedules, matching contributions, and investments, and it exempts them from Secure Choice entirely. Employers should also consider that lower-income employees who do not opt out may see reduced take-home pay.

What Employers Should Do NowEmployers should begin preparing now by:

– Determining whether they are covered by the mandate
– Reviewing whether an existing plan qualifies them for exemption
– Considering whether adopting a 401(k) or SIMPLE IRA before the compliance deadline is preferable
– Gathering data required for registration
– Verifying payroll provider capabilities for withholding and remittance

Forework will continue monitoring implementation developments and will ensure payroll logic supports auto-enrollment, deduction tracking, contribution remittance, and employee opt-out processing.