The U.S. Department of Homeland Security has finalized a regulation that will replace the existing random H-1B lottery with a weighted selection process.  These new regulations will become effective for the FY 2027 H-1B season and will take effect on February 27, 2026. This new system bases lottery entries on the wage level offered to H-1B candidates, thereby favoring higher-paid and higher-skilled workers while maintaining opportunities across all wage levels.

According to the Department of Labor’s four-tier Occupational Employment and Wage Statistics (OEWS) framework:

• Level IV wages: four lottery entries
• Level III wages: three entries
• Level II wages: two entries
• Level I wages: one entry

Lottery registrants are required to provide OEWS wage information during H-1B registration. Employers offering higher wages to H-1B candidates will notably increase their chances of selection. Subsequent petitions must include position details consistent with the initial registration, such as OEWS wage level, SOC code, and intended employment location(s). USCIS reserves the authority to deny or revoke petitions if subsequent filings diverge from the original registration details. While the new regulation does not mandate wage increases, it offers strong incentives for employers to raise salaries for H-1B applicants. USCIS aims to reduce abuse of the lottery system and strengthen protections for U.S. workers’ compensation and job prospects through these changes.

What Employers Need to Do Next:

Employers are encouraged to assess and review salary levels for H-1B positions in preparation for the lottery beginning in March 2026 and to consider making appropriate compensation adjustments as warranted.

PrestigePEO is here to help.  Please contact your HRBP with any questions.

President Trump has signed a new Executive Order (EO) directing the federal government to consider litigation and slash funding for states with strict AI regulations, especially those affecting employment. The EO aims to challenge state laws through potential legal action, restrict broadband funding and other discretionary grants for non-compliant states or to otherwise influence state related AI legislation, and potentially preempt state requirements via federal agencies like the Commerce Department, DOJ, FCC, and FTC.

Key provisions:

• The EO instructs federal agencies to identify and challenge “onerous” state AI laws.
• A DOJ AI Litigation Task Force will be created within 30 days to contest such state laws that are inconsistent with the EO.
• Within 90 days, agencies must publish AI affected laws and laws that should be referred to the DOJ’s task force, link BEAD (Broadband Equity Access and Deployment Program) broadband funding eligibility to AI regulation, and consider new federal standards that may override state laws.
• Colorado’s upcoming “algorithmic discrimination” law is specifically mentioned; California, New York City, Illinois, and Virginia’s AI laws are also likely targets.

Current state and local AI laws remain enforceable until they are blocked by courts or Congress passes a preemptive federal law. Employers should continue complying with all existing requirements and prepare internal inventories of AI systems, strengthen governance and documentation, and update vendor contracts. Legal challenges to the EO based on federalism, the Spending Clause, and agency authority are expected. Congressional action remains uncertain, and some carve-outs in the EO exclude child safety and critical infrastructure from preemption. Even if state AI laws are blocked, federal and state anti-discrimination statutes still apply to employers using AI.

In summary, employers are encouraged to maintain compliance with current state AI laws, monitor federal developments, pay particular attention to the upcoming timeframes, and reinforce internal processes as the legal landscape evolves.

PrestigePEO is here to help. Please contact your HRBP with any questions.

Federal courts are increasingly ruling that employees do not need to provide detailed or highly specific explanations when requesting religious accommodation. In the early stages of lawsuits, courts are allowing claims to proceed even when an employee’s description of how their belief relates to the workplace request is brief or informal. This means employers should not assume a request can be dismissed just because it lacks detailed religious language or documentation. Instead, the focus shifts to how the employer evaluated the request, whether it can later support its decision, and if accommodating the employee’s religious belief would cause substantially increased costs or other significant burdens.

This legal trend is especially important for employers with remote employees. Courts are closely scrutinizing workplace policies regarding remote employees. For example, employers will face a higher hurdle in showing that accommodating a religious vaccine exemption request creates a significant operational burden when an employee has no in-person contact with coworkers, clients, or the public, or it is not essential to the job. This aligns with themes discussed in our prior article, DOJ Recognizes Occasional Telework as a Religious Accommodation, which explained that even limited or situational remote work can qualify as a reasonable accommodation under Title VII and should be evaluated on an individual basis.

The legal standard employers must meet when denying religious accommodations has also shifted. As discussed in our earlier compliance article, EEOC Raises the Bar on Religious Accommodation Compliance, employers must now demonstrate that granting an accommodation would impose a substantial burden on business operations. Minor costs, administrative inconvenience, or speculative concerns are no longer sufficient. Courts and agencies expect employers to identify real, concrete impacts and to explain why alternative solutions were not feasible.

Overall, these developments send a clear compliance message. Religious accommodation requests should be reviewed carefully, documented thoroughly, and evaluated through a meaningful, interactive process aligned with prior decisions. This is particularly true for remote roles, where the business impact of accommodation may be more difficult to justify. Employers relying on blanket policies or informal decision-making face increased litigation and enforcement risks in today’s environment.

Multistate employers should review their accommodation policies, train managers on escalation and documentation procedures, and ensure decisions are consistent across the organization.

PrestigePEO is here to help. Please contact your HR Business Partner with any questions.

On December 10, 2025, the U.S. Department of Justice issued a final rule eliminating disparate impact liability from its Title VI enforcement regulations. As a result, organizations receiving federal financial assistance, including government entities, nonprofits, schools, and federal contractors, may no longer be subject to Title VI enforcement based solely on neutral policies that disproportionately affect a protected group. Under the revised rule, Title VI enforcement is limited to cases of intentional discrimination based on race, color, or national origin, although statistical evidence may still be used to support claims of discriminatory intent.

Earlier in 2025, President Donald Trump issued Executive Order 14281, Restoring Equality of Opportunity and Meritocracy, directing federal agencies to deprioritize enforcement of disparate impact liability under civil rights laws and to initiate rulemaking to remove this theory from agency regulations. The order instructs the Attorney General and the Equal Employment Opportunity Commission to review and align pending investigations, lawsuits, and agency guidance with the new policy and to amend or repeal regulations that contemplate disparate impact liability. While the executive order cannot change statutory or Supreme Court precedent, it has shaped current agency enforcement approaches and applies broadly to civil rights enforcement policy. Private Employers should note that disparate impact claims under Title VII and applicable state laws remain viable and continued monitoring of enforcement trends and state law developments is advisable.

PrestigePEO is here to help. For questions, please contact your HRBP.

The 11^th US Circuit Court of Appeals has again criticized the use of the McDonnell Douglass burden shifting approach to analyzing discrimination and retaliation claims and alternatively favored a “convincing mosaic” approach in its December 5, 2025, Ismael v Roundtree opinion. The 11^th Circuit believes that discrimination cases should be viewed from a totality of the circumstances approach rather than from the rigidity of the McDonnel Douglass framework. As the 11^th Circuit is a federal court, its rulings will hold some weight in relation to employment discrimination cases nationwide, but more specifically, for employers in Florida, Georgia, and Alabama, as those states comprise the 11^th Circuit.

What does this mean for Employers?

Ultimately, under a totality of the circumstances approach, an employer providing a legitimate business reason for adverse action taken against an employee bringing claims of discrimination will most likely no longer be sufficient to have a lawsuit dismissed at the summary judgment stage of proceedings; where under the McDonnel Douglass burden shifting approach, the same legitimate business reason may have been sufficient to have a lawsuit dismissed at the summary judgment stage of proceedings. This would then in turn lead to more cases going to trial.

What steps can Employers take to reduce risk?

While Employers strive to maintain discrimination free workplaces, employers should also preemptively take practical steps in the workplace to mitigate future risk. Those practical steps, include but are not limited to:

• Conducting workplace anti-discrimination and harassment training. Such training provides a baseline of what is and is not acceptable in the workplace and can be conducted at varying frequency throughout the year at the discretion of the employer.
• Reviewing employee handbooks, policies, and procedures and making necessary updates as needed. Employers can use their handbook as a way to maintain consistency in treatment of employees, to outline non-position related expectations of employees, and/or to outline procedures for discipline or investigations.
• Treating employees who are similarly situated consistently by following company policy and procedure uniformly.
• Documenting essential job functions for each role, (so employees have a clear understanding of the employers’ expectations. This provides the ability to objectively conduct performance tracking and provides a baseline for employee performance reviews.
• Conducting regularly scheduled performance reviews with employees as well as regular feedback. In doing so, the employee knows where they stand, what is expected of them, and what will occur if poor performance continues.

This is not a comprehensive list but are general factors courts may look to when conducting a totality of the circumstances review of a discrimination claim. Each of the above can be bolstered by the level of documentation maintained. Documentation includes, but is not limited to, performance notes, meeting notes, call notes, emails, internal messaging boards, internal instant messaging records, and investigation notes.

Key Takeaways

Consistency and documentation are key elements for employers in defending against claims of discrimination in the workplace and are key in supporting an assertion that there is a legitimate reason for adverse action taken against an employee.

PrestigePEO is here to help and can provide assistance with updating your employee handbook, assist in setting up training for your employees and managers, and can also provide investigation guidance. Please reach out to your HR Business Partner for more information.

As previously reported in the November California Employment Law Updates for 2026 article, the California Pay Data reporting deadline is slated for May 13, 2026.  The California Civil Rights Department (CRD) has released preliminary guidance, including significant changes to the reporting process.  Employers are encouraged to review and familiarize themselves with the initial guidance, outlined below for preparation purposes, although the final state requirements are still subject to change.

New reporting categories have been added to the existing race/ethnicity, sex, job category, and pay band requirements.  These new categories will be optional for this upcoming reporting cycle and include exemption status, employment type, and weeks worked. “Exemption status” refers to whether employees are classified as exempt or non-exempt for minimum wage and overtime purposes.  “Employment type” will require identification of each employee as either full-time, part-time, or intermittent.  Finally, “weeks worked” references total weeks worked during the reporting year, including all paid time off for sick or vacation type purposes.  Employers are encouraged to begin planning on how to capture this new information for future compliance purposes.

The CRD has also published tentative templates and a list of FAQ’s for Payroll Employee Reports and Labor Contractor Employee Reports, however official templates and necessary guidance will be formally released in February 2026 when the reporting portal reopens for the 2025 reporting cycle.

Additional changes to the California Pay Data reporting requirements now address penalties as mandatory, altering the previous allowance of penalties being “permitted” by the courts at the CRD’s request, indicating that courts will now be much stricter in the imposition of penalties for non-compliance on employers. Finally, as a reminder, effective January 1, 2027, the scope of job categories requiring reporting will expand from ten to twenty-three.

Next Steps for Employers:

• Update HR/payroll systems to record exemption status, employment type, and weeks worked.
• Coordinate early with labor contractors for required data.
• Check current data filters to ensure accurate reporting in new categories.
• Monitor CRD updates on templates and guidance expected to be released in February 2026.

PrestigePEO is here to help.  Please contact your HRBP with questions.

New York continues to expand worker protections through sweeping statutory changes that directly impact hiring practices, training agreements, and workplace decision-making. Between December 2025 and April 2026, several major employment laws either took effect immediately or are scheduled to take effect, significantly increasing compliance obligations and litigation exposure for employers operating in the state.

The Trapped at Work Act (New York Labor Law Article 37)

Effective Date: December 19, 2025 (effective immediately)

On December 19, 2025, Governor Kathy Hochul signed S.4070, known as the Trapped at Work Act, adding Article 37 (§§1050–1055) to the New York Labor Law. The law prohibits employers from requiring workers or prospective workers to execute “employment promissory notes” as a condition of employment.

An employment promissory note is defined broadly as any instrument, agreement, or contract provision that requires a worker to pay the employer money if the worker leaves employment before a stated period of time. The statute expressly includes agreements characterizing such payments as reimbursement for training provided by the employer or by a third party. Any such provision is deemed unconscionable, against public policy, unenforceable, and void.

The law applies to a wide range of individuals, including employees, independent contractors, interns, externs, apprentices, and volunteers. While the Act preserves limited exceptions—such as repayment of non-training advances, payment for property sold or leased to a worker, sabbatical agreements for educational personnel, and agreements entered pursuant to a collective bargaining program, employers should expect heightened scrutiny of repayment and claw back provisions tied to continued employment.

Employers found in violation may face civil penalties of $1,000 to $5,000 per violation, with each affected worker constituting a separate violation. Although the statute does not broadly create a private right of action, workers who successfully defend against enforcement of a void promissory note may recover attorneys’ fees.

Employer Action Steps

• Review offer letters, training agreements, retention agreements, and bonus repayment provisions.
• Eliminate provisions requiring repayment of training costs tied to length of employment.
• Train HR and recruiting teams on prohibited practices.

Statewide Restrictions on the Use of Consumer Credit History (S.3072)

Effective Date: April 18, 2026

In 2026, New York State will significantly restrict employers from requesting or using consumer credit history for employment purposes, expanding protections already in place in New York City.

The law defines consumer credit history broadly to include credit reports, credit scores, and information relating to credit accounts, bankruptcies, liens, or judgments. Except in limited circumstances, it will be an unlawful discriminatory practice for an employer to request or rely on this information when making hiring, compensation, or other employment decisions.

Narrow exemptions apply to specific roles, including positions where credit checks are required by law, law enforcement positions, certain high-trust appointed government roles, bonded positions, positions requiring security clearance, non-clerical roles with regular access to trade secrets or national security information, fiduciary positions with signatory authority over significant funds, and positions involving modification of digital security systems.

Employer Action Steps

• Audit background check practices and third-party screening vendors.
• Identify roles that may qualify for statutory exemptions.
• Update job descriptions and hiring documentation to reflect lawful justifications.
• Train hiring managers on prohibited inquiries.

Codification of Disparate Impact Discrimination Under the NYSHRL (S.8338)

Effective Date: December 19, 2025 (effective immediately)

Also on December 19, 2025, Governor Hochul signed S.8338, amending the New York State Human Rights Law to formally codify the disparate impact theory of discrimination.

Under the amendment, an unlawful discriminatory practice may be established based solely on a practice’s discriminatory effect, even if the employer lacked discriminatory intent. A practice has a discriminatory effect where it actually or predictably results in a disparate impact on a protected class.

Once a complainant establishes disparate impact, the burden shifts to the employer to prove the practice is job-related, consistent with business necessity, and supported by evidence. Even then, liability may still attach if a less discriminatory alternative exists.

Employer Action Steps

• Review neutral policies such as screening criteria, attendance rules, and performance metrics.
• Evaluate whether policies disproportionately affect protected groups.
• Document business necessity with evidence, not assumptions.
• Consult counsel before implementing new screening or selection practices.

Conclusion

These legislative developments reflect New York’s continued shift toward expansive worker protections and increased employer accountability. Employers should act proactively by reviewing agreements, policies, and decision-making processes now, particularly given that several of these laws are already in effect. Early compliance efforts will be critical to mitigating risk in New York’s increasingly employee-protective legal environment.

As always, PrestigePEO is here to help with any coverage questions and compliance needs. For questions regarding these new regulations or other matters, please contact your HRBP for assistance.

Pennsylvania is now among the states and local areas that have passed laws to end hair-based discrimination. In November 2025, Governor Josh Shapiro signed the state’s version of the Creating a Respectful and Open World for Natural Hair (CROWN) Act. This law will take effect on January 24, 2026.

The CROWN Act changes the Pennsylvania Human Relations Act (PHRA) to clearly ban discrimination based on natural hair texture and protective hairstyles linked to race, as well as head coverings and hairstyles tied to religious beliefs. Protected hairstyles include locs, braids, twists, coils, Bantu knots, afros, and extensions. The law also protects head coverings and hairstyles worn for religious reasons.

Although the PHRA already prohibited discrimination based on race and religion, the CROWN Act provides critical clarity by recognizing that such discrimination often manifests through grooming and appearance policies. By codifying these protections within the PHRA’s statutory definitions, the law confirms that adverse employment actions based on hair texture, protective hairstyles, or religious appearance constitute unlawful discrimination.

The CROWN Act does not impose an absolute ban on workplace grooming or appearance standards. Employers can still enforce health and safety rules or appearance standards if they are truly needed for the job. However, these exceptions are limited. To legally restrict hairstyles or head coverings linked to race or religion, an employer must show that it was adopted for non-discriminatory reasons, the requirement is specifically tailored to the position and activity at issue, and the policy is applied consistently to employees in comparable roles.

If employers do not meet all of these requirements, they could be held responsible under the PHRA.

Key Compliance Considerations for Employers

Employers in Pennsylvania should quickly review their dress codes, grooming rules, and appearance policies to make sure they follow the CROWN Act. Any policy that limits natural or protective hairstyles or religious head coverings without a clear safety reason should be changed. Employers should also train managers and HR staff on the new law and on avoiding bias or unfair enforcement.

Since the CROWN Act takes effect on January 24, 2026, Pennsylvania employers should update their workplace policies now to meet the new legal protections and support fair and inclusive practices.

As always, PrestigePEO is here to help with questions and compliance needs. For questions regarding these new regulations or other matters, please contact your HRBP for assistance.

On December 4, 2025, a Missouri state representative introduced legislation that would bar the enforcement of non-compete clauses in employment agreements for licensed physicians, if enacted. The proposal, HB 2184, is part of a broader national trend limiting restrictive covenants in healthcare and would explicitly render non-competes void for physicians licensed under Missouri Revised Statute Chapter 334 while leaving non-solicitation clauses intact. If enacted, the measure would take effect in August 2026 and apply to both existing and future agreements.

Employers with physician staff in Missouri should begin reviewing provider contracts to identify any non-compete provisions and evaluate other enforceable restrictive covenants. Although the bill must still pass the legislature and be signed by the governor, this development aligns with actions in other states to increase post-employment mobility for healthcare professionals and may influence how healthcare employers structure agreements going forward.

Prestige PEO is here to help and will continue to monitor the situation and provide updates.

On December 3^rd, Governor Mike DeWine of Ohio vetoed Senate Bill 50 (SB 50) that would have permitted children aged 14-15 to work until 9 p.m. on school nights rather than 7 p.m, with parental permission. The bill amended sections 3331.02 and 4109.07 of the Ohio Revised Code regarding age and schooling certificate requirements and work hours for a person under 16-years-old. Under current Ohio law, children are able to work until 9 p.m. on any school break longer than 5 days, such as winter or spring break, or over the summer. The legislation was pushed through with a party line vote as an attempt to help address Ohio’s workforce shortage and provide more working opportunities for minors.

Governor DeWine rebuked the position of the bill stating that, “[T]he only thing at issue here is whether, for 14- and 15-year-olds, DURING THE SCHOOL WEEK, the time when work must cease is 7 p.m. or 9 p.m.  I believe the current law has served us well and has effectively balanced the importance of 14- and 15-year-old children learning to work, with the importance of them having time to study.” Other proponents against the bill raised issues of violations of the Fair Labor Standards Act (FLSA), claiming the minimum wage paid to 14-15-year-olds is lower than the state minimum wage and that working hours past 7 p.m. are not permitted for that age group.

With the veto, SB 50 will return to both houses of the Ohio state government to see if legislators will be willing and able to secure 3/5^th majority of votes in both houses to override the veto. As the bill works its way back into the state houses, Ohio law will remain unchanged for children aged 14-15 which outlines that children of those ages cannot be employed:

• During school hours;
• Before 7 a.m. or after 7 p.m. during the regular school year;
• After 9 p.m. during summer break (from June 1st to September 1st) or during any school holiday of five school days or more;
• For more than eight hours in any day when school is not in session, or more than three hours on any school day; or
• For more than 40 hours in any week that school is not in session, or for more than 18 hours during any school week.

Additionally, Ohio law permits employers to pay minors ages 14-15 the federal minimum wage of $7.25 rather than the state minimum of $11.

As always, PrestigePEO is here to help with any compliance needs. For questions regarding these new regulations or other matters, please contact your HRBP for assistance.

The City of Columbus joins Cleveland, Cincinnati, and Toledo as the fourth city to enact its own wage transparency law, Columbus Ordinance 2898-2025 (the “Ordinance”). This Ordinance modifies Chapter 2335 of the Columbus City Codes to expand the chapter’s prohibition on salary history inquiries of applicants. The Ordinance went into effect on December 3, 2025; enforcement will begin January 1, 2027, giving time for employers to adapt their hiring and job posting processes.

Chapter 2335 of the Columbus City Codes now requires employers with fifteen (15) or more employees within the City of Columbus, including staffing agencies acting on behalf of another qualifying employer, to include a reasonable salary range or scale on external job postings; the requirement does extend to internally advertised positions, including internal promotions or transfers. Salary is defined as “a person’s financial compensation in exchange for labor, including but not limited to wages, commissions, hourly earnings, and other monetary earnings.” (Section 2335.01, Columbus City Codes.)

Section 2335.03 contains a non-exhaustive list of reasonable factors for employers to consider when making salary range determinations:

• The flexibility of the employer’s budget;
• The anticipated range of experience job applicants may have;
• The potential variation in the responsibilities of the position;
• The opportunities for growth in and beyond the position;
• The cost of living for the various locations in which an applicant may work; and
• Market research on comparable positions and salaries.

The complaint procedure allows for any applicant to file a complaint with the Community Relations Commission if they believe an employer has engaged or is engaging in violations of Section 2335.03 of the Columbus City Codes, pursuant to Section 2331.05. Employers found in violation may be subject to civil penalties.

PrestigePEO is here to help! If you have any questions regarding the new pay transparency law in Columbus, please reach out to your HR Business Partner.