Hello Clients and Friends,

Welcome to the Winter Edition of The Essential!

In this issue, among other topics, we discuss several alerts and changes that have occurred since the beginning of the year.  Some activities occur annually for some employers such as the EEO-1 Report and OSHA reporting. A reminder to California employers that Workplace Violence Prevention Plan training must also be completed annually.

Stay warm and we’ll be back with our next newsletter in the Spring!

Enjoy and be well,

Sonya L. Kemp-Willson
Founder and President

As we mentioned in the November 2025 edition of The Essential, the Division of Labor Standard Enforcement has made available the “California Workplace- Know Your Rights” notice in English and Spanish.

The notice should have been distributed to all current employees by February 1, 2026. The notice must be provided to new hires and annually to all employees. Additionally, employers have until March 30, 2026 to provide all current employees and new hires the opportunity to designate an emergency contact to be notified in the event the employee is arrested or detained while at work.

The 2026 H-1B cap season introduces a major shift: the transition from a purely random lottery to a wage-weighted selection system. Under this new rule, the higher the offered wage level, the higher the probability of selection.

The New Selection Math

Instead of a single entry, registrations are now granted multiple “weighted” entries based on the Department of Labor (DOL) wage level.
 

Key Updates & Requirements

• Data-Heavy Registration: Employers must now provide specific job details—including salary, SOC code, and work location—at the initial registration stage rather than waiting for the full petition.
• Compounded Master’s Advantage: The 20,000 U.S. Master’s exemption remains. Candidates with advanced degrees benefit twice: once from their wage-level weight and again by being entered into the secondary Master’s pool if they aren’t picked in the general lottery.
• Static Quota: The total number of available visas remains capped at 85,000.
• Timeline: Registration is expected to open in early March, with notifications sent by the end of the month.

Strategic Considerations

Note: While this rule is set to take effect February 27, 2026, it remains vulnerable to legal challenges. Litigation could potentially delay or block implementation.

1. Earlier Planning: Because wage levels and job codes must be locked in at registration, legal and HR teams need to coordinate months earlier than usual.
2. Wage Strategy: Compensation levels now directly correlate with immigration success. Entry-level roles are still eligible but face significantly steeper odds.
3. Job Data During Initial Registration: Choices made during the initial registration now directly influence the likelihood of selection.

Source: Ford Harrison
 

With layoffs rising in sectors like manufacturing and business services, navigating the Worker Adjustment and Retraining Notification (WARN) Act isn’t just a courtesy—it’s a legal minefield. One missing phone number in a notice can lead to litigation.

Here is a condensed, actionable 4-step plan to ensure your business remains compliant.

1. Determine if WARN Applies
The Act generally covers private businesses with more than 100 full-time employees. You must provide 60 days of advance written notice if any of the following occur within a 90-day window:

• Plant Closings: Impacting 50+ employees at a single site.
• Mass Layoffs: Impacting at least 33% of the workforce (minimum 50 people) at a single site.
• Large-Scale Layoffs: Impacting 500+ employees, regardless of percentage.

Note on “Part-Time”: For WARN purposes, employees are part-time if they work less than 20 hours per week or have been employed for less than 6 of the last 12 months preceding the notice date. They don’t count toward the 100-employee threshold.

2. Account for Remote Work & State Laws
Don’t assume federal law is the only hurdle.

• Check State “Mini-WARN” Laws: At least 18 states (including CA, NY, and OH) have stricter thresholds or different triggers than federal law.
• The Remote Factor: Remote workers are usually tied to the “site” from which work is assigned. Best practice: Calculate your numbers both with and without remote staff to see if you trigger notice requirements in either scenario.

3. Draft a Precise Notice
Federal law is incredibly specific. Your written notice to employees must include:

• Status: Whether the action is permanent or temporary, and if the entire facility is closing.
• Timeline: The specific date layoffs begin and the specific date the employee will be terminated (or a 14-day window).
• Bumping Rights: A statement on whether employees can displace others based on seniority.
• Contact Info: The name and phone number of a specific company official for questions.

4. Notify Authorities & Manage Culture
Compliance extends beyond your internal staff.

• Government Notice: You must notify the local chief elected official and the State Rapid Response Dislocated Worker Unit.
• Internal Messaging: Address the “remaining 80%.” Proactively explain the business rationale and demonstrate that exiting colleagues are being treated with respect. This maintains morale and trust for those staying behind.

Potential Exceptions: Notice periods may be shortened for “faltering companies” seeking capital, natural disasters, or unforeseen business circumstances—but these are interpreted narrowly by courts. When in doubt, provide as much notice as possible.

Source: Fisher Phillips
 

On January 5, 2026, the U.S. Department of Labor’s Wage and Hour Division released six opinion letters clarifying federal labor standards under the Fair Labor Standards Act (FLSA) and Family and Medical Leave Act (FMLA). These official interpretations respond to practical questions from employers, employees, and their representatives. Some of the opinion letters are discussed below illustrating key highlights:

Learned Professional Exemption (FLSA2026-1): The DOL confirmed that employers have complete discretion to treat employees as non-exempt even when they satisfy all three criteria for exemption: salary basis payment, minimum salary threshold, and primary duty requirements. Employers may designate such employees as non-exempt for business purposes, provided they pay minimum wage and overtime for hours exceeding 40 per week.

Non-Discretionary Bonuses (FLSA2026-2): Bonuses based on predetermined formulas must be factored into overtime calculations. A bonus is only “discretionary” when both the decision to pay and the amount are determined solely by the employer near period-end, without any prior commitment. For non-discretionary bonuses, employers must calculate the regular rate by dividing total straight-time earnings by total hours worked, then pay the additional half-time premium for overtime.

Commissioned Employee Exemption (FLSA2026-4): Retail or service employees are exempt from overtime if their regular rate exceeds 1.5 times the federal minimum wage ($10.875/hour) and commissions comprise over 50% of their compensation. This exemption relies on federal—not state or local—minimum wage standards. Tips generally don’t count as compensation for the 50% test unless an employer claims a tip credit.

FMLA Travel Time (FMLA2026-2): Employees may use FMLA leave for travel time directly to and from medical appointments for themselves or covered family members, provided they cannot perform job functions during treatment and travel. Stops for personal errands or unrelated activities are not protected.
Employers should consult employment counsel to review their classification systems, compensation structures, overtime calculations, and FMLA procedures in light of these clarifications.

Source: Goldberg Segalla
 

Companies should revise their policies to incorporate updated leave and break provisions. State governments continue to broaden protections for family, medical, sick, and lactation leave, as well as other job-protected absences and break periods, with multiple changes having already taken effect on January 1, 2026. Given the mounting complexity and state-by-state differences, employers need to examine their policies, payroll and benefits systems, supervisor training programs, and employee communications to confirm alignment with the legal requirements in each state where their workforce is located.

• Saturday, February 14 – Valentine’s Day
• Monday, February 16 – President’s Day
• Tuesday, February 17 – Lunar New Year | Ramadan (at sundown)
• Wednesday, February 18 – Ash Wednesday
• Sunday, March 8 – Daylight Savings Time Begins
• Tuesday, March 17 – St. Patrick’s Day
• Friday, March 20 – First Day of Spring
• Wednesday, April 1 – April Fools’ Day | Passover (at sundown)
• Friday, April 3 – Good Friday
• Wednesday, April 15 – Tax Day
• Wednesday, April 22 – Earth Day