COMPLIANCE & EMPLOYMENT LAW
Federal and state employment law changes that affect hiring and workforce management covering EEO guidance, drug testing policy shifts, I-9/E-Verify updates, wage and hour developments, and fair chance legislation.
DOL Independent Contractor NPRM Published: Comment Period Open Through April 28
The U.S. Department of Labor published its Notice of Proposed Rulemaking on February 27, 2026, proposing to rescind the Biden administration's 2024 six-factor independent contractor test and replace it with a streamlined two-factor economic reality analysis focused on the worker's control over work and opportunity for profit or loss. The proposed rule also extends the same classification analysis to the Family and Medical Leave Act and the Migrant and Seasonal Agricultural Worker Protection Act for the first time. Public comments are due April 28, 2026, and the DOL estimates the change would save small businesses $2.31 billion over 10 years if finalized.
Source: U.S. Department of Labor | SEE FULL ARTICLE →
State-Level Compliance Wave Hits Pay Transparency, AI, and Paid Leave in 2026
Forty-eight states enacted new HR compliance requirements taking effect in 2026, spanning employee leave, artificial intelligence use in employment, background checks, wage and hour rules, and pay transparency, according to ADP's annual compliance review. Massachusetts, New Jersey, and Vermont all expanded pay transparency requirements in the past year, and new statewide paid sick leave laws took effect in Alaska, Missouri, and Nebraska. Employers with multi-state workforces are advised to treat compliance planning as an ongoing operational function rather than an annual review.
Source: ADP SPARK Blog | SEE FULL ARTICLE →
Hiring & Employment Fraud
Emerging and evolving fraud targeting employers; synthetic identity fraud, deepfake interview candidates, credential misrepresentation, and coordinated fraud schemes — drawn from law enforcement, fraud research, and industry data.
31% of Employers Have Interviewed Candidates Using a False Identity
A 2026 survey cited by Experian found that 31% of employers have interviewed candidates using a false identity, while only 19% feel confident in their ability to detect fraud during the hiring process. One in four companies reported losses exceeding $50,000 from fraudulent hires, and synthetic identity fraud accounted for $3.3 billion in losses in 2024 according to TransUnion data. Employers hiring remotely or through external agencies are identified as particularly vulnerable, as they may never conduct in-person verification.
Source: Experian Insights | SEE FULL ARTICLE →
North Korean IT Operatives Infiltrated 300+ U.S. Companies Using Synthetic Identities
The DOJ confirmed that over 300 American companies unknowingly hired North Korean IT operatives who used stolen identities, AI-generated personas, and real-time deepfake tools during video interviews, with proceeds funneled back to North Korea's sanctioned weapons programs. In June 2025 the DOJ announced coordinated enforcement actions including searches of 29 laptop farms across 16 states. The FBI subsequently updated guidance warning that once hired, some operatives conduct data exfiltration and deploy malware within corporate systems.
Source: Experian / FBI IC3 | SEE FULL ARTICLE →
Background Screening & Verification
Legislative and regulatory updates affecting how employers collect, use, and act on background check information including FCRA changes, Ban-the-Box laws, adverse action requirements, and identity fraud in hiring.
FCRA Federal Preemption Guidance Reshapes Multi-State Compliance
The CFPB issued an interpretive rule last October clarifying that the FCRA should generally preempt state laws addressing similar matters, reversing a 2022 interpretation that had narrowed federal preemption. The shift means employers and consumer reporting agencies operating in multiple states may rely more heavily on the federal FCRA framework rather than navigating a patchwork of state-level restrictions. Legal experts note that the CFPB's reduced enforcement appetite does not diminish the need for full statutory compliance.
Source: National Law Review | SEE FULL ARTICLE →
New York's Credit Check Ban Takes Effect April 18 for Most Employers
As of April 18, 2026, New York State prohibits employers, labor organizations, and employment agencies from requesting or using consumer credit history in most employment decisions. The law broadly defines credit history to include creditworthiness, credit standing, and payment history, and aligns third-party background screening vendors to the same restrictions placed on employers directly. Employers with New York operations should audit job applications, offer letters, and interview guidelines to remove financial credit-related inquiries before the effective date.
Source: DISA Global SolutionsA | SEE FULL ARTICLE →
FCRA Lawsuits Rose 37% Year-Over-Year in 2025 to Projected All-Time High
Federal court FCRA litigation increased 37.4% year-over-year in 2025, reaching a projected all-time high, according to data cited in recent legal reporting. Most cases stem from preventable process failures rather than intentional violations, including improper disclosure forms that combine FCRA notices with liability waivers and adverse action workflows that skip required steps. Employers with high-volume screening programs are particularly exposed to class action risk given that individual violations often apply to entire applicant populations.
Source: National Law Review / Cisive | SEE FULL ARTICLE →
Gig & Contingent Workforce
Regulatory and legal developments specific to non-traditional workforce arrangements, independent contractor classification rulings, platform liability, staffing agency regulations, and gig worker rights.
DOL Proposes Return to Two-Factor IC Test Favoring Independent Contractor Status
The DOL's February 2026 proposed rule would reinstate a framework similar to the Trump administration's 2021 rule, elevating control over work and opportunity for profit or loss as the two most probative factors in any classification analysis. Under the proposal, if both core factors point toward the same classification, there is a substantial likelihood that classification is accurate, reducing the ambiguity that characterized the 2024 six-factor test. The DOL also clarified that requiring a contractor to meet safety standards or carry insurance does not constitute evidence of employer control.
Source: Jackson Lewis / Mayer Brown | SEE FULL ARTICLE →
EU Platform Work Directive Implementation Deadline: December 2, 2026
All EU member states must implement the Platform Work Directive by December 2, 2026, granting full employment rights and benefits to millions of gig workers currently classified as independent contractors on digital platforms. The directive moves in the opposite direction from the U.S. DOL's proposed rule, reflecting a widening global divergence in how governments are treating platform and contingent work arrangements. U.S.-based gig and staffing companies with European operations should assess how the directive affects workforce structures in each member state.
SSource: SelfEmployed.com / SIA | SEE FULL ARTICLE →
