The Latest – How HR Is Managing Enforcement Pressure, Leave Expansion, Benefits Transparency, and Leadership Risk

Jenny Kiesewetter is a practicing ERISA and employee benefits attorney who partners with HR teams on a wide range of workplace compliance matters — from benefit-plan obligations to day-to-day HR policies and regulatory requirements. Her guidance helps employers spot risks early, navigate regulatory change, and make informed decisions that support both employees and the organization.

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HR leaders head into 2026 with less margin for error. Agencies are enforcing existing rules more aggressively, courts are questioning how employers use technology, and workforce decisions are reaching employees and the public faster than ever. HR teams are fielding more questions and issues tied to benefits, leave programs, hiring, immigration compliance, and internal communications.

Below, we pulled together recent developments and where HR teams may need to make adjustments.

Effective date: Proposed rule published on January 30, 2026

The Department of Labor proposed regulatory changes that would give employers more visibility into how their pharmacy benefit managers price prescriptions and earn compensation.

The proposed rule makes employers responsible for understanding how their PBM prices drugs and earns compensation. Plan sponsors will need access to underlying pricing data and supporting documentation, rather than summaries or vendor assurances. Employers that do not have audit rights or data access in their PBM contracts may struggle to meet these expectations.

The Department of Labor will close the comment period on March 31, 2026 and expects to introduce the compliance requirements in stages once the final rule is issued.

HR Takeaway

HR should review the PBM contract and confirm which pricing and rebate information the employer can access today. Limits on visibility or audit rights create issues once new requirements take effect.

Effective dates: Ongoing; driven by state law expansion and workforce competition

In 2025, many employers added or expanded paid parental leave, caregiving leave, or other paid time off for family or medical needs. According to WTW’s 2025 Absence, Disability and Medical Leave Survey, 67% of employers said they made or planned these changes to improve the employee experience, and 60% cited attraction and retention as a key driver. At the same time, more states rolled out or adjusted their own paid leave programs, which made administration harder for employers operating in multiple locations.

Paid leave decisions now touch payroll taxes, state wage-replacement programs, disability benefits, and job-protection rules. Problems tend to show up when eligibility rules differ by state or when managers handle leave requests differently. Employers who separate paid leave from payroll and benefits processes often discover these issues later, after an employee raises a concern or an agency asks questions.

HR Takeaway

HR should pay attention to how paid leave rules differ by state and to how managers are making eligibility decisions. When those decisions vary, problems tend to surface later through payroll corrections or employee complaints.

Status: Lawsuit filed January 20, 2026; litigation ongoing

On January 20, 2026, plaintiffs filed what is being described as the first class action lawsuit challenging the use of automated tools in hiring and applicant screening. The suit centers on employers’ use of software to score and rank candidates and alleges that applicants were evaluated through reports and assessments without clear notice or an opportunity to review or correct the information used.

The case goes beyond discrimination theory and squarely raises Fair Credit Reporting Act (FCRA) issues, including whether these tools generate “consumer reports” and whether employers met notice, consent, and disclosure requirements before using them in hiring decisions.

The case puts a spotlight on how employers actually use automated hiring tools in everyday hiring decisions. Courts are looking at whether employers understood what the tools were producing, how scores or rankings were created, and whether anyone reviewed the results, rather than simply accepting a vendor’s description. Using software instead of people does not change who is responsible for the outcome.

HR Takeaway

HR should understand how automated hiring tools evaluate applicants and what information those tools generate. If software influences hiring decisions, employers remain responsible for compliance with existing employment and consumer protection laws, regardless of who built the technology.

Effective Date: Administration change January 20, 2025; continued activity through 2026

Since January 20, 2025, immigration enforcement and visa processing have tightened in ways that affect hiring and onboarding. Employers are seeing more worksite enforcement alongside stricter visa rules, higher fees, and longer processing times.

Recent actions include visa suspensions and revocations, expanded country-based restrictions — with additional countries added to the list on January 14, 2026 — and higher costs tied to employment-based visas, including a $100,000 fee connected to certain H-1B filings. Additional vetting and interview requirements have slowed processing across multiple visa categories. What once took weeks now often takes months, affecting start dates, transfers, and short-term business travel.

At the same time, enforcement activity has increased. Employers should expect continued Form I-9 audits and closer review of visa sponsorship practices. Even employers with solid hiring processes run into problems when verification steps vary by manager or records are handled inconsistently.

Immigration compliance has been a front-line HR issue for well over a year, and longer visa timelines now directly affect how quickly employers can bring talent on board.

HR Takeaway

HR should continue reviewing how Form I-9s are completed and stored and whether managers follow the same verification process in practice. With visa processing taking longer, hiring timelines and start dates are less predictable, and fixing issues early is far easier than dealing with them during an audit.

Effective Date: Layoffs announced January 2026

In January 2026, Amazon announced layoffs affecting about 16,000 corporate employees. On January 27, 2026, an internal calendar invitation labeled Project Dawn showed up in inboxes beyond the intended group. Some employees learned layoffs were coming from that invitation before the company shared any formal message.

The calendar entry included meeting titles and timing that raised immediate questions. Employees started talking among themselves, comparing what they had received and trying to figure out what it meant. As those conversations picked up, information spread quickly, both inside and outside the company.

By the time Amazon followed up with official communications, many employees had already pieced together their own understanding based on incomplete information, which made it harder to clarify the situation after the fact.

HR Takeaway

HR should stay involved in layoff communications and track how information is distributed. Once employees receive partial or early messages, timing and messaging are difficult to manage.

Effective date: Fiscal year 2026; budget released January 20, 2026

On January 20, 2026,the proposed Consolidated Appropriations Act, 2026 included $13.7 billion in funding for the Department of Labor for fiscal year 2026, an increase of $65 million over fiscal year 2025.

Key enforcement allocations affecting HR include:

• Wage and Hour Division: approximately $260 million, supporting investigations into overtime, misclassification, and minimum wage compliance
• Employee Benefits Security Administration: approximately $191 million, funding audits and enforcement tied to retirement and health plan compliance
• Occupational Safety and Health Administration: approximately $629 million, supporting inspections and enforcement activity

While some allocations remain flat year over year, the funding level sustains the Department’s audit and investigation capacity heading into 2026.

HR Takeaway

This funding keeps enforcement activity at full strength in 2026. HR should expect audits and investigations to continue at current levels across wage and hour, benefits, and safety. Ongoing attention to classifications, plan administration, and workplace practices will continue to require attention.

HR teams already manage benefits oversight, leave administration, hiring practices, immigration compliance, and workforce communications. What has changed is how closely those areas now connect and how quickly consequences follow.

Vendor contracts raise fiduciary questions. Hiring tools trigger consumer protection claims. Leave decisions collide with payroll, taxes, and state programs. Immigration delays affect start dates immediately. Internal workforce communications reach employees and the public within hours.

HR is doing the same work, but with less distance between process and outcome. That reality shapes how decisions get documented, coordinated, and carried out across the organization.

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