Compliance Round Up – Menopause Protections, Mini-WARN Expansion, and Equity Award Enforceability Updates Employers Need to Know – February 2026

Headshot of Jennifer Kieswetter
Written By
Jennifer Kiesewetter
Published On: February 24, 2026

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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February brought incremental changes, not sweeping reforms. A few areas saw temporary flexibility at the federal level, but states and courts continued layering on new requirements. For HR, that means more coordination, tighter documentation, and fewer assumptions that last year’s policies still hold up.

Federal News

Effective Date: Notice issued November 5, 2025; applies to 2025 reporting. Full enforcement expected for 2026

What’s Changing:

The IRS gave employers some breathing room in 2025 for reporting for cash tips and qualified overtime compensation under the new federal rules. The rationale was straightforward: guidance came out late, and payroll systems didn’t have much runway to adapt.

What the relief covers: penalties for incorrect reporting in 2025. What it doesn’t cover: the underlying obligation to report and withhold correctly. Employers still need to show real progress toward compliance. Think of this as a grace period on paperwork penalties, not a signal that the rules are going away.

What This Means for HR:

  • Audit your payroll coding, overtime classifications, and point-of-service (POS) integrations now, before the next reporting cycle.
  • Keep records showing the steps you’ve taken; good-faith documentation matters if questions come up later.
  • Keep your payroll vendors in the loop as you work through 2026 reporting.

Effective Date: Consent order finalized February 12, 2026

What’s Changing?

The Federal Trade Commission (FTC) wrapped up another enforcement action targeting no-hire and no-poach language buried in commercial agreements. Rather than pursuing sweeping rulemaking, the agency is going company by company, but the pattern is clear enough to take seriously.

Recent consent orders ban certain hiring restrictions and impose ongoing notice and compliance requirements. If your organization has vendor or customer contracts with restrictive hiring provisions, the FTC has signaled that those are fair game for scrutiny in 2026.

What This Means for HR:

  • Pull your vendor contracts and look for no-hire language, especially in agreements that are coming up for renewal.
  • Loop in procurement before signing or renewing service agreements.
  • Make sure your recruiting leads and senior leadership understand any contractual hiring restrictions that apply to them.

Trending State News

Effective Date: February 1, 2026

What’s Changing?

Colorado’s COMPS Order #40 took effect February 1 with several practical changes. The rules now reach a wider group of employers, and recordkeeping requirements for vacation and sick leave got more detailed. Local jurisdictions gained flexibility to adjust tip credits under recent statutory changes. Employers hiring minors face updated obligations under the Colorado Youth Employment Opportunity Act, and the method for calculating sick pay rates under the Healthy Families and Workplaces Act has been revised. The updated COMPS Order poster is also required. None of this is dramatic in isolation, but Colorado enforces the administrative side of wage compliance seriously — incomplete or inaccurate records are a liability here.

What This Means for HR:

  • Update your recordkeeping practices to capture what the expanded standards now require.
  • Check your leave rate calculations against the revised guidance.
  • Make sure youth employment practices (hours, documentation, permits) reflect the updated requirements.

Effective Date: Illinois – January 1, 2026; Philadelphia – January 1, 2027

What’s Changing: 

Two jurisdictions moved to formalize protections that weren’t previously on most employers’ radar. Illinois now requires certain health plans to cover medically necessary treatments for menopause. Philadelphia went a different direction, amending its anti-discrimination ordinance to explicitly name menopause, perimenopause, and menstruation-related conditions as protected categories.

In Philadelphia, that means reasonable accommodation obligations may apply when symptoms substantially affect an employee’s ability to do their job (absent undue hardship). Neither change is complicated, but employers operating across multiple states will need to track this kind of variation carefully. These menopause protections are part of a broader trend that isn’t slowing down.

What This Means for HR:

  • Verify that your Illinois health plans satisfy the new coverage mandate.
  • Revisit your accommodation process for Philadelphia-based employees.
  • Train managers on how to handle related requests consistently. Inconsistent responses are where liability tends to develop.

Effective Date: Amendments effective February 22, 2026; proposed rules issued January 22, 2026

What’s Changing: 

NYC’s ESSTA amendments do two notable things: they add protected leave categories and create a separate bank of 32 hours of unpaid protected time off available to employees immediately upon hire, with no accrual waiting period.

The proposed rules that followed add granular recordkeeping and pay-statement disclosure requirements on top of that. NYC has made clear that technical compliance (precise documentation, correct payroll display) matters just as much as having the right leave policies on paper. If your human resources information system (HRIS) isn’t set up to track leave by the required categories, that’s a gap worth closing soon.

What This Means for HR:

  • Review your leave bank structure and confirm payroll statements reflect what’s required.
  • Check that your HRIS can accurately track usage by protected leave type.
  • Brief supervisors on the expanded list of qualifying reasons. Gaps in manager knowledge tend to surface at the worst times.

Effective Date: September 29, 2025

What’s Changing: 

Ohio now has its own Worker Adjustment and Retraining Notification (WARN) statute. The state law mirrors the federal framework in broad strokes but adds Ohio-specific notice recipients and introduces some potential ambiguity around what triggers the requirement. If you’ve been treating federal WARN as sufficient for Ohio layoffs and closures, the rules have changed.

Ohio joining the growing list of states with their own WARN statutes means multi-jurisdiction reduction-in-force (RIF) planning just got more complicated. Federal compliance alone isn’t enough anymore.

What This Means for HR:

  • Add Ohio-specific WARN requirements to your RIF planning checklist — they’re not optional add-ons to the federal process.
  • Align notice timing and content to satisfy both state and federal requirements simultaneously.
  • Don’t let federal compliance be the finish line.

Around the Courts

Effective Date: Decision issued January 28, 2026

What’s Changing:

A recent Third Circuit ruling broadened the scope of Pennsylvania’s Criminal History Record Information Act (CHRIA) in employment decisions. The court held that CHRIA protections can apply even when an employer learns about a conviction through the applicant’s own disclosure, not just through a formal background check. The court focused on the type of information considered, not how it was obtained.

That reshapes how employers need to think about the entire hiring conversation. Recruiters and hiring managers asking about criminal history in conversations, even informally, may now be triggering CHRIA obligations without realizing it.

What This Means for HR:

  • Review your hiring scripts and interview guides for anything that invites disclosure of criminal history.
  • Confirm your adverse action process meets statutory requirements from start to finish.
  • Centralize how criminal history information is handled — ad hoc conversations are where compliance breaks down.

Effective Date: February 3, 2026

What’s Changing:

Delaware’s Supreme Court weighed in on a question that’s come up frequently as equity-based compensation has become more common: when is consideration for a restrictive covenant tied to an equity award evaluated? The court’s answer — at contract formation, not at the time you’re trying to enforce it.

Good news for employers structuring these agreements, but the ruling isn’t a green light. Courts will still scrutinize whether the covenant is reasonable and well-drafted. The decision narrows one avenue of challenge; it doesn’t close all of them.

What This Means for HR:

  • Review equity award agreements to confirm the restrictive covenant language is clear and internally consistent.
  • Make sure non-competes and related provisions are narrowly tailored. Broad language remains a liability.
  • Loop in compensation and legal before rolling out any updates to these agreements.

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