The Latest – Student Visa Time Caps, Agency Penalty Showdown at SCOTUS, Overtime Rule Rollback, And TrumpIRA Launch (May 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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Federal action on multiple fronts is reshaping HR planning this month. The Department of Homeland Security moved its student visa overhaul into final review. The Supreme Court agreed to hear a case that could reshape how every federal agency collects penalties from employers. The Department of Labor dropped its defense of the Biden-era overtime salary rule, locking the threshold at its 2019 level. A presidential executive order is launching a new federal retirement portal that could change how state-mandated savings programs operate. And a federal court paused a major state AI employment law just weeks before it would have taken effect.

Each of these developments arrived with little lead time, and several are already affecting day-to-day HR operations. Here is what you need on your radar right now.

Effective Date: Draft final rule transmitted to OIRA on May 5, 2026

What’s Changing:

On May 5, 2026, U.S. Immigration and Customs Enforcement transmitted a draft final rule to the Office of Information and Regulatory Affairs (OIRA), the last step before final publication. The rule, titled “Establishing a Fixed Time Period of Admission and an Extension of Stay Procedure for Nonimmigrant Academic Students, Exchange Visitors, and Representatives of Foreign Information Media,” would replace the long-standing “duration of status” framework with a fixed admission period.

Under the current system, F-1 students, J-1 exchange visitors, and I-category foreign media representatives can stay for the length of their program. The proposed rule would tie admission periods to the program end date listed on Form I-20 (for F-1 students) or Form DS-2019 (for J-1 exchange visitors), with a four-year cap regardless of program length. Anyone needing additional time would have to file Form I-539, submit biometrics, and document continued program progress.

The rule would also cut the F-1 post-completion grace period from 60 days to 30 days. That is the window in which graduates transition into Optional Practical Training (OPT), depart the country, or change status. A shorter grace period gives employers and graduates less room to complete OPT paperwork before status concerns arise. OIRA may clear the rule for publication as early as this summer.

HR Takeaway

Employers who hire foreign students through OPT or STEM OPT face a tighter compliance window once the rule takes effect.

• Audit your foreign-national workforce now to identify F-1 or J-1 workers whose program end dates fall within the next two years.
• Track Form I-94 expiration dates and document each employee’s status pathway.
• Coordinate with immigration counsel on Form I-539 extension filings before grace periods shrink.

Effective Date: Certiorari granted in spring 2026 in Sun Valley Orchards v. U.S. Department of Labor; argument and decision expected during the Supreme Court’s October 2026 term

What’s Changing:

The U.S. Supreme Court accepted Department of Labor v. Sun Valley Orchards, LLC, a case that asks whether federal agencies can collect monetary penalties through their own administrative law judges and review boards instead of through Article III federal courts.

The case began when the Department of Labor levied more than $500,000 in penalties against a New Jersey family farm for alleged violations of the H-2A temporary agricultural worker program. The Department pursued the penalties through its in-house Administrative Review Board process. The U.S. Court of Appeals for the Third Circuit held that the procedure violated Article III of the U.S. Constitution, which requires Article III judges, not agency employees, to decide “private rights” disputes.

If the Supreme Court affirms the ruling, the decision could reach far beyond the H-2A program. The Equal Employment Opportunity Commission (EEOC), the Occupational Safety and Health Administration (OSHA), the National Labor Relations Board (NLRB), and several wage-and-hour and benefits enforcement agencies rely on in-house administrative penalty processes. A broad ruling could force major changes to how those agencies pursue civil fines and back pay.

HR Takeaway

Employers already dealing with agency investigations or enforcement actions should talk with counsel about whether to raise and preserve constitutional arguments as part of the case record.

• Treat any agency penalty or enforcement matter as something the Supreme Court’s ruling could affect.
• Keep an eye on this case, along with recent Supreme Court decisions that are reshaping how federal agencies enforce workplace laws.
• Maintain organized records and timelines for any ongoing enforcement matters in case the legal rules change during the process.

Effective Date: Appeal dropped during the week of May 5, 2026; the 2019 salary basis threshold of $35,568 remains in effect

What’s Changing:

The U.S. Department of Labor dropped its appeal of the 2024 Biden-era overtime regulation in early May 2026. That rule would have raised the Fair Labor Standards Act (FLSA) minimum salary threshold for the white-collar exemption to $58,656 per year beginning January 1, 2025. Two Texas federal district courts vacated the rule in late 2024. The Biden administration appealed, and the Trump administration later held the appeal while deciding how to proceed.

The Department’s withdrawal leaves the 2019 regulation in place. The salary basis threshold for executive, administrative, and professional exemptions remains $35,568 per year, or $684 per week. The Department’s most recent regulatory agenda, released in September 2025, lists potential FLSA overtime changes as a “long-term action,” meaning a new federal threshold is unlikely before 2027 at the earliest.

Several states, including California, New York, Washington, and Colorado, set white-collar exemption thresholds well above the federal floor. Employers still must apply those state rules to employees working in those jurisdictions, even though the federal threshold remains lower.

HR Takeaway

Employers who pre-adjusted exempt salaries upward in anticipation of the $58,656 threshold can reassess, but they should not roll back without careful analysis.

• Confirm exempt-position salaries against the state minimum where each employee works, not only the federal floor.
• Document the duties test for each exempt classification. The salary level is one part of the test; the actual job duties are the other.
• Reclassification carries morale and retention risks. Talk with employment counsel before changing any salary or exemption status.

Effective Date: Signed April 30, 2026; Treasury implementation timeline forthcoming

What’s Changing:

On April 30, 2026, President Trump signed an executive order directing the Department of the Treasury to establish a new federal website, TrumpIRA.gov. The site would allow workers without access to an employer-sponsored retirement plan to compare investment options and enroll in retirement accounts directly through the federal portal.

According to the Executive Order, tens of millions of U.S. private-sector workers lack access to workplace retirement plans. Additionally, several states already responded with their own mandates, including programs in California, Colorado, Connecticut, Illinois, Maryland, New York, Oregon, and Virginia. Most of these state programs require private employers without a qualifying plan to register and facilitate payroll deductions into a state-administered Roth IRA.

The executive order does not address how TrumpIRA.gov will interact with those state mandates. The order also does not change Employee Retirement Income Security Act (ERISA) obligations, employer plan responsibilities, or existing fiduciary duties. For now, employers should treat the TrumpIRA initiative as an emerging policy development, not an immediate compliance requirement.

HR Takeaway

Employers covered by state retirement savings mandates should monitor whether TrumpIRA.gov enrollment will satisfy state registration obligations.

• Existing 401(k), 403(b), SIMPLE IRA, and SEP IRA plans continue to govern employer obligations. The executive order does not change that.
• Watch for Treasury guidance on whether and how employer-facilitated TrumpIRA contributions might work in practice.
• Be ready to answer employee questions about TrumpIRA accounts once the portal launches.

Effective Date: Originally scheduled for June 30, 2026; temporarily blocked by a federal court in spring 2026

What’s Changing:

A federal court issued a temporary order in spring 2026 that paused enforcement of Colorado’s artificial intelligence law, originally set to take effect June 30, 2026. The law, enacted in 2024, would require developers and deployers of “high-risk” artificial intelligence systems, including hiring and promotion tools, to use reasonable care to protect Colorado residents from algorithmic discrimination, document risk assessments, and provide notice and explanation rights to consumers.

The order does not strike the law down. It temporarily pauses enforcement while litigation proceeds, and the law could still take effect if the court lifts the block before June 30. Colorado employers and any out-of-state employer with Colorado-based applicants or workers had spent the past year preparing for compliance. Many had built vendor questionnaires, bias-testing protocols, and notice templates.

The pause does not relieve employers of obligations under other AI laws. California’s Automated Decision-Making Technology regulations under the Consumer Privacy Act took effect January 1, 2026, and require risk assessments, advance notice, and opt-out rights for employees subject to significant automated employment decisions. New York City’s bias audit law (Local Law 144) and Illinois’s Artificial Intelligence Video Interview Act remain in force, and the EEOC continues to enforce existing civil rights laws against discriminatory algorithmic outcomes.

HR Takeaway

Keep your compliance work for the Colorado law in place. The block is temporary, and a final ruling could reinstate the June 30 deadline or push it to a later date.

• Continue bias-testing and documentation practices for any AI tool used in hiring, promotion, scheduling, or performance evaluation.
• Map every state and local AI employment law that applies to your workforce and treat them as a moving compliance set.
• Build vendor contract language that requires AI providers to support audit, bias-testing, and notice obligations regardless of which state law applies.

Effective Date: January 1, 2026; plans have an administrative transition period through 2026 to operationalize

What’s Changing:

A SECURE 2.0 Act provision that has been on the horizon since late 2022 is now in effect: high-earning employees age 50 and older must make any catch-up contributions to their employer-sponsored retirement plan on a Roth (after-tax) basis. The rule applies to participants who earned more than $145,000 in FICA wages from their current employer in the prior year, with the threshold indexed for inflation.

In practical terms, a worker who earned $150,000 in 2025 wages (indexed) and is age 50 or older this year can still make catch-up contributions to a 401(k) or 403(b) plan, but those contributions must go into a Roth account. The participant pays income tax on the contribution now rather than at withdrawal. Catch-up contributions made by lower earners and by participants under age 50 are unaffected.

The IRS issued final regulations in 2025, indexing the threshold to $150,000 for 2026. Plans have a good faith transition through 2026. As a result, many plan sponsors are still finalizing payroll system updates, plan document amendments, and participant communications, even though the rule is technically in effect. Plans that do not offer a Roth feature face a harder choice: add a Roth option to accept catch-up contributions from high earners, or stop offering catch-up contributions to those employees altogether.

HR Takeaway

Benefits teams should confirm with their plan recordkeeper that the Roth catch-up logic is in place and that the wage threshold is being applied correctly.

• Identify employees who hit the $150,000 prior-year FICA wage threshold and confirm their 2026 catch-up contributions route to Roth.
• If your plan does not offer a Roth feature, consult ERISA counsel now if you’d like to add this feature. A plan amendment and recordkeeper change typically takes months to implement.
• Update participant communications and enrollment materials so high-earning employees understand why their catch-up contributions are now after-tax.

May 2026 is shaping up as one of the busier policy months of the year. Federal agencies are pulling back from some Biden-era rules and pushing forward on others. The Supreme Court is poised to reshape how those agencies enforce against employers. A new federal retirement portal is on the way, and at least one significant state AI law is on hold pending litigation.

HR leaders need a quick assessment of which of these changes affects their organization most directly. For employers with foreign-national workers, the F-1 and J-1 rules should move to the top of the list. For employers in active administrative enforcement proceedings, the Supreme Court case may matter most. For benefits teams, the SECURE 2.0 Roth catch-up rules are an operational issue right now. And for employers that built compliance plans around the Biden overtime threshold or the Colorado AI law, plan adjustments are in order.

The common issue here is timing. Each of these developments is moving faster than the typical regulatory cycle, and waiting for things to settle now carries more risk. Organizations that handle the next six weeks well will treat this as a planning quarter, not a waiting quarter.

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