Compliance Round Up – New Time Limits for Foreign Students, Virginia’s Noncompete Crackdown, and a Third Circuit Race-Bias Ruling (July 2026)

Headshot of Jennifer Kieswetter
Written By
Jennifer Kiesewetter
Published On: July 20, 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.

—

This week brought new limits on noncompetes, expanded family leave requirements, fixed time limits for foreign students, and appellate decisions addressing discrimination and arbitration claims. Here are six developments employers should know.

Federal News

Effective Date: Published in the Federal Register on July 17, 2026; the final rule takes effect September 15, 2026.

What’s Changing

The U.S. Department of Homeland Security (DHS), through Immigration and Customs Enforcement (ICE), published a final rule ending the decades-old “duration of status” framework for F-1 foreign students and J-1 exchange visitors. Currently, students and exchange visitors generally may remain in the United States as long as they continue their authorized academic program, exchange program, or related practical training and otherwise maintain lawful status.

Beginning September 15, 2026, F and J nonimmigrants entering the United States will generally receive a fixed admission period tied to the end date of their program, subject to a maximum of four years. The rule also reduces the F-1 post-completion grace period from 60 days to 30 days. I nonimmigrants, representatives of foreign information media, will receive up to 240 days.

F and J nonimmigrants who need more time will generally need to file Form I-539 to request an extension of stay. The rule also limits school transfers and program changes, with separate transition rules for those already in the United States on September 15, 2026.

What This Means for HR:

  • Identify every worker or intern on F-1 (including OPT and STEM OPT) or J-1 status, and record each program end date.
  • Build extension deadlines into work-authorization tracking to avoid gaps in authorization.
  • Coordinate with immigration counsel before the September 15, 2026, effective date on any pending school transfer, program change, or extension.

Trending State News

Effective Date: Governor Abigail Spanberger signed Senate Bill 170 on April 13, 2026; it took effect July 1, 2026, and applies to agreements entered into, amended, or renewed on or after that date.

What’s Changing

Virginia already bars noncompete agreements for “low-wage” employees, a group that includes any worker classified as nonexempt under the Fair Labor Standards Act (FLSA) and anyone earning below the state’s average weekly wage, currently about $78,364 a year. Senate Bill 170 adds a new restriction on top of that.

The law amends Section 40.1-28.7:8 to bar enforcing a noncompete against an employee discharged without cause unless the employer provides severance or another monetary payment and discloses that compensation when the agreement is executed. A noncompete agreement may remain enforceable against an employee who resigns or is discharged for cause, subject to Virginia’s other restrictions. The law does not define “cause” or establish a minimum payment. Each violation carries a civil penalty of up to $10,000, plus the employee’s reasonable costs and attorney fees.

What This Means for HR:

  • Audit Virginia noncompetes, since the statute already bars them for low-wage and FLSA-nonexempt employees.
  • Disclose, at signing, any severance or payment you will rely on to enforce a noncompete, since an undisclosed payment will not support it after a without-cause discharge.
  • Consider the $10,000-per-violation penalty, plus costs and fees, before adding a noncompete to a Virginia agreement.

Effective Date: Then-Governor Phil Murphy signed Assembly Bill A3451 on January 17, 2026; the amendments took effect July 17, 2026.

What’s Changing

New Jersey broadened the New Jersey Family Leave Act (NJFLA) to reach far more employers. The law now applies to private employers with 15 or more employees, down from 30, regardless of where those employees work. As a result, smaller employers, including companies based outside New Jersey with at least 15 total employees and one or more employees in the state, must now comply with the NJFLA’s leave, job-protection, notice, and recordkeeping requirements.

Workers also qualify sooner, after three months of employment and 250 hours worked during the preceding 12 months, rather than 12 months and 1,000 hours. The NJFLA still provides up to 12 weeks of job-protected leave in a 24-month period to bond with a new child or care for a family member with a serious health condition.

The amendments also add job-restoration rights for employees receiving Temporary Disability Insurance or Family Leave Insurance benefits, although questions remain about how those protections interact with the NJFLA. Many small employers will apply the law for the first time this summer.

What This Means for HR:

  • Confirm whether your total headcount, counting employees outside New Jersey, reaches the 15-employee NJFLA threshold.
  • Update eligibility screening to the three-month, 250-hour standard, which is now in effect.
  • Train managers at smaller New Jersey sites on job-protected leave and restoration duties new to them.

Effective Date: The Minnesota Department of Labor and Industry adopted the final rules implementing the Minnesota Earned Sick and Safe Time Law on June 29, 2026; the rules took effect July 6, 2026. The underlying law has been in effect since January 1, 2024.

What’s Changing

The Minnesota Department of Labor and Industry (DOLI) issued final administrative rules clarifying how the state’s Earned Sick and Safe Time (ESST) law works in practice.

An employer must designate and communicate its accrual year, or the calendar year applies. Eligibility rests on a good-faith determination that an employee will work at least 80 hours a year in Minnesota, and employers cannot require employees to use ESST. When an exempt employee takes a full-day ESST absence, the employer may not deduct more ESST than the hours credited for that day. The rules also address suspected misuse and supporting documentation.

What This Means for HR:

  • Designate and communicate your ESST accrual year, or the calendar year applies.
  • Apply the 80-hour good-faith test when determining which Minnesota workers qualify for ESST.
  • Update payroll so a full-day ESST absence by an exempt employee does not exceed the employee’s daily credited hours.

Around the Courts

Decided: July 6, 2026 (Lynn v. Bank of New York Mellon, U.S. Court of Appeals for the Third Circuit, No. 25-1664).

What Happened

In Lynn v. Bank of New York Mellon, the Third Circuit affirmed summary judgment for the employer on race discrimination, retaliation, and hostile work environment claims under Title VII of the Civil Rights Act of 1964, Section 1981, and the New Jersey Law Against Discrimination (NJLAD). The employee forfeited his hostile work environment claim by failing to develop it on appeal. The opinion is precedential and unanimous.

The employee, who is Black, pointed to comments his supervisor made before a workplace diversity discussion, including that the supervisor did not believe in the Black Lives Matter (BLM) movement or in white privilege. The court held that the record showed disagreement with the BLM movement rather than hostility toward Black employees. It also noted that the manager who later eliminated the employee’s position had hired him over a white applicant only months earlier, which weighed against discriminatory intent.

The retaliation claim cleared the first hurdle, since only 13 days separated the complaint from the position’s elimination. But the employer had already documented the reorganization and the employee’s performance problems before he complained, which undercut the retaliation claim. The Third Circuit covers Delaware, New Jersey, and Pennsylvania.

What This Means for HR:

  • Document performance concerns as they arise, since contemporaneous records, not post-complaint criticism, defeated the retaliation claim here.
  • Treat a manager’s political commentary as a risk, since the comments escaped liability only alongside strong reviews and career support.
  • Record the business reasons for any reorganization or position elimination, especially one that follows soon after a complaint.

In Cocom v. ABM Aviation, Inc., the Ninth Circuit reversed a district court that had refused to compel arbitration of a former airport janitor’s putative wage-and-hour class claims, and sent the case back for further proceedings. The trial court had found the mutual arbitration agreement both procedurally and substantively unconscionable.

The appeals court disagreed. It distinguished the agreement from agreements struck down in two California cases, noting that this one was limited to employment-related disputes, so its duration was not indefinite. Even if the agreement’s waivers of representative claims under California’s Private Attorneys General Act (PAGA) and of public injunctive relief were unconscionable, the court held, those provisions could be severed. Because that resolved the challenge, the court did not address procedural unconscionability. The Ninth Circuit covers California and eight other western states.

What This Means for HR:

  • Limit arbitration agreements to employment-related disputes, a feature that helped this agreement survive.
  • Include a severability clause so one questionable provision does not void the entire agreement.
  • Review arbitration agreements against current Ninth Circuit standards if you operate in California or another western state.

—

The information contained in this site is provided for informational purposes only, and should not be construed as legal advice on any subject matter.