Compliance Round Up –A House Joint-Employer Bill, California and Colorado 2027 Wages, and a Third Circuit ADA Ruling

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Written By
Jennifer Kiesewetter
Published On: August 17, 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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State agencies are locking in 2027 pay floors. At the same time, Congress and the federal courts are redrawing where federal labor law reaches and what employers owe employees who never asked for help. 

Here is what changed, and what it means for your workplace.

Federal News

Status: Advanced out of the U.S. House Committee on Education & the Workforce on July 21, 2026 (H.R. 5267).

What’s Changing

On July 21, 2026, the House Committee on Education & the Workforce advanced the American Franchise Act (H.R. 5267) by an 18-15 party-line vote and sent it to the House floor. The bill would write one franchise joint-employer standard into both the National Labor Relations Act (NLRA) and the Fair Labor Standards Act (FLSA). Under that standard, a franchisor qualifies as a joint employer of a franchisee’s employees only when it possesses and exercises substantial, direct, and immediate control over one or more essential terms and conditions of their employment. The bill also defines direct and immediate control to exclude control exercised on a sporadic, isolated, or de minimis basis.

The joint-employer test has shifted repeatedly over the past decade as National Labor Relations Board rulemaking and court decisions pushed it back and forth. The bill would end that cycle for franchising by writing the 2020 Board standard, the one in effect now, into statute. The measure still needs a full House vote, and a Senate companion (S. 3525) sits in the HELP Committee, so nothing binds employers yet.

What This Means for HR:

  • Track the bill through the House floor, but keep applying the current NLRB and U.S. Department of Labor joint-employer standards until any law takes effect.
  • Map every franchise relationship where a joint-employer finding would create exposure.
  • Review the franchise agreements governing those relationships to confirm who controls hiring, scheduling, pay, and discipline.
  • Note that the bill reaches franchising only. Staffing and subcontractor arrangements stay under the existing agency standards regardless of the outcome.

Trending State News

Effective date: January 1, 2027.

What’s changing

California’s statewide minimum wage will rise from $16.90 to $17.40 per hour on January 1, 2027. The Department of Finance certified the increase on July 31, 2026, applying the annual inflation adjustment state law requires. Governor Newsom announced the new rate the same day, and the California Department of Industrial Relations (DIR) has since issued employer guidance.

The increase carries a second cost HR teams cannot miss. California pegs the salary floor for its executive, administrative, and professional exemptions to twice the state minimum wage for full-time employment, so the minimum exempt salary climbs to $72,384 a year. Employees must still satisfy the duties test for the specific exemption. Employers with workers near that line may need to raise salaries or reclassify.

Local minimum wages and industry-specific rates, including fast food and health care, run higher than the state figure, so employers should confirm every applicable requirement rather than the statewide rate alone.

What this means for HR

  • Update California pay rates to at least $17.40 per hour before January 1, 2027, and check every applicable local ordinance.
  • Audit exempt salaries against the new $72,384 threshold, and reclassify or raise pay for anyone who falls short.
  • Budget now for the combined hourly and exempt-salary increases across your California workforce.

Effective Date: January 1, 2027. 

What’s Changing

On August 13, 2026, the Colorado Department of Labor and Employment (CDLE), through its Division of Labor Standards and Statistics (DLSS), announced that the statewide minimum wage will increase to $15.71 per hour in 2027, up from $15.16. The tipped minimum wage rises to $12.69 from $12.14, since Colorado’s tip credit is fixed at $3.02 and the tipped rate moves with the standard rate. Colorado’s constitution requires an annual adjustment tied to the Consumer Price Index (CPI).

Local rates can run well above the state floor. Denver has set its 2027 minimum wage at $19.84, up 55 cents, and other Colorado localities set their own figures by ordinance. Employers that operate across multiple Colorado jurisdictions will need to reconcile the state rate with each local one.

What This Means for HR:

  • Raise Colorado pay to at least $15.71 per hour, and $12.69 for tipped employees, by January 1, 2027.
  • Confirm the correct local rate for each Colorado worksite, since Denver and other cities exceed the state minimum.
  • Recheck tip-credit math so tipped workers still reach the full minimum wage once tips are counted.

Around the Courts

Status: Decided July 20, 2026 (Hileman v. West Penn Allegheny Health System, Inc., U.S. Court of Appeals for the Third Circuit, No. 25-1459).

What’s Changing

In Hileman v. West Penn Allegheny Health System, Inc., the Third Circuit affirmed summary judgment for the employer under the Americans with Disabilities Act (ADA). The court held that an employee must notify the employer of a disability and clearly communicate a desire for accommodation or leave before the employer’s duty to accommodate attaches. The plaintiff, a CAT scan technologist fired for sleeping on duty and other misconduct, raised her diabetes for the first time when her supervisor confronted her during the investigation, and she never asked for an accommodation.

The court wrote that the disability-discrimination and medical-leave laws are “shields against discrimination, not get-out-of-discipline-free cards,” and that an employer need not go digging for a disability an employee never disclosed. On neutral rules, the panel was direct: “Except in narrow circumstances, employers may enforce neutral workplace rules even when misconduct stems from a disability.”

One limit survives. When a need for accommodation is obvious from visible or known facts, the employer must follow up even on a vague remark.

The decision is precedential, so employers in Delaware, New Jersey, Pennsylvania, and the U.S. Virgin Islands now have firmer footing.

What this means for HR

  • Respond promptly and document the interactive process the moment an employee discloses a disability or asks for accommodation.
  • Act on an obvious impairment even without a formal request, since visible or known facts can trigger the duty on their own.
  • Enforce neutral conduct rules consistently, since a disability raised only after misconduct generally does not excuse it.
  • Train managers to recognize an accommodation request and route it to HR, even when an employee does not use formal ADA language.

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