Compliance Round Up – DOL Rewrites Contractor Rules, States Advance Retirement and Workplace Mandates, and Courts Reset Union and Biometric Liability (April 2026)

Headshot of Jennifer Kieswetter
Written By
Jennifer Kiesewetter
Published On: April 7, 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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It’s early April, and the Department of Labor’s independent contractor comment deadline is three weeks away. New York’s retirement savings registration deadline just passed for larger employers and is coming fast for mid-size ones. A federal appeals court handed employers a significant win on union elections, while a different circuit slashed potential biometric privacy liability to a fraction of what it once was. This is a fast-paced compliance effort that requires prompt attention.

Here is what your team needs to know.

Federal News

Effective Date: Proposed rule published February 27, 2026; comments due April 28, 2026

What’s Changing:

On February 26, 2026, the U.S. Department of Labor proposed a rule rescinding the 2024 Biden‑era six‑factor worker classification test and replacing it with a five‑factor economic realities framework that gives extra weight to two “core” factors: the degree of control a hiring entity exercises over the work and whether the worker has a genuine opportunity for profit or loss through their own initiative and investment.

The Biden‑era rule treated all six factors equally. The new proposal largely restores the 2021‑era framework and will generally make it easier to classify workers as independent contractors under the Fair Labor Standards Act (FLSA). The Department also clarifies that requiring compliance with safety rules, deadlines, or insurance requirements does not constitute the kind of control that converts a contractor to an employee — a meaningful distinction for employers whose service agreements include standard contract terms.

If finalized, the rule would apply a uniform classification standard across the FLSA, Family and Medical Leave Act (FMLA), and Migrant and Seasonal Agricultural Worker Protection Act (AWPA/MSPA).

What This Means for HR:

  • Audit current contractor arrangements against the two core factors — degree of control and opportunity for profit or loss — before the rule is finalized.
  • Review written agreements to confirm they accurately reflect how work is actually performed in practice, not just what is on paper.
  • The comment period closes April 28. If your organization relies heavily on contractors, submitting comments is worth the time.

Effective Date: Signed March 26, 2026; mandatory contract clause required within 30 days

What’s Changing?

On March 26, 2026, President Trump signed the executive order “Addressing DEI Discrimination by Federal Contractors,” directing federal agencies to add a mandatory clause to all covered contracts and subcontracts prohibiting what the order defines as “racially discriminatory DEI activities.” The requirement flows down to subcontractors at every tier with no exceptions, and agencies have 30 days to begin inserting the clause.

What sets this order apart from earlier DEI‑related federal actions is the enforcement mechanism. The order explicitly makes contractor compliance with the clause “material to the government’s payment decision,” which is the legal trigger for False Claims Act liability. Contractors who certify compliance with the clause while knowingly maintaining covered programs face potential civil penalties, federal investigation, whistleblower‑driven qui tam suits, in addition to contract suspension and debarment.

Why private employers should pay attention: This does not stop with federal contractors. If your business works with a federal contractor, even indirectly, these requirements may apply to you through contract terms. Even if you have no government ties, this order signals a shift in how DEI programs are being reviewed and challenged. Employers should take a closer look at existing policies and practices to understand how they could be interpreted and whether any adjustments are needed.

What This Means for HR:

  • Federal contractors and their subcontractors should conduct a prompt legal review of existing DEI programs against the order’s definition of “racially discriminatory DEI activities,” which includes disparate treatment based on race or ethnicity in recruitment, hiring, promotions, contracting, or allocation of resources, before the clause appears in their next contract.
  • Document the steps your organization takes. False Claims Act exposure turns on knowledge and intent, so a clear, contemporaneous compliance paper trail matters.
  • Subcontractors should expect this language to appear in prime contract flow‑downs quickly.

Effective Date: Proposed rule published March 30, 2026; comments due June 1, 2026

What’s Changing?

On March 30, 2026, the U.S. Department of Labor proposed a rule creating a process‑based safe harbor for plan fiduciaries who wish to include alternative assets such as private equity, private credit, cryptocurrency, real estate, and infrastructure as designated investment alternatives (DIAs) in defined contribution plans. To qualify, fiduciaries must document an objective, thorough evaluation of six factors: performance, fees, liquidity, valuation, performance benchmarks, and complexity.

This proposal reverses Biden‑era guidance that discouraged cryptocurrency and other alternative investments on ERISA fiduciary grounds. No plan sponsor is required to add these assets; the safe harbor creates a protected path for fiduciaries that choose to offer them without bearing the full standalone fiduciary risk. The comment period runs through June 1, 2026.

What This Means for HR:

  • Brief your plan’s investment committee now. Even if your organization does not plan to add alternative assets, they need to understand that the DOL is creating a defined safe‑harbor path for including them.
  • If employees have asked about crypto or private equity options, document those requests as you monitor the rulemaking.
  • Any investment menu changes, including changes within participant‑directed accounts, even after a final rule is issued, require ERISA counsel review before action.

Trending State News

Effective Date: July 1, 2026, if signed into law

What’s Changing?

Florida’s House Bill 641, the Freedom of Conscience in the Workplace Act, has passed the House and is working through the Senate. If signed into law, it would prohibit employers from requiring employees to use pronouns inconsistent with a person’s sex assigned at birth, bar non‑binary options on job applications, and make it an unlawful employment practice to take adverse action against employees who oppose “gender ideology,” including off‑site conduct and social media posts.

Public employers and organizations receiving state funding face additional restrictions under the bill, including a prohibition on requiring training about sexual orientation, gender identity, or gender expression as a condition of employment.

The complication is direct: Title VII of the Civil Rights Act of 1964, as interpreted by the U.S. Supreme Court in Bostock v. Clayton County (2020), prohibits discrimination on the basis of sex, including gender identity and sexual orientation. Compliance with HB 641 could expose employers to federal civil rights liability, while compliance with federal law could expose them to state enforcement action.

What This Means for HR:

  • Track the bill through the Senate closely. HB 641 is not yet enacted; a veto or amendment is still possible before July 1, 2026.
  • Work with employment counsel now to map where HB 641’s requirements conflict with your Title VII and related federal‑law obligations and existing training programs.
  • Review job application templates for gender, pronoun, or “non‑binary” fields that would need to change if the bill becomes law.

Effective Date: March 18, 2026 (30+ employees); May 15, 2026 (15–29 employees); July 15, 2026 (10–14 employees).

What’s Changing: 

The New York Secure Choice Savings Program is now enforcing staggered registration deadlines. Private employers with 10 or more New York‑based employees who have operated for at least two years and do not offer a qualified retirement plan (such as a 401(k), SEP IRA, SIMPLE IRA, 403(b), or governmental 405(b) plan) must register with the state program and facilitate payroll deductions into a state‑administered Roth IRA. For employers with 30 or more employees, that first deadline passed on March 18, 2026.

Enrolled employees contribute at a default rate of 3% of gross pay, though participation is voluntary. Workers can opt out or adjust their contribution rate at any time. The IRA is employee‑owned, not employer‑managed.

What This Means for HR:

  • If you have 30 or more New York employees and missed the March 18 deadline, register now to limit penalty exposure.
  • Verify whether your existing plan — 401(k), SIMPLE IRA, SEP IRA, or another qualifying arrangement — constitutes a covered plan that exempts the employer from Secure Choice registration.
  • New York joins a growing list of states with mandatory retirement savings programs. If your workforce spans multiple states, a unified compliance calendar will help you stay ahead of the next deadline.

Around the Courts

Effective Date: Decision issued March 6, 2026 (Brown-Forman Corp. v. National Labor Relations Board, Sixth Circuit)

What’s Changing:

On March 6, 2026, the U.S. Court of Appeals for the Sixth Circuit became the first federal appellate court to reject the National Labor Relations Board’s 2023 bargaining‑order standard articulated in Cemex Construction Materials Pacific, LLC (Cemex), which allowed the Board to impose union recognition on an employer even after employees voted against it.

The case arose at Brown‑Forman’s Woodford Reserve distillery in Kentucky, where employees voted against union representation by a wide margin. The Board issued a bargaining order after finding that Brown‑Forman had distributed wage increases, benefit changes, and bottles of bourbon during the organizing campaign. The Sixth Circuit agreed that unfair labor practices occurred but rejected the bargaining order. The court found that the National Labor Relations Board (NLRB) went too far by trying to change its enforcement approach through case decisions instead of using the formal rulemaking process.

What This Means for HR:

  • This decision currently applies in Ohio, Michigan, Kentucky, and Tennessee, but it opens the door for similar challenges to the Cemex‑derived standard in other circuits. Employers facing NLRB proceedings under the Cemex standard should consult counsel immediately.
  • The ruling does not eliminate unfair labor practice exposure. Wage increases, benefit changes, and gifts during organizing campaigns still constitute violations.
  • Train managers and supervisors on what they cannot do during a union organizing campaign. That compliance obligation remains fully intact.

Effective Date: Decision issued April 1, 2026 (Clay v. Union Pacific Railroad Co., Seventh Circuit)

What’s Changing:

On April 1, 2026, the U.S. Court of Appeals for the Seventh Circuit held in Clay v. Union Pacific Railroad Co. that Illinois’s 2024 amendment to the Biometric Information Privacy Act (BIPA) — which limits plaintiffs to a single statutory recovery per person, per collection method — applies retroactively to all cases pending when the amendment took effect.

This had an immediate impact. The Illinois Supreme Court’s 2023 decision in Cothron v. White Castle System, Inc. held that a separate claim accrues every time a company collects or transmits biometric data without consent. Because the Biometric Information Privacy Act provides $1,000 to $5,000 per violation, the “per‑scan” theory created enormous potential liability, with White Castle estimating its own exposure at more than $17 billion. The retroactive cap dramatically reduces what plaintiffs in pending cases can seek, but it does not eliminate BIPA liability.

What This Means for HR:

  • If your organization is a party to pending biometric privacy litigation in Illinois, work with counsel now to reassess damages exposure under the retroactive cap.
  • Confirm that your biometric data collection practices have written consent policies, clear notice at the time of collection, and retention and destruction schedules in place.
  • At least 10 states have enacted comprehensive privacy laws that treat biometric data as a protected or sensitive category, and several additional states have standalone biometric‑specific statutes. This ruling does not reduce the need for sound biometric data governance regardless of where your employees work.

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