📅 2026 Update: Key Changes in U.S. Employment Law

Since the original article was written, there have been significant updates in U.S. employment law that affect issues like hiring, firing, and wages. Notably, some regulations have reverted to their previous states, while new proposals have emerged that may impact employees and employers alike. You can read more about these changes in the sections below.

⚖️ Overtime Salary Thresholds

In November 2024, a federal court vacated the Department of Labor's attempt to raise the overtime salary threshold. As a result, the threshold returned to $684 per week (or $35,568 annually), in line with the levels set in 2019. This change affects many workers who rely on overtime pay.

🚫 FTC Non-Compete Agreements

The Federal Trade Commission's 2024 rule to ban most non-compete agreements nationwide was blocked by a federal court before it could take effect. On February 12, 2026, the FTC formally removed this rule from federal regulations. This means that non-compete agreements remain enforceable in many cases.

📈 California Minimum Wage Increase

California has raised its minimum wage to $16.90 per hour, effective January 1, 2026. This is an increase from the previous rate of $16.50 in 2025. The annual adjustments aim to keep up with inflation, impacting many workers in the state.

💼 Changes to Exempt Employee Thresholds

Also effective January 1, 2026, California's salary threshold for exempt employees increased to $70,304 annually (or $5,858.67 monthly). This change impacts those classified as exempt in executive, administrative, and professional roles, ensuring they meet a higher earning standard.

📌 Summary of Key Points

  • ⚖️ Overtime salary threshold reverted to $684 per week.
  • 🚫 FTC's non-compete ban was blocked and removed.
  • 📈 California minimum wage is now $16.90 per hour.
  • 💼 Exempt employee salary threshold is now $70,304 annually.
  • 📅 Changes are effective as of January 1, 2026.

💡 Tips for Understanding Employment Law Changes

Reviewing your specific situation with an attorney can help clarify how these changes may affect you.

📊 Understand Overtime Rules

Know that as of 2026, the overtime salary threshold is $684 per week. This means employees earning less than this amount may be eligible for overtime pay.

🔍 Stay Informed on Non-Compete Agreements

Since the FTC's non-compete rule was vacated, many existing non-compete agreements remain valid. Understanding your rights in this area is crucial for contract negotiations.

💰 Adjust to Minimum Wage Changes

In California, the minimum wage has increased to $16.90 per hour. Employers must comply with this change, which can impact salary negotiations and employee budgets.

📅 Keep Up with Exempt Status Changes

With the new exempt employee salary threshold set at $70,304 annually, it’s essential for both employers and employees to review classifications. Misclassifications can lead to legal issues.

📜 Update Workplace Notices

California employers are required to post the new minimum wage notice. Ensure that your workplace reflects the current wage laws to stay compliant.

❓ Frequently Asked Questions

❓ What is the current federal minimum wage?

The federal minimum wage remains at $7.25 per hour. However, many states and localities, like California, have higher minimum wage rates.

📅 When do changes to California's minimum wage take effect?

The increase to California's minimum wage of $16.90 per hour took effect on January 1, 2026. Employers must comply with this new wage law immediately.

🏢 Can I still enforce a non-compete agreement?

Yes, many non-compete agreements remain enforceable since the FTC's proposed ban was blocked. It's important to review the specific terms of any agreement you have signed.

📈 How often does California adjust its minimum wage?

California adjusts its minimum wage annually based on inflation. This adjustment can include increases of up to 3.5% if inflation exceeds 7%.

💼 What qualifies an employee as exempt in California?

In California, to be classified as an exempt employee, one must earn at least $70,304 annually as of January 1, 2026. This applies to roles in executive and administrative positions.

📜 Where can I find more information on employment rights?

Free resources are available through the U.S. Department of Labor's Wage and Hour Division and the California Department of Industrial Relations, which offer guidance on various employment issues.

⚖️ Recent Court Cases Related to Employment Law

There have been significant court rulings affecting employment law, particularly regarding wage and hour regulations and non-compete agreements. These decisions can shape how employees and employers navigate their rights and responsibilities.

For more recent rulings, feel free to browse more rulings on the news page.

End of October 2026 Update





What are Layoffs?

• A layoff is the temporary suspension or permanent termination of employment for a particular employee-base in a company. Layoffs occur when a company is doing poorly or an industry is suffering. By terminating a large number of employees the business saves money and cut costs through the elimination of employee wages. Typically layoffs consist of the termination of large group of employees for business purposes; typically these unfortunate situations arise when certain positions are obsolete, no longer necessary, or when a macro slowdown occurs. When a company lays off a part of its employee base there is no true structure to be followed. A company can lay off a portion of a particular industry or the entire industry—the amount of employees who are laid off is proportionately dependent on the company’s particular business models and a cost/benefit analysis of the company.

• Layoffs are unfortunately an aspect of modern day business. The majority of corporations utilize a profit-based business model where costs are consistently weighed against production. When a company is experiencing a lack of sales or production, the employees are typically the first component of the business to feel the negative effects.

• Layoffs are held separately from firing employees. When a corporation fires an employee they terminate the individual for a specific reason. The reasons for firing an employee are typically performance based issues; the employee no longer contributes in a positive manner, and is thus relieved from his or her duties. In addition, an employee can also be fired for misconduct, chronic lateness, or seemingly any reason that disrupts the business’ intended goals. In contrast, layoffs are the termination of multiple employees (typically an entire department or industry is terminated) to cut costs and save money in the long run. As a result of these characteristics, layoffs are typically not based on individual performance, but instead on the particular department’s health. The innate differences between firing and layoffs result in varied aftereffects in the form of government aid and unemployment benefits.

Unemployment Compensation

• In the majority of U.S. States, workers who are laid off can file for unemployment compensation through their local state government. Depending on the local laws in the particular state, workers who leave their job voluntarily or are fired for performance-based reasons or gross misconduct are generally not eligible to collect unemployment compensation.

• Unemployment compensation is awarded (in most instances) to individuals who suffer from company-wide layoffs. The compensation is awarded to the individual in the form of a paper check or direct deposit. The amount of compensation is dependent on the individual’s previous salary; the compensation rate is a percentage of the individual’s monthly income.

Layoffs