New Laws & Regulations for Business Owners in 2026

If you run a business, “new year” means new goals and, of course, new rules. Laws at the federal and state levels are shifting again in 2026, and while not all changes are seismic, several require real action from employers.

Whether it’s payroll, job postings, employee classification, or tax strategy, there’s something on the table for nearly every business.

Here’s what you’ll find in this guide:

• Key federal policy updates, including tax code changes and reporting requirements
• State-level changes you need to know about
• A tactical breakdown of how to prep your business for compliance
• Support resources available to you as a BBSI client

Let’s get into what’s new and what you should do to prepare.

Key Federal Changes to Know in 2026

2026 isn’t a regulatory tsunami, but there are enough waves to throw off businesses that aren’t paying attention. Most of the action is happening in tax policy and reporting rules, with a few long-running compliance themes still evolving in the background.

Below are the biggest federal developments that business owners should prepare for.

1. Tax Code Changes: Good News, But You Need a Game Plan

Congress passed a major tax reform bill in late 2025, and it has serious implications for how you’ll manage earnings, payroll, and forecasting next year. Here’s what’s sticking:

• The 20% Qualified Business Income (QBI) deduction is now permanent for pass-through entities.
• Individual income tax brackets won’t jump back to pre-2018 levels.
• A new deduction for overtime and tips (yes, really) kicks in from 2025–2028.

What this means: If your employees are racking up overtime or working for tips, they could see a tax break, but only if payroll is set up correctly. And while some deductions are extended, others are winding down: bonus depreciation drops to 20% in 2026.

How to take action: Talk to your accountant or tax advisor. Revisit your payroll structure, update tax planning forecasts, and make sure eligible employees get the right info about the new deduction (and don’t wait until January 1 to do it).

2. Corporate Transparency Act: A Legal Requirement (That’s Currently Paused)

The Corporate Transparency Act (CTA) is one of the most misunderstood federal rules to hit small businesses in recent years. It requires many companies — LLCs, S-corps, etc. — to report their “beneficial owners” (think, anyone with significant control or ownership) to FinCEN.

Originally, existing businesses had to file by January 1, 2025, with a penalty up to $10,000 and even jail time for willful violations.

But here’s the twist: enforcement has been paused while the government re-evaluates how burdensome the rule is for small domestic companies. For 2026, most businesses can hold off on reporting unless they’re foreign-owned or involved in higher-risk activities.

Even if you're in the clear for now, that could change. 

• Keep a current record of all beneficial owners (names, addresses, DOBs, IDs).
• Assign someone on your team to monitor FinCEN updates.
• If you’ve already filed, review annually and update within 30 days of ownership changes.

It’s not a fire drill yet, but it could turn into one. Better to be ahead of it than explaining to regulators why you weren’t.

3. Employment Law: No Big Shocks, But Keep an Eye on the Details

The federal government isn’t dropping major new employment laws in 2026, but don’t mistake that for a green light to relax. There are still critical compliance zones:

• The DOL’s overtime salary threshold remains at $35,568 (after a legal block on a proposed increase).
• Agencies continue to revisit independent contractor classifications, joint employer rules, and gig economy definitions.
• OSHA electronic injury reporting requirements have expanded. More companies must file logs online, even if you’ve never had to before.

What BBSI Clients Should Do:

• Review how you classify employees vs. contractors.
• Check that anyone labeled as exempt still qualifies (by both duty and salary).
• Confirm that your injury and illness logs are up-to-date and ready to submit if required.

None of this is earth-shattering on its own. But misclassifying one employee or missing one report can lead to expensive audits or back pay. For BBSI’s part, we’ll continue to support clients with ongoing compliance updates, templates, and expert guidance behind the scenes.

State-Level Developments to Watch in 2026

While federal law sets the floor, states like California build entire second stories (and sometimes add a rooftop lounge of extra rules). That means businesses operating in multiple states, or even just in California, need to track overlapping and diverging policies. Here are four high-impact updates your team should prep for in 2026:

1. California Pay Transparency & Equity (SB 642)

• Job postings must now reflect the realistic day-one salary you expect to pay, not just the full range.
• Expanded pay equity rules now include non-binary classifications and cover bonuses, benefits, and other compensation.
• The statute of limitations for pay discrimination claims is extended to 3 years.

2. Minimum Wage & Exempt Salary Thresholds

• California’s minimum wage hits $16.90/hr, triggering an exempt salary minimum of $70,304/year.
• Washington State’s exempt salary minimum rises to $80,168.40/year.
• NY and FL also have hikes: $17/hour downstate in NY; $15 statewide in FL.

3. Paid Leave Expansions

• Connecticut’s paid sick leave law now applies to businesses with 11+ employees.
• Several states continue phasing in state retirement savings mandates for small employers.

4. Data Privacy & AI Regulation

• Indiana, Kentucky, and Rhode Island will join the privacy law club in 2026.
• Hiring tools using AI may soon require bias audits (already active in NYC).

Each of these changes affects either payroll, job postings, benefits, or internal systems. That means they’re worth handling before they cause problems.

For instance, failure to update a job posting with a compliant pay range in California could trigger complaints or even investigations. Something as simple as not updating your exempt salary minimums could be a wage-and-hour lawsuit waiting to happen.

Your Next Step: Use this list to audit your 2026 readiness across all locations where you operate. If you’re unsure how new state laws overlap with federal rules or your current policies, BBSI’s HR and compliance teams can help sort the signal from the noise.

The Upshot: How BBSI Clients Should Prepare

New rules are only a problem if you’re caught flat-footed. The good news is, BBSI’s got your back. With the right prep, you can avoid headaches and use 2026’s changes as an opportunity to clean up dusty processes, streamline operations, and reinforce compliance from the inside out.

Build Your Compliance Toolkit for 2026

Here’s how to turn regulation into routine:

1. Run a 2026 compliance check: Pull your policies, payroll, job descriptions, and postings. Look for anything tied to pay, scheduling, classification, or benefits that may need updating.
2. Refresh your employee handbook: Fold in new minimum wage rates, leave policies, and any relevant updates (like California’s expanded definition of “sex” in pay equity law).
3. Train your management team: HR practices are only as strong as the people executing them. Kick off the year with a session on what’s changing.
4. Budget smart: Wage hikes, software tweaks, or outside consulting support may all hit your 2026 line items. It’s better to anticipate than scramble.
5. Don’t DIY everything: Lean on your BBSI Business Partner and HR Consultant to make sense of changes and apply them properly.

Staying ready for changes is more about posture than perfection. Businesses that make time to anticipate changes don’t just bolster compliance; they often improve hiring practices, retain more employees, and cut down on legal exposure.

BBSI Can Help You Stay Ahead of New Laws & Regulations in 2026

2026 brings a stack of new employment law developments, tax changes, and state-specific rules that affect how you operate. For small and mid-sized business owners, the cost of missing these changes can be high, but the opportunity to adapt early is even higher.

This blog walked through the biggest updates, what they mean for your business, and how to get ahead of them with a practical game plan. As always, BBSI is here to help you interpret, apply, and stay on top of these shifting requirements.

Have questions or want help reviewing your 2026 compliance strategy? Reach out to your local BBSI representative today.