Employment law developments in the first half of 2026 increasingly focused on how employers document, govern, and defend hiring decisions across criminal history, AI, compensation, cannabis, and immigration.gettyThe first half of 2026 has reinforced a significant change in the way hiring compliance operates.Across criminal history, compensation, cannabis, artificial intelligence, immigration, and other areas, lawmakers and regulators are increasingly asking employers to explain how decisions are made, document their reasoning, maintain meaningful oversight, and demonstrate that their processes are fair, consistent, and defensible.The rules are changing. So is what compliance requires. A policy may describe the rule. The hiring process determines whether an organization can apply it at the right time, in the right jurisdiction, and under changing legal standards.That makes adaptability increasingly important. Employers need compliance programs capable of responding to change while continuing to produce decisions that are consistent, explainable, and defensible.The developments shaping the first half of 2026 show what that looks like in practice.Criminal History: The Process Behind The DecisionCriminal history remains one of the fastest moving and most challenging areas of hiring compliance.The complexity now extends well beyond when an employer may ask about criminal history. Legal requirements can govern what records an employer may consider, how that information must be evaluated, what must be communicated to the applicant, and what must occur before a final decision.MORE FOR YOUThose requirements may also depend on where the work is performed, where the applicant resides, or both. The result is a modern fair chance framework increasingly focused on how employers reach their decisions.Texas provides an unusual example of the legal landscape becoming less restrictive. After surviving legal challenges, the Texas Regulatory Consistency Act, commonly known as the “Death Star” law, has rendered the ban-the-box ordinances in Austin and DeSoto unenforceable. The local ordinances remain on the books, but employers are no longer required to follow their criminal history timing restrictions because state law preempts them.The development is a reminder that employers must monitor when obligations disappear as well as when new ones take effect.Washington moved in the opposite direction. Its revised Fair Chance Act creates one of the most significant expansions of a state fair chance law in recent years. Criminal history generally cannot be considered until after a conditional offer. Before disqualifying an applicant based on a conviction, employers must complete and document an individualized assessment. That assessment then becomes part of the pre-adverse action process.Washington also requires employers to hold the position open for at least two business days after providing the required notice. Employers using consumer reports must separately account for the Fair Credit Reporting Act's requirement to provide a reasonable opportunity to respond.The law also requires employers to provide the Washington Attorney General's Fair Chance Guide in two specific circumstances: when an employer tells an applicant after a conditional offer that the position is subject to a background check, or when an applicant voluntarily discloses criminal history during an interview.That requirement illustrates how easily a legal obligation can land outside the background screening process itself. The issue is primarily one of hiring workflow and recruiter training.Philadelphia takes the focus on process even further. Effective January 6, misdemeanor convictions are generally subject to a four-year lookback period, summary offenses may not be considered, and expunged or sealed records remain off limits.The more significant changes involve the decision-making process. Before taking adverse action based on criminal history, employers must complete and document an individualized assessment, provide that assessment to the applicant, and issue a provisional notice identifying the criminal history at issue. The applicant then receives ten business days to respond with evidence of error, rehabilitation, or other mitigating information.The Philadelphia Commission on Human Relations has also provided initial implementation guidance. Importantly, the Commission confirmed that employers do not need to wait for a government-issued notice of rights. Employers may develop their own notice, provided it communicates the substantive rights required by the ordinance.Together, Washington and Philadelphia illustrate a broader development. The question increasingly becomes whether the employer can show its work. Was the assessment individualized? Was the process documented? Did the applicant receive a meaningful opportunity to respond?At the same time, Clean Slate laws are changing the information that reaches the employer's decision-making process.Utah now requires courts to identify eligible cases for automatic expungement. Virginia has expanded automatic and petition-based sealing for many eligible non-convictions, misdemeanors, and certain lower-level felonies. Washington, D.C.'s Second Chance Amendment Act broadens relief across numerous categories of criminal history.Illinois recently became the thirteenth state to adopt an automated record-sealing framework. The law immediately shortened waiting periods and removed procedural barriers for many eligible records. Beginning in 2029, the state will start implementing automatic sealing for qualifying records without requiring individuals to file petitions.Over time, employers should expect criminal history searches to contain fewer publicly available records. That transition can create difficult operational questions. A record may become legally eligible for sealing before the court system completes the process. An applicant may therefore contend that a record should no longer appear even though it remains publicly available.The modern fair chance challenge is increasingly operational. Employers need workflows that apply the correct jurisdictional requirements, support consistent individualized assessments, accommodate candidate participation, and account for changes in both the governing law and the underlying criminal record.Credit History: The Exception Must Fit The JobCredit history presents a different threshold question. Before deciding how to use credit information, employers must determine whether they should obtain it at all.Most jurisdictions restricting employment credit checks do not prohibit them entirely. Instead, they limit their use to specific categories of positions, often involving fiduciary responsibility, authority over financial accounts, or access to sensitive financial, proprietary, or confidential information.Those exceptions generally depend on actual job duties rather than titles. A position does not qualify for an employment credit check simply because “manager,” “director,” or “supervisor” appears in the title.Some jurisdictions impose additional requirements. In Colorado, when credit information contributes to an employment decision, employers must disclose that the information was considered and explain why it was job-related.In 2026, New York became the latest state to significantly restrict the use of credit history in employment. Effective April 18, Senate Bill 3072 broadly restricts the use of consumer credit history for employment purposes. The law defines credit history broadly, reaching traditional credit reports and scores as well as bankruptcies, late payments, collections, liens, judgments, and even self-disclosed information concerning an individual's creditworthiness.Eight statutory exceptions generally permit the use of credit information in defined circumstances. These include certain positions subject to legally required background checks, law enforcement and national security roles, access to trade secrets or sensitive financial systems, and certain positions involving significant fiduciary responsibility or authority over financial transactions.The exceptions are narrow, and the employer bears the burden of establishing that a position qualifies. Employers hiring in New York City must also consider the city's separate Stop Credit Discrimination in Employment Act, which may impose stricter requirements.The practical compliance principle is restraint. Employers should identify qualifying positions before hiring begins, configure screening packages accordingly, periodically review those decisions, and document the actual job duties supporting any statutory exception.Pay Transparency: Compensation Becomes A Compliance SystemPay equity and pay transparency have become two of the fastest-moving areas of employment compliance.The requirements vary by jurisdiction, but compensation increasingly falls within a broader compliance system that reaches what recruiters ask, what job postings disclose, what managers communicate, and how compensation decisions are documented.Pay history bans generally restrict employers from requesting or relying on an applicant's prior compensation. Pay transparency laws typically require compensation information in job postings. Many jurisdictions regulate both.Remote work adds another layer. Because these requirements often follow where work may be performed, a single remote job posting can trigger multiple state or local laws.Maine and Virginia illustrate how the framework continues to expand.Effective July 29, Maine employers with ten or more employees must include a good faith pay range in job postings. The law also requires employers to provide current employees with the pay range for their position upon request and maintain records documenting each employee's position and compensation throughout employment and for three years after separation.Virginia took a broader approach. Effective July 1, employers must include good-faith salary ranges in public and internal job postings. The law also generally prohibits requesting or relying on salary history and provides for both Attorney General enforcement and a private right of action.These laws reach beyond the job posting itself. They regulate the systems surrounding compensation, including recordkeeping, recruiting practices, employee rights, and enforcement.Litigation is also expanding the scope of protected compensation discussions.In a recent case, the Oregon Court of Appeals concluded that requesting a raise can constitute protected activity under the state's wage transparency law. The employee had received a promotion and salary increase, requested an additional $5,000, and was terminated several days later. The court did not decide whether the employer ultimately violated the law. It addressed the threshold question of whether requesting a raise could qualify as protected activity and concluded that it could.The practical lesson extends beyond Oregon. Employers may deny a request for a raise. Taking adverse action because an employee engaged in a legally protected compensation discussion can create a separate risk.Compensation compliance therefore increasingly spans the employment lifecycle. Employers need defensible pay ranges, consistent recruiting practices, reliable documentation, careful attention to remote positions, and managers who recognize when compensation conversations may receive legal protection.Cannabis: One Substance, Many Workplace Rules Cannabis remains one of the most fragmented areas of workplace compliance.Employers must navigate medical marijuana, recreational marijuana, drug testing, accommodation, workplace safety, and federal requirements. Those frameworks frequently produce different obligations depending on the jurisdiction and the work an employee performs.For medical marijuana, the focus increasingly centers on accommodation. Some states provide anti-discrimination protections that may require individualized consideration of lawful off-duty medical use. Other states impose no accommodation requirement, while others provide limited statutory guidance. Philadelphia and Pittsburgh go further by generally restricting pre-employment marijuana testing in many circumstances.The medical cannabis landscape also continues to evolve. Georgia significantly expanded its program in 2026 through Senate Bill 220, the “Putting Georgia’s Patients First Act.” The law broadens qualifying conditions and permissible products, authorizes certain vaporized forms of medical cannabis, replaces the state’s former 5% THC cap with a total-THC possession limit, and provides reciprocity for certain out-of-state medical cannabis registrations. The changes bring Georgia’s program closer to limited medical cannabis frameworks in other states, including Texas.Federally regulated and safety-sensitive work often operates under different rules.Recreational marijuana creates a different set of questions.Some jurisdictions continue to permit THC testing and adverse action based on positive results. Others restrict employment decisions based on a positive marijuana test alone. California and Washington increasingly distinguish between evidence of prior use and evidence more closely associated with recent use, while jurisdictions including New York and Minnesota generally restrict pre-employment marijuana testing unless an exception applies.A positive marijuana test and workplace impairment are increasingly treated as different questions. Traditional urine testing detects inactive THC metabolites and does not establish present impairment. Employers therefore increasingly need to ask what they are testing for, what the result actually demonstrates, and whether state law permits them to act on it.Maine and Oklahoma illustrate two different approaches to workplace testing.Effective July 29, Maine significantly revises its workplace substance use testing framework. The law replaces the prior probable-cause standard with reasonable suspicion based on observable signs of impairment and requires employers to document the basis for that suspicion before testing. It also expressly recognizes criteria-based testing tied to predetermined events, such as an employment anniversary or promotion, and gives applicants and employees an opportunity to provide a legitimate medical explanation for a non-negative result. Employers conducting state-regulated testing must continue to maintain a written policy approved by the Maine Department of Labor.Effective November 1, Oklahoma establishes a mandatory zero-tolerance drug and alcohol standard for safety-sensitive positions and creates a more detailed duties-based framework for identifying those roles. It also expands employer authority to act on positive marijuana tests under a compliant written testing policy while continuing to protect individuals based solely on possession of a valid medical marijuana license.Federal policy is changing as well. Earlier this year, the Department of Justice reclassified certain FDA-approved and state-licensed medical marijuana products from Schedule I to Schedule III under the Controlled Substances Act.The development recognizes accepted medical uses for covered products and may contribute to more workplace accommodation requests. It does not legalize recreational marijuana, eliminate otherwise lawful workplace testing, or prohibit drug-free workplace policies. The Department of Transportation has also not changed its testing requirements.Litigation adds another source of risk.The New Jersey Appellate Division recently concluded that the state's Cannabis Regulatory, Enforcement Assistance, and Modernization Act, commonly known as CREAMMA, implies a private right of action for applicants and employees alleging violations of its employment protections. The decision did not expand the statute's substantive protections. It changed who can enforce them by providing applicants and employees a direct path to court.Cannabis compliance increasingly depends on the purpose of the policy, the nature of the job, the type of cannabis use, the testing method, and the jurisdiction. Employers should review those components together rather than treating marijuana testing as a single, uniform compliance question.AI And Privacy: Accountability Follows The Decision Artificial intelligence is moving from an emerging consideration to an area of active regulation. The legal discussion increasingly focuses on how technology is used, how it is monitored, how it influences employment decisions, and who remains responsible for the outcome.The growing number of state and local laws regulating automated decision-making reflects that shift. Requirements vary, but recurring themes include disclosure, documentation, audits, human oversight, and accountability.Texas offers one approach.The Texas Responsible Artificial Intelligence Governance Act took effect at the beginning of 2026. Much of the law focuses on government entities and other specific applications, leaving most private employers with relatively limited direct obligations. The statute also generally uses an intent-based standard for prohibited discrimination rather than imposing liability based on disparate impact alone.Colorado illustrates how quickly AI regulation itself can change.After extensive stakeholder feedback, the state repealed its original Artificial Intelligence Act and replaced it with a narrower framework. The original law contemplated broad governance obligations, including a duty of reasonable care, risk management programs, impact assessments, and reporting related to algorithmic discrimination.The replacement focuses more specifically on automated decision-making technology that materially influences consequential decisions, including decisions involving hiring, promotion, compensation, discipline, and termination.The emphasis shifts toward transparency and human review. Employers using covered technology may need to provide notice, disclose information following adverse decisions, permit meaningful human review, and provide opportunities to correct inaccurate information.Connecticut adds another model, one that also illustrates the growing convergence of AI, employment law, and privacy.Beginning in 2027, employers using covered automated employment-related decision technology must provide advance notice and information about the technology's purpose and use of personal data. The law also reinforces that employers remain responsible for discriminatory outcomes involving AI, although evidence of bias testing and other proactive measures may become relevant when courts evaluate claims.Connecticut is also bringing AI into other areas of employment law. Effective October 2026, certain employers issuing WARN Act notices must disclose whether a plant closing or mass layoff relates to artificial intelligence or another technological change.The state's privacy law adds another layer. Amendments require covered organizations to disclose certain uses of personal data to train large language models and expand rights involving certain automated profiling decisions. Although comprehensive state privacy laws often exempt activities governed by the Fair Credit Reporting Act, their broader influence on organizational data governance remains significant.These developments point toward a practical governance model. Employers should identify where technology materially influences employment decisions, build required transparency into the process, document how systems operate and are monitored, establish meaningful human oversight, and regularly validate performance.Responsibility does not stop with the vendor. Even when a third party provides the technology, employers remain accountable for the employment decisions they make with it. Employment Authorization: Compliance In A Moving Environment Employment authorization presents a different compliance challenge.The Form I-9 process remains federal, but the environment surrounding it is changing quickly. Employment authorization, agency guidance, enforcement priorities, litigation, and state workplace protections can all affect employer obligations.Temporary Protected Status provides a clear example.Following a June 25 U.S. Supreme Court decision allowing the Department of Homeland Security to proceed with terminating certain TPS designations while litigation continues, USCIS issued multiple rounds of country-specific guidance and updated the M-274 Handbook for Employers.Employers should no longer assume that TPS-based Employment Authorization Documents receive the lengthy automatic extensions that may have applied in the past. Extension periods can change quickly based on the particular TPS designation, agency action, or litigation.Employers with employees known to rely on TPS-based employment authorization should monitor current country-specific guidance and align reverification with actual work authorization.The underlying Form I-9 rules remain important. When reverification is required, employees may present any valid document or combination of documents permitted by the Lists of Acceptable Documents. Employers should not demand a particular document or insist on a new Employment Authorization Document.Enforcement risk is also changing.For nearly three decades, employers relied on guidance distinguishing technical Form I-9 errors, which could often be corrected during an inspection, from substantive violations that could result in penalties. ICE has revised that framework and expanded the types of errors treated as substantive violations.Examples include missing employee dates of birth, incomplete Section 2 document information, missing employer representative information, deficiencies involving remote document examinations, and certain electronic Form I-9 system failures.That change increases the value of proactive internal audits and refresher training. Once an ICE inspection begins, the opportunity to correct some mistakes may already be gone.States are also becoming more active in the employment relationship surrounding immigration.Effective July 1, Indiana Senate Enrolled Act 76 creates a state enforcement framework targeting employers that knowingly or intentionally hire or continue employing unauthorized workers. The law does not alter federal Form I-9 requirements, but it gives the Indiana Attorney General authority to investigate and pursue significant penalties. Employers demonstrating reasonable diligence through E-Verify or other effective verification practices may be better positioned to defend against enforcement.Oregon took a different approach. House Bill 4111 protects employees who lawfully update their work authorization information and generally prohibits adverse action based on lawful changes in status. It also limits the use of immigration status in employment litigation unless necessary to establish a claim or defense.Colorado adds another layer. House Bill 26-1283 prohibits employers from requiring applicants or employees to surrender government-issued identity or work authorization documents and restricts the use of immigration status as a means of coercion.The law also raises an unresolved operational question because it addresses temporary retention of identity documents without clearly defining the term. Employers routinely review original documents during Form I-9 verification, leaving questions about how the provision may apply to brief document handling during the verification process.Colorado also requires employers to notify applicants and employees of their rights under the law and explain how to file a complaint.Employment authorization compliance increasingly requires ongoing monitoring, accurate Form I-9 practices, proactive auditing, awareness of state developments, and coordination among HR, legal, recruiting, and compliance.What Employers Should Watch Next The developments shaping the first half of 2026 span very different areas of law, but they point toward a common expectation: employers increasingly need to be able to explain how their hiring processes work and why particular decisions were made.That requires knowing which rules apply, building those requirements into the workflow, documenting judgment when individualized decision-making is required, and maintaining meaningful oversight when vendors or technology influence the outcome.It also requires adaptability.A compliance program built around today's rules can quickly fall behind tomorrow's legal landscape. The organizations best positioned for what comes next will be those that build processes capable of changing with it.The rules will continue to change. So will what compliance requires.