Wages
States will continually change their wage laws depending on their unique economic outlook and the cost of living in the state. Here are some quick facts:
- Five states do not have a minimum wage: Tennessee, Alabama, Mississippi, South Carolina, and Louisiana
- The federal minimum wage is $7.25 per hour, and two states, Wyoming and Georgia, have state minimum wages set below this rate (though the federal rate still applies to most employers in those states)
- 22 states have legislation that will raise their state minimum wage at some point during 2026 (19 states did so on January 1; three more, plus the District of Columbia, are scheduled for later in the year)
Here are the states which have legislation to raise their minimum wage in 2026:
- Arizona: $12.15 to $15.15 per hour
- California: $16.50 to $16.90 per hour
- Colorado: $14.81 to $15.16 per hour
- Connecticut: $16.35 to $16.94 per hour
- Hawaii: $14.00 to $16.00 per hour
- Maine: $14.65 to $15.10 per hour
- Michigan: $12.48 to $13.73 per hour
- Minnesota: $11.13 to $11.41 per hour
- Missouri: $13.75 to $15.00 per hour
- Montana: $10.55 to $10.85 per hour
- Nebraska: $13.50 to $15.00 per hour
- New Jersey: $15.49 to $15.92 per hour
- New York: $16.50 (New York City, Nassau, Suffolk, and Westchester Counties) / $15.50 (Upstate) to $17.00 (New York City, Nassau, Suffolk, and Westchester Counties) / $16.00 (Upstate) per hour
- Ohio: $10.70 to $11.00 per hour
- Rhode Island: $15.00 to $16.00 per hour
- South Dakota: $11.50 to $11.85 per hour
- Vermont: $14.01 to $14.42 per hour
- Virginia: $12.41 to $12.77 per hour
- Washington State: $16.66 to $17.13 per hour
Leave
Several states have changed or expanded their leave-taking laws in 2026. Here are some of the major ones:
California
California has expanded employee protections for victims of qualifying crimes through AB 406, effective January 1, 2026. Employees who are themselves victims, or who have a family member who is a victim, of a violent felony, serious felony, or felony theft or embezzlement are now entitled to take time off to attend judicial proceedings related to the crime, including post-arrest hearings, plea agreements, sentencing, and post-conviction matters. Employees may also use paid sick leave for these purposes. Note: the previously reported expansion of California’s Paid Family Leave program to include care for a “designated person” does not take effect until July 1, 2028.
Colorado
Colorado has expanded its FAMLI (Family and Medical Leave Insurance) program to provide up to 12 additional weeks of paid Neonatal Care Leave for parents of newborns receiving inpatient care in the NICU. Critically, this leave is in addition to the 12 weeks of parental bonding leave already available under FAMLI, meaning a parent with a NICU baby could qualify for up to 24 weeks of total paid leave.
Connecticut
Connecticut has lowered the threshold of organizations required to offer paid sick leave to 11 or more employees, down from 25 in 2025. This will drop to 1 employee in 2027.
Delaware
Delaware’s new Paid Family and Medical Leave program launched on January 1, 2026, providing up to 12 weeks of paid parental leave and up to 6 weeks of paid leave for an employee’s own serious medical condition or to care for a seriously ill family member. Coverage requirements vary by employer size: organizations with 10 to 24 employees are only required to provide parental leave, while organizations with 25 or more employees must provide the full suite of benefits including medical and family caregiver leave.
Minnesota
Minnesota’s new Paid Leave program took effect January 1, 2026, covering nearly all employers regardless of size. It provides up to 12 weeks of paid medical leave for an employee’s own serious health condition and up to 12 weeks of paid family leave (for bonding with a new child, caregiving, military exigency, or personal safety situations such as domestic violence). These are two separate categories of leave, not an either/or choice. Employees may use both in the same benefit year, but the combined total is capped at 20 weeks.
Washington
Employers in Washington are now required to accommodate and provide leave to employees who are victims of hate crimes, or who have a family member who is a victim. This leave is primarily unpaid, though employees may use accrued paid sick leave for qualifying absences. Employers must also provide reasonable safety accommodations for affected employees absent undue hardship.
Technology and AI
Some states have enacted new laws around AI use which may enhance or supersede your organization’s handbook:
Colorado
Colorado’s AI Act (SB 24-205) would require organizations using AI systems to follow transparency, impact assessment, and documentation obligations aimed at preventing algorithmic discrimination. However, the law’s status is currently unsettled: its effective date was already delayed from February 1 to June 30, 2026, and as of late April 2026, a federal court has issued a stay pausing enforcement while legal challenges and legislative revisions are considered. Organizations with operations in Colorado should monitor this law closely, as its final form and enforcement timeline remain in flux.
Illinois
Employers in Illinois who use AI for hiring, recruitment, or performance tracking are now required to disclose the nature of AI usage to job applicants and employees. The law also prohibits organizations from using AI in a way that results in discrimination based on protected characteristics.
Texas
The Texas Responsible Artificial Intelligence Governance Act (TRAIGA), effective January 1, 2026, takes a narrower approach than some other state AI laws. Rather than imposing broad compliance frameworks, it focuses on prohibiting specific intentional misuses of AI — including behavioral manipulation, the creation of unlawful deepfakes, social scoring by government agencies, and infringement of constitutional rights. Organizations that develop or deploy AI systems reaching Texas residents should review TRAIGA’s prohibited practices and disclosure requirements.
Additional considerations for nonprofits
Contractors and freelancers
The growth of the so-called “gig economy” has led to greater adoption and usage of temporary or freelance employees. While this can be a boon to nonprofits, it can also create compliance issues. Although most new state laws, such as California’s AB 578, are focused on delivery drivers or rideshare workers, there is also more legislative pressure to offer freelancers similar protections to full-time employees.
Volunteers
This can also apply to volunteers, who occupy a crucial role at many nonprofits and sometimes will, on a limited basis, assist with work that could be considered infringements of the rights of certain employees. For example, if a volunteer does work that is traditionally done by a paid employee, this could result in allegations of wage theft or discrimination.
Having these boundaries clearly marked out in your employee handbook and ensuring that it is available to everyone who works or volunteers for your organization can help you avoid these issues.
501(c) Services can help you stay on top of these changes
As the political and economic landscape shifts, it can be invaluable to have a partner who understands the pressures of nonprofit HR compliance. Our team of experienced professionals can help you determine which changes you need to focus on and how to prepare for them, freeing you up to continue your organization’s mission. If you would like to learn more about our work, please get in touch with us today.
Important Notice: Employment and labor laws change frequently, and the landscape can shift quickly — as illustrated by several of the AI laws discussed above. While we have made every effort to ensure the accuracy of the information in this article as of the date of publication, readers should independently verify any information before relying on it. This article is intended for general informational purposes only and does not constitute legal advice. 501(c) Services is not a law firm and does not provide legal counsel. Organizations should consult a qualified employment attorney regarding their specific compliance obligations.
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The information contained in this article is not a substitute for legal advice or counsel and has been pulled from multiple sources.
(Images by Mohdizzuanbinroslan and Freepik)
