Employment rules and regulations are changing every year. HR and benefits leaders need to stay up-to-date on these changes to employment laws, payroll standards and benefits from both the federal and state levels.

Preparing for what’s ahead is key if you want to remain in compliance. Doing so will help you not only avoid stiff potential penalties but also protect your company’s brand, its bottom line and its people.

Here are some of the top things that HR and benefits leaders should prepare for in 2026.

Increasing Healthcare Thresholds

The annual contribution limits for Health Savings Accounts (HSAs) are increasing for 2026. The IRS announced that individual contribution limits will be $4,400, with family plans increasing to $8,750.

In addition, the out-of-pocket maximums for health insurance plans will also increase per the Affordable Care Act.

For HR and benefits leaders, you need to review your current benefits plans and ensure that they still qualify as high deductible health plans (HDHPs). Update any plan documents if necessary and then community any changes you’re making to the plan to your employees.

Potential Increase in Minimum Wage

For now, the federal minimum wage will remain the same as it’s been. However, it’s important to keep an eye on legislation, as a proposed bill would increase this to $10.59 per hour, if passed, and it would go into effect on January 1.

In addition, there are some states that already have scheduled increases to their minimum wage on the books. This includes Hawaii, Delaware and Michigan.

Make sure that your local laws aren’t changing in terms of minimum wage or other wage-related laws. If they are, update your books and adjust salaries, if need be.

If you run a company that operates in multiple states, consider creating a multi-state matrix of all relevant wage laws so you never miss anything.

New Tax Rules

There are many new payroll and tax changes that are set to go into effect in 2026 because of federal laws.

For instance, the 1099-MICS and 1099-NEC threshold will increase from $600 per year to $2,000 per year. The paid family leave tax credit will become permanent, which will reward any employer that pays at least 50% of their employee’s wages when they take leave.

In addition, the contribution limits to a Dependent Care FSA will increase from $5,000 to $7,5000. Depending on the size of your company, the employer-provided childcare credit could increase to 40% and 50%.

Before 2026 arrives, it’s important that you review all these changes and update your systems to reflect them.

Worker Classifications

There have been many proposals to change how joint employers, exempt employees and independent contractors are defined. This has received extra attention in recent years, as an increasing number of workers have taken on freelance work and the gig economy has expanded.

While there’s no definitive changes on the books just yet, there are proposals that are pending that could take effect next year. If they pass, they would provide 1099 workers, gig and contract workers and those in hybrid environments with extra protections.

From an employer standpoint, it’s important to review all of your job classifications, vendor relationships and contractor agreements now. Check to make sure you haven’t misclassified anything, because you could be liable for huge damages in the form of tax penalties and back pay, among other things.

I-9 Compliance

The Department of Homeland Security has strengthened I-9 compliance rules, and many deadlines are upcoming early in the new year.

As of March 31, 2026, all employees are required to physically re-examine I-9 documents that were completed when remote rules were in place for the COVID-19 pandemic. All employers have to be fully compliant with physical inspections done in-person or through remote procedures that require live video calls and E-Verify enrollment.

All companies are also required to update their platforms by July 31 of 2026 if they are using electronic systems for I-9 verification.

Data Security

Along the same lines, data security has taken on new importance in recent years. All companies hold and store a certain amount of sensitive data — whether that be on their employees, customers or both.

To ensure they stay in compliance with data privacy and security laws, companies should audit how they store data, who has access to it and how it’s shared, if at all. Make sure to update your systems and your company manuals to reflect any changes that have been made.

It’s also a good idea to review your company’s privacy policies so they are in compliance with the most up-to-date privacy mandates.

Beckham Ellis Insurance Group Can Help You Get Audit Ready for 2026

There are many changes on the horizon in 2026, from employment and wage laws, to I-9 verification and data security, to HSA contributions and out-of-pocket maximum limits.

All of these changes can be quite hard for even the most seasoned HR and benefits leaders to stay on top of as a new year approaches.

When you work with Beckham Ellis Insurance Group, you can ensure that you’re audit ready for 2026. We have the expertise and the know-how to help you review your current standards, policies, benefits and systems and help you make updates and changes where necessary.

If you’re in the South Carolina or Georgia region, contact us today to learn more.