What Employers Are Asking: January 2026

Each month, AEA compiles the most frequently raised questions from employers navigating the current regulatory environment. Here are the topics generating the most discussion as we enter Q1 2026.

1. What are the key compliance deadlines I should have on my calendar for Q1 2026?

The first quarter of the year is packed with recurring compliance obligations. Among the most critical for employers:

• W-2 and quarterly tax filings: Employers should check current IRS guidance for deadlines related to furnishing W-2 forms to employees, filing W-2s with the Social Security Administration, and filing Form 940 (federal unemployment tax) and Form 941 (employer's quarterly tax return). For 2026, the deadline to furnish W-2 forms to employees is February 2, due to January 31 falling on a Saturday, and the deadline for filing W-2s with the Social Security Administration is also February 2. Employers should verify the exact dates for the current filing year.
• OSHA Form 300A posting: The Summary of Work-Related Injuries and Illnesses generally must be posted in the workplace beginning February 1 and remain posted through April 30. Employers should confirm current OSHA guidance.
• ACA Form 1095-C furnishing: Employers should check IRS guidance for the current deadline to furnish ACA Form 1095-C to employees, as the IRS has in some years adjusted this date. Employers should verify the deadline with the IRS.
• ACA electronic filing with the IRS: Check IRS guidance for current deadlines for electronic filing of Forms 1094-C and 1095-C.
• Ongoing: State-specific deadlines for new hire reporting, unemployment tax filings, and paid leave program contributions vary by jurisdiction.

Employers should maintain a compliance calendar tailored to every state and locality where they have employees. Missing a single deadline can trigger penalties, even when the underlying obligation is well understood.

2. Do I need a formal AI policy for my workplace now?

The short answer is: increasingly, it may be advisable. While there is no single federal law mandating that all employers adopt an AI workplace policy, the regulatory direction suggests growing expectations. Employers should consult the EEOC's official communications for the most current guidance on AI-driven employment decisions. Some jurisdictions have enacted or are considering laws that may require employers to disclose AI use in hiring, conduct bias audits, or obtain consent before using automated decision-making tools. Requirements vary by state and locality.

Even where not strictly required by law, a formal AI use policy is becoming a best practice. A strong policy may address:

• Which AI tools are approved for use in HR and management functions.
• Employee and candidate notification requirements.
• Human oversight protocols for hiring, discipline, and performance decisions.
• Data privacy and security standards for AI systems that process employee information.
• Prohibited uses, such as using unapproved AI tools for employment decisions.

Employers do not need to ban AI — but they should consider governing it. A clear, written policy may protect the organization and provide a framework for consistent, lawful use. Employers should consult qualified counsel to understand the requirements applicable in their jurisdictions.

3. Have salary thresholds for overtime exemptions changed for 2026?

Employers should review the current status of federal and state salary thresholds for white-collar overtime exemptions. At the federal level, the Department of Labor's rulemaking on salary thresholds has been the subject of significant activity and litigation in recent years. Employers should check current requirements regarding salary thresholds, as rules and court orders may have altered the applicable thresholds.

Regardless of the federal landscape, many states maintain their own salary thresholds for overtime exemptions that may exceed the federal level. Requirements vary by state, and employers must generally meet the highest applicable threshold — federal, state, or local.

The practical advice for employers is straightforward: review the salary of every employee classified as exempt under the executive, administrative, or professional exemptions. Confirm that each employee's salary meets the highest applicable threshold. Where thresholds have increased, employers must either raise the salary to maintain the exemption or reclassify the employee as non-exempt and pay overtime accordingly. Employers should verify current thresholds with the Department of Labor and applicable state agencies.

4. My company has remote workers in multiple states. What do I need to know about tax obligations?

Multi-state remote work continues to create tax complexity for employers. When an employee works from a state other than where the employer is located, the employer may incur obligations including:

• State income tax withholding: Employers are generally required to withhold state income tax based on where the employee performs the work, not where the employer is headquartered. Some states have reciprocity agreements that may simplify this, but many do not.
• Unemployment insurance: Employers may owe state unemployment taxes in the state where the remote employee works if the work is localized there.
• Nexus and business taxes: Having employees in a state may create nexus for corporate income tax, franchise tax, or sales tax purposes, depending on the state's rules.
• Local taxes: Some cities and counties impose their own income taxes or employer payroll taxes that may apply to remote workers performing work within those jurisdictions.

Employers with remote workers in states where they had no prior presence should consult with a tax advisor to understand their registration, withholding, and filing obligations. The cost of retroactive compliance — including penalties and interest — can be substantial.

5. Are there any new remote work or hybrid work regulations I should know about for 2026?

While no single federal law governs remote or hybrid work arrangements, the regulatory environment around remote work continues to evolve at the state and local level. Employers should be attentive to developments in areas such as:

• Expense reimbursement requirements in states that may mandate employers cover necessary business expenses, including home office costs for remote workers.
• Workplace safety obligations for remote employees, which OSHA has generally declined to enforce for home office settings but which some state programs may address differently.
• Pay transparency and wage notice requirements that may be triggered when an employee works in a new jurisdiction.

Employers offering remote or hybrid arrangements should review their policies at least annually to ensure they reflect the current legal requirements in every state where remote employees are located. Consulting qualified counsel can help identify jurisdiction-specific obligations.

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This briefing is prepared by the AEA Editorial Team based on publicly available regulatory guidance, employment law developments, and employer-reported trends. Individual data from AEA members is never disclosed. All analysis reflects general observations and should not be treated as legal advice. Consult qualified counsel for guidance on specific situations.

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