WAGE AND HOUR
PREDICTIONS FOR 2026
2025 PREDICTIONS RECAP
Look for Portal-to-Portal Act Litigation We expect to see a substantial uptick in litigation where employees undergo security, wait time, and walk time under the Portal-to-Portal Act (PTPA). While not all state wage statutes explicitly incorporate the PTPA, the last five years have seen numerous courts clarify whether it applies to state laws – or provides broader coverage. Major retailers and entities with warehouse presences have faced the most heat. We expect some states will try to clarify whether they follow the PTPA in 2026. Minimum Wage Will Continue to Rise Several states will increase their minimum wages in 2026 – well above the $15 range in some locations – particularly in the Midwest. Additionally, DC’s minimum will be more than double the federal requirement at $18.00, and California’s minimum will go up to $16.90. We project that increases will remain local and at the state level rather than from the federal government. Opinion Letter Program Will Grow The Trump administration revamped the DOL’s opinion letter program in 2025, encouraging businesses to submit their questions about how various laws apply to their specific working situations. The compliance assistance effort is likely to continue to grow throughout 2026 and companies should expect more guidance materials from the DOL in the coming year.
We correctly predicted a few major reversals by the Trump DOL: It paused legal battles over the Biden-era overtime rule – which would have raised the salary threshold for the so-called “white collar” OT exemptions to $59k. As we predicted, the threshold will remain $35k for now, and the DOL plans to tweak its OT regulations eventually. It dropped the Biden-era independent contractor standard by freezing litigation over the rule in May while it works to rewrite the standard. The wage division was due to issue a new IC proposal in September, which was likely sidelined by the government shutdown. It advanced a regulation to clarify joint employment under the Fair Labor Standards Act and plans to issue a proposal by the end of 2025 – but expect delays given the shutdown. New Administration Returned to Employer-Friendly Rules We thought business groups would file lawsuits against Biden-era rules – and we were right. Several continue to pend in courts across the country. Most activity has been paused while the Trump administration works through the regulatory process to undo the rules. The Trump administration did halt enforcement of the Biden-era independent contractor rule, one of the few regulations that wasn’t blocked in court. Business Groups Filed More Lawsuits We thought we’d see White House support for an incremental rise to the $7.25 federal minimum wage, but President Trump himself hasn’t endorsed a hike. We have seen Senators Peter Welch (D-Vt.) and Josh Hawley (R-Mo.) introduce a bill to raise the federal minimum wage to $15 per hour, while Sen. Bernie Sanders (I-Vt.) and Rep. Bobby Scott (D-Va.) offered legislation to boost the minimum wage to $17. Federal Minimum Wage Hike Hasn’t Panned Out
Increased Enforcement at State Level and Federal Enforcement Focus on Business-Friendly Initiatives States with robust wage and hour and wage payment laws (e.g. CA, IL, NJ, NY, WA), will continue to aggressively enforce their laws during a period when DOL enforcement activities may decline (in part, due to a reduction in the number of investigators). On the other hand, expect federal enforcement to continue to take a business-friendly approach. We also saw the DOL step back from issuing liquidated damages while reviving the Payroll Audit Independent Determination (PAID) program (allowing employers to self-audit and resolve certain FLSA violations) in 2025. Employers should keep in mind that resolution of wage and hour issues with DOL does not cut off employee rights under other state or local laws, so expect plaintiffs to seek their recovery at that level. AI’s Role Will Throw Wage and Hour For a Loop Artificial intelligence technology will have a substantial impact on wage and hour issues, including FLSA exemption status. If AI ends up substituting “independent judgment” under the administrative employee exemption, or the introduction of robots and AI reduces headcount so that an individual is no longer supervising two or more full-time employees, workers could lose eligibility for the executive employee OT exemption.
Kathleen McLeod Caminiti New Jersey/New York Partner, Co-Chair
J. Hagood Tighe Columbia Partner, Co-Chair
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