PREDICTIONS FOR 2026
2025 PREDICTIONS RECAP
INTERNATIONAL
AI Governance Frameworks Will “Go Light” to Encourage Innovation Despite the fact that 2025 saw stricter AI regulations, the new global trend in 2026 will focus on advancement and voluntary guidelines rather than mandatory guardrails. Notably in the Asia- Pacific (APAC) region, Japan, Singapore, India, and Australia are making moves that encourage AI use and attract investment while also addressing safety and transparency. In fact, we predict the stringent EU AI Act will not become a global model and most jurisdictions will diverge rather than align. EU Pay Transparency Directive Will Trigger Mass Pay Restructuring and Litigation Companies with 100+ employees must report gender pay gaps and disclose salary ranges in job postings by June 2026. A significant portion of EU companies will face pay equity challenges using “work of equal value” assessments – a complex methodology most have never implemented – triggering widespread audits and litigation by 2027. Expanded Rights for Digital Platform Workers EU member states will need to adopt a new directive before the end of 2026 that seeks to curb worker misclassification, ensure algorithm transparency, and enhance working conditions and data protection
for individuals engaged in platform work, including freelance, on-demand, and gig work. A large proportion of the EU’s 28 million platform workers will be reclassified as employees by 2027-2028, creating hundreds of millions – to potentially billions – in euros of back-pay liabilities in social security contributions, minimum wage violations, and benefits. Global Whistleblower Protection Trend Will Create “Race to the Top” in Corporate Compliance Global whistleblower claims will substantially increase as employees test strengthened protections – Japan now criminalizes whistleblower retaliation, EU has boosted protections, and Singapore, China, and India introduced enhanced frameworks. Multinationals will increasingly
We correctly predicted that AI’s role in employment – especially in hiring, performance management, and data analytics – would see strict oversight in more countries. The EU’s AI Act inspired similar legislation elsewhere, with mandatory disclosures when AI is used for workplace decision-making. Under an Italian law that took effect in May, for example, companies must inform workers when AI tools are used in recruitment, performance evaluation, or management. And a law in South Korea that takes effect in January 2026 sets certain criteria for “high impact AI” – which includes recruitment. More AI Transparency for HR and Hiring Tools Pay equity efforts had already seen significant momentum in the EU and UK – and we correctly predicted 2025 would bring a surge in similar laws. Notably, EU Member States now have until June 2026 to incorporate a directive aiming to close the gender pay gap into national laws. The directive establishes certain minimum pay equity and pay transparency requirements, which means Member States may set additional obligations that you’ll also need to review. Many US states and cities also joined the pay transparency trend – signaling more global activity in this area in 2026 and beyond. Enhanced Pay Equity and Transparency Rules We correctly predicted that the global trend on promoting employee well-being, including mental health, would move from being a perk to a mandated corporate responsibility in many countries. For example, Singapore passed a bill in January prohibiting workplace discrimination based on mental health conditions, and a law in Brazil that took effect in May requires employers to assess psychosocial risk factors for employees in their workplaces. The EU also started an initiative in May to explore ways to improve mental health in the workplace. Prioritizing Employee Well-Being and Mental Health
adopt the strictest standards globally to avoid compliance fragmentation. Meanwhile, ESG investors will demand whistleblower protection audits as governance metrics.
Nan Sato, CIPP/E, CIPP/C Philadelphia/New York/Tokyo Partner, Co-Chair
William D. Wright Philadelphia/Washington, D.C. Partner, Co-Chair
OUR PREDICTIONS WERE CORRECT
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