As we head toward 2026, HR departments are focused on mandatory changes that will affect everything from how much you save for retirement to when you can take paid time off. These shifts aren’t just company perks—they’re mandated or strongly influenced by new federal and state legislation.

1. Mandatory Paid Family and Medical Leave Expands
The biggest change in state-level policy is the expansion of Paid Family and Medical Leave (PFML) insurance programs. This moves the U.S. closer to providing mandatory paid time off for life events.

• What’s Changing: In several states (including Minnesota, Delaware, and Maine), state-mandated PFML programs are scheduled to begin paying benefits in January 2026 (or shortly thereafter). These laws typically provide eligible employees with several weeks of partial wage replacement for events like welcoming a new child, recovering from a serious illness, or caring for a sick family member.
• The Impact: This means workers in these states will gain access to paid, job-protected leave that they previously did not have, often funded through mandatory payroll contributions from employers and/or employees.
• What HR is Doing: HR teams are scrambling to set up state payroll contributions, update employee handbooks, and train managers on coordinating the new state benefits with existing company-provided PTO.

2. Retirement Savings Get a “Roth-Only” Rule for High Earners
Thanks to the SECURE 2.0 Act, a major change is coming to the tax treatment of retirement savings, primarily affecting high earners.

• What’s Changing: Beginning in 2026, employees who are age 50 or older and whose prior-year wages were over a certain limit (projected around $150,000) will be required to make all of their “catch-up” contributions to their 401(k) on a Roth (after-tax) basis.
• The Impact: If you are a high earner age 50 or older, you will lose the option to make pre-tax catch-up contributions. This is a crucial tax planning shift.
• Contribution Limits Are Up: On a positive note, the total maximum contribution limit for most 401(k) plans (and the catch-up contribution limits) are projected to increase for 2026 due to inflation indexing, allowing everyone to save more overall.
• What HR is Doing: Companies must update their payroll systems to track employee wages and age to ensure compliance. Failure to comply means the plan could be prohibited from accepting any catch-up contributions from those employees.

3. HSA and Dependent Care Limits are Increasing
The limits for common tax-advantaged accounts are projected to increase, allowing you to save more pre-tax dollars.

• Health Savings Accounts (HSAs): Contribution limits for HSAs are projected to rise for both self-only and family high-deductible plans.
• Dependent Care Flexible Spending Accounts (DCAP/DCFSA): The maximum contribution limit for these accounts (used for childcare expenses) is projected to increase significantly for 2026. This allows working parents to shelter more income from taxes to pay for expenses like daycare and summer camp.
• What HR is Doing: HR is finalizing these updated figures to communicate during annual Open Enrollment and adjusting payroll systems accordingly.
  Your HR team is focused on helping you prepare for these shifts so you can maximize your benefits and ensure you’re compliant when the new year rolls around.