A monthly roundup of what's changing in HR, employment law, payroll, and compliance — curated for business owners.
May 2026
May 2026 brought significant regulatory developments that small and mid-size employers need to monitor closely. From new federal banking compliance requirements affecting worker verification to state-level workplace safety proposals and expanded liability protections, this month's updates span payroll compliance, workplace safety, and risk management. Here's what matters most for your business.
Payroll & Tax
New Federal Order Requires Banks to Flag Non-Citizen Tax ID Use in Payroll
A new executive order directs financial institutions to scrutinize banking activities involving Individual Taxpayer Identification Numbers (ITINs) used by non-citizens, with a focus on identifying potential payroll tax evasion and shell company operations. While the order stops short of mandatory citizenship verification, it increases oversight of employer payroll accounts and payment patterns. Banks may begin flagging unusual ITIN-related transactions to federal authorities.
Takeaway: Ensure your payroll processes are fully compliant and that you're properly classifying all workers — increased scrutiny means payroll irregularities are more likely to trigger audits.
What the Order Directs
The executive order instructs banks and financial institutions to apply additional scrutiny to accounts and transactions involving ITINs — the tax identification numbers used by non-citizens who are not eligible for a Social Security number. The focus is on patterns that suggest payroll tax evasion, unreported employment, or shell company arrangements being used to obscure who is actually being paid.
How This Affects Employers
Employers who process payroll through standard, properly documented channels have little to worry about. The risk is concentrated around off-book payments, payments made to personal accounts rather than through official payroll systems, or situations where multiple workers share a single ITIN. If your payroll is run cleanly — taxes withheld, deposits remitted on schedule, workers properly classified — you are not the target of this order.
What Good Compliance Looks Like
All workers should be on your official payroll with taxes withheld and remitted as required. I-9s should be complete for every employee. No cash payments or payments to personal Venmo/Zelle accounts in place of payroll. If any of those situations exist in your business, this is the moment to correct them — the window between policy change and enforcement action is typically short.
Employee Benefits
Federal Proposal Would Require Medicaid Work Requirements, Affecting Employee Benefits Planning
Federal regulators are moving forward with Medicaid work requirements that could result in millions of people losing coverage if they don't meet minimum work hour thresholds. This policy shift may increase the number of employees who need employer-sponsored health coverage or who seek full-time rather than part-time positions to maintain benefits. Employers in industries with variable-hour workers should prepare for potential changes in benefits enrollment.
Takeaway: Review your benefits communication strategy and be prepared for increased enrollment questions, especially from part-time or seasonal workers who may lose alternative coverage.
Who Would Be Affected
Medicaid work requirements would primarily impact workers earning less than 138% of the federal poverty level who currently rely on Medicaid for health coverage and don't receive employer-sponsored insurance. In industries like retail, food service, hospitality, and home care — where part-time and variable-hour schedules are common — a meaningful share of the workforce could fall into this category.
Implications for Employers
If employees lose Medicaid eligibility due to work hour requirements, some will look to employer-sponsored coverage as an alternative. Applicable Large Employers (those with 50 or more full-time equivalents) who don't already offer coverage to variable-hour employees meeting ACA thresholds may face increased pressure — or liability — if affected employees trigger an employer shared responsibility payment.
Smaller employers who offer voluntary coverage may see uptake increase. Either way, communication with your workforce about available benefits options will be important well before any enrollment window opens.
Timeline
This is still a federal proposal — implementation requires state cooperation and rulemaking. Some states already have work requirements in place from earlier waivers. Watch for updates from your state's Medicaid agency if you employ workers in multiple states, as timelines will vary.
A Florida appellate court issued a sweeping interpretation of a 2020 state law, granting rideshare companies like Uber and Lyft extensive immunity from liability claims. The ruling clarifies that gig platform companies receive unusually broad legal protections under Florida law. This decision may influence how other states approach liability questions for companies using independent contractor models.
Takeaway: If you operate in Florida or use contractor-based staffing models, consult legal counsel about how this expanded immunity might apply to your business structure and risk exposure.
What the Florida Law Does
Florida's 2020 Transportation Network Company law granted rideshare platforms a specific classification that shields them from most liability arising from driver conduct. The appellate court's ruling extended that protection broadly — meaning even in situations where a driver causes harm, the platform itself is largely immune from civil claims under Florida law. The court found the legislative intent was to give these companies unusually wide protection.
Why This Matters Beyond Rideshare
The ruling is significant for any business that relies on independent contractor or gig-based delivery of services in Florida. It signals that Florida's courts will read the 2020 statute expansively. For companies using contractor staffing models — delivery, care services, home repair, logistics — the ruling could limit liability exposure in Florida specifically.
Multi-State Note
This protection is specific to Florida and to companies that qualify under the Florida statute. Most other states, including New York, have no equivalent liability shield — and several states are moving in the opposite direction, tightening contractor classification standards. Don't assume this ruling affects your obligations outside Florida.
Workplace Safety
California Considers Ban on Quartz Countertops Over Silicosis Risk to Workers
California lawmakers are evaluating a potential ban on kitchen quartz countertops due to rising cases of silicosis, an incurable lung disease caused by inhaling silica dust during cutting and fabrication. Workers in countertop manufacturing, installation, and stone fabrication face the highest risk from crystalline silica exposure. The proposal reflects growing state-level attention to occupational health hazards in construction and manufacturing trades.
Takeaway: Employers in construction, fabrication, or stone-working industries should review their silica dust safety protocols and ensure proper respiratory protection and ventilation are in place.
Why Engineered Stone Is Particularly Dangerous
Engineered quartz countertops are manufactured from up to 93% crystalline silica — significantly higher than natural stone. When workers cut, grind, or polish these surfaces, they generate ultra-fine respirable silica particles that penetrate deep into lung tissue. Silicosis is progressive and incurable; in severe cases it is fatal. California has seen a cluster of cases among young countertop workers, prompting the legislative push.
Existing Federal OSHA Requirements
OSHA's silica standard already requires employers in affected industries to use engineering controls (wet cutting methods, on-tool exhaust ventilation), provide appropriate respiratory protection, offer medical surveillance for workers with significant exposure, and maintain exposure records. These rules apply regardless of what happens with California's proposal.
What Employers Should Do Now
If your workers cut, grind, drill, or otherwise disturb silica-containing materials — including quartz, granite, concrete, brick, or tile — your obligation to control exposure exists today under federal OSHA. Audit your current controls, confirm that wet methods or exhaust ventilation are in use, verify that respirators are properly fit-tested, and check that supervisors know the signs of silica overexposure. California's proposed ban is still under consideration and not yet law.
Workplace Safety
Understaffing at OSHA Highlights Need for Proactive Workplace Safety Programs
A report revealed that West Virginia has only six OSHA inspectors to cover 60,000 workplaces, following fatal incidents at facilities with previous violation histories. This severe understaffing means many employers may go years between inspections, but also means that when violations do occur, they often involve serious injuries or fatalities that trigger investigations. The gap underscores that employers cannot rely on external enforcement to identify hazards.
Takeaway: Don't wait for an OSHA inspection — conduct regular internal safety audits and address hazards proactively to protect your workers and avoid costly citations after an incident.
The General Duty Clause
Regardless of how often OSHA inspects your workplace, the General Duty Clause of the OSH Act requires every employer to provide a workplace free from recognized hazards that are likely to cause death or serious physical harm. This obligation exists whether or not an inspector ever shows up. Infrequent inspections don't reduce your legal exposure — they just mean the reckoning comes after an incident rather than before one.
Post-Incident Scrutiny Is Worse
When OSHA does show up, it's often because someone got seriously hurt or killed. Post-incident investigations are more thorough, more adversarial, and more likely to result in significant citations and penalties than routine inspections. A history of known, unaddressed hazards — especially if they were flagged in a prior inspection or an employee complaint — dramatically increases both penalty amounts and potential criminal referrals.
How to Structure an Internal Audit
Walk your worksite with a checklist specific to your industry's hazards. Involve frontline employees — they know where the real risks are. Document everything you find and track corrections to completion. Train supervisors to recognize hazard indicators and near-misses, not just reportable incidents. Review your OSHA 300 log quarterly rather than just at year-end. The goal is to find problems on your own schedule, not OSHA's.
As always, StaffPro is here to help you navigate these changes and keep your business on track. If you have questions about how any of these developments affect your organization, don't hesitate to reach out to your dedicated HR team.
This bulletin is provided for general informational purposes only and does not constitute legal advice. Employment laws vary by jurisdiction and are subject to change — consult qualified legal counsel before taking action based on any content in this publication.