2026 has been a big year for regulatory change, with some recent developments carrying significant implications for individuals and employers alike. From the rescheduling of marijuana to I-9 penalties to potential changes for staffing agencies, we want to cover three important developments and discuss what they mean for U.S. employers.
1. Cannabis Officially Rescheduled
…at least partially.
On April 23, 2026, the DOJ ordered that cannabis subject to a state medical marijuana license be immediately reclassified to a Schedule III substance.
To emphasize and reiterate, this order only applies to state-licensed medical cannabis. However, the DOJ has called for proceedings for the rescheduling of all cannabis to resume. A new administrative hearing is scheduled for June 26, 2026.
Among the reasons for this change is the ability to research this substance without federal scrutiny. Acting Attorney General Todd Blanche has this to say:
“This rescheduling action allows for research on the safety and efficacy of this substance, ultimately providing patients with better care and doctors with more reliable information.”
Implications for Employers
It seems that this change primarily achieves the following:
- Allows for FDA-approved research and potential pharmaceutical development
- Changes tax treatment for cannabis business
However, it does not necessarily:
- Create federal employment protections for users
- Override employer drug-free workplace policies
As the administrative/legal process unfolds, there will likely be greater clarity and more proposed change. It seems the winds are currently blowing in the direction of less federal restriction of cannabis.
2. New Rules on Form I-9 Violations
The U.S. Immigration and Customs Enforcement (ICE) has tightened its approach to Form I-9 violations.
In March of 2026, ICE made key changes, superseding some provisions that had been in effect since 1997. Such changes include:
- Several error categories have been reclassified as substantive violations subject to immediate fines (between $288 and $2,861 per form), whereas before they were correctable.
- Errors found during an audit but not remediated carry stricter penalties than if no audit were carried out.
Here is a link to the updated I-9 fact sheet detailing the substantive paperwork violations.
Implications for Employers
In short, there is less room for error in the I-9 process. Penalties are stricter, and there is less ability to correct retroactively. This change comes in the wake of increased enforcement and audits in early 2025. Employers are strongly encouraged to:
- Proactively conduct internal I-9 audits
- Improve training on the process
- Correct any errors properly
3. New Joint Employer Rule
In April of 2026, the Department of Labor proposed a new rule clarifying joint employer status under the Fair Labor Standards Act (FLSA), FMLA, and MSPA.
To determine whether a company is a joint employer, the following questions are considered:
- Who hires and fires the employee?
- Who supervises and controls the conditions/schedule of employment to a substantial degree?
- Who determines the rate and payment method?
- Who maintains employment records?
Under the new rule, you are only considered a joint employer if you possess and exercise “substantial and immediate control” over an employee. Many companies view this as a positive change from the 2023 rule.
Implications for Staffing Agencies
Among the companies most affected by joint employer regulation are staffing agencies. However, this rule seems to be a net positive.
It seems these changes make agencies and their clients less likely to be considered joint employers, thereby removing some of the risk assumed since 2023.
That said, this is federal guidance and does not preempt state law. Unlike other legislation, such as the FCRA, this joint employer rule does not exclude states from setting their own specific requirements. States such as California, New Jersey, and Massachusetts have tighter rules regarding joint employment.
Summary
2026 has been a busy year for employment and labor regulatory updates so far, and it seems as though even more significant change could be on the horizon. Staying up to date on these changes can make a world of difference in an evolving employment landscape. We recommend keeping a close eye on state and federal legislation to better inform your policies and procedures, remaining compliant every step of the way.