Quick Hits

• SEVP issued Broadcast Message 2608-01 on August 12, 2026, signaling heightened scrutiny of CPT authorizations that may not satisfy regulatory requirements.
• Broadcast Message 2608-02, issued August 24, 2026, provides additional Q&A guidance on when practical training is considered “integral” to an established curriculum.
• Both messages are directed at DSOs and SEVP-certified schools rather than employers, and they do not create new regulations or alter existing CPT requirements.

On August 12, 2026, SEVP issued Broadcast Message 2608-01 to DSOs at SEVP-certified schools, reminding them of their obligations when authorizing CPT. The message notes an increase in CPT authorizations that may not satisfy regulatory requirements, particularly where the training is not integral to an established curriculum or directly related to a student’s major area of study, and indicates SEVP may request documentation to confirm the curricular basis for an authorization.

On August 24, 2026, SEVP issued a follow-up guidance document, Broadcast Message 2608-02, with additional questions and answers addressing how SEVP assesses whether practical training is integral to a curriculum. The guidance distinguishes CPT from Optional Practical Training (OPT), noting that CPT guidance focuses on whether practical training is a required component of the curriculum, and states that formal DSO authorization and Student and Exchange Visitor Information System (SEVIS) record updates are required before a student begins CPT.

According to the client alert, the two broadcast messages constitute agency-level guidance rather than a new rule or final agency action, and they do not alter existing CPT regulations. SEVP has indicated it will scrutinize CPT authorizations more closely where it suspects abuse, while acknowledging that schools, not the federal government, define degree requirements.

The guidance is directed at DSOs and their institutions rather than employers and creates no new compliance obligations for employers directly. However, employers may want to be prepared to provide detailed documentation establishing that they will provide a quality practical training experience related to the student’s major area of study.

Ogletree Deakins’ Immigration Practice Group will continue to monitor developments and will post updates on the Higher Education and Immigration blogs as additional information becomes available.

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Ogletree Deakins’ Traditional Labor Relations Practice Group is pleased to announce the publication of the Summer 2026 issue of the Practical NLRB Advisor. This issue discusses the latest news from the National Labor Relations Board (NLRB) in the wake of a year-long period that the five-member Board lacked the statutorily required three-member quorum due to unfilled vacancies.

Even following this extended period when the Board did not have the authority to issue decisions, with two Board vacancies and the three current members divided 2-1 on most major issues, the NLRB could not tackle any controversial cases since three votes are typically required to overturn precedent. This situation lasted another seven months beyond January of 2026, until a fourth Board Member, James Macy, was sworn in on August 17. Thus, for over nineteen months, we have seen no significant policy developments coming from the Board.

Although the Board has largely been in hibernation for an extended period, the federal courts have been particularly active in areas that directly impact the Board. The overarching theme of these court decisions has been one of limiting the authority of federal agencies and increasing judicial scrutiny of their activity. These developments in administrative law have raised serious questions as to whether so-called “independent agencies” are constitutionally viable at all.

To date, much of the judicial re-assessment of administrative law has centered on the policy-making and administrative functions of federal agencies, boards, and commissions. Of equal and arguably greater concern and practical impact is the judicial function of many of these federal entities. The NLRB has its own complete judicial system, but in the wake of Trump v. Slaughter, it is only logical to ask if this system may not pass constitutional muster. Justice Gorsuch clearly previews this question in his concurring opinion in Slaughter in which he notes that the Court must “finish the journey [it] start[s] today” and must restore judicial power to the federal courts. This may well portend a complete re-examination of the NLRB’s system of adjudication and the administrative law theory that has delegated such authority to federal agencies. As Justice Gorsuch further noted: “We have tolerated [such] adventurous theories long enough.”

We hope you will enjoy this issue of the Practical NLRB Advisor on the latest developments at the NLRB. We will issue the next edition in the coming months. Please let us know if you have any questions.

Ogletree Deakins’ Traditional Labor Relations Practice Group will continue to monitor developments and will provide updates on the Traditional Labor Relations blog.

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Quick Hits

• The IRS unveiled a new set of detailed FAQs on August 6, 2026, that supersede FAQs that were posted on January 23, 2026, regarding taxation of tips and overtime pay under 2025’s omnibus spending bill.
• The new FAQs provide information concerning the definition of qualified overtime, eligibility for the deduction, tax withholding obligations, and reporting and correcting qualified overtime on year-end tax forms.  
• The “no tax on tips and overtime” provisions are set to expire on December 31, 2028.

In July 2025, President Donald Trump signed an omnibus spending bill that specified no taxes on tips and overtime pay through December 31, 2028. These provisions are available whether the worker itemizes or takes the standard deduction.

Qualified Overtime Deduction

The FAQs clarify that overtime compensation not required by the Fair Labor Standards Act (FLSA) is not eligible for the tax deduction. To deduct qualified overtime, an employee must be covered by the FLSA and must not qualify for an overtime exemption, such as the one for executives, administrators, and professionals. 

Business owners who own at least 20 percent of their business and actively participate in management generally are not eligible to deduct qualified overtime because they are considered exempt executive employees under the FLSA. Individuals who own less than 20 percent of their business may qualify for the overtime deduction if they are not covered by a different overtime exemption.

Qualified overtime is limited to the premium portion of overtime pay required under the FLSA—i.e., the 0.5 premium amount. Other types of overtime, such as overtime required by state law or a collective bargaining agreement, or overtime paid voluntarily by employers, are not eligible for the tax deduction. The qualified overtime portion can be calculated as the total FLSA hours worked over forty in a workweek, multiplied by one-half, multiplied by the employee’s regular rate of pay. 

For the tax year 2025, employers were not required to include qualified overtime pay on year-end tax forms, including Form W-2. Beginning in 2026, these amounts must be included on year-end tax forms for workers to claim the overtime deduction. Generally, these amounts will be reported on Form W-2 in box 12, using code TT. Employers must correct a Form W-2 if they discover an error made in the Form W-2 box for the total overtime calculation.

Employees are instructed to request a Form W-2c from their employers if they believe the employer omitted or understated the amount of qualified overtime compensation on the employee’s Form W-2. The employee is not entitled to a qualified overtime tax deduction that differs from the amount of qualified overtime compensation reported on the employee’s Form W-2.

The FAQs clarify that employers “may not reduce withholding on wages to account for the qualified overtime deduction unless the employee furnishes the employer an updated and valid Form W-4 accounting for the employee’s expected deduction for qualified overtime compensation.”

Independent contractors may only receive qualified overtime if they are considered employees under the FLSA, while still being classified as independent contractors for IRS purposes, a circumstance the IRS deemed “rare.”

Tipped Occupations

In April 2026, the IRS released final regulations to expand the list of specified occupations that “customarily and regularly” receive tips, such as bartenders, waiters, cooks, gambling dealers, musicians, baggage porters, and concierges. The expanded list now includes app/platform delivery people, visual artists, floral designers, gas pump attendants, pet and show animal caretakers, and eyebrow and eyelash technicians.

Employees in those occupations may deduct up to $25,000 per year in tips. This applies to taxable years beginning after December 31, 2024, and before January 1, 2029.

Next Steps

The new FAQs provide helpful guidance for employers and employees to remain compliant with federal tax laws. Looking ahead, employers may wish to stay abreast of any new developments or guidance that could be forthcoming. The U.S. Congress could choose to pass new legislation to extend the provisions for no tax on tips and overtime pay beyond 2028.

Ogletree Deakins’ Employment Tax Practice Group and Hospitality Industry Group will continue to monitor developments and will post updates on the Employment Tax, Hospitality, and Wage and Hour blogs as additional information becomes available.

This article and more information on how the Trump administration’s actions impact employers can be found on Ogletree Deakins’ Administration Resource Hub.

Michael K. Mahoney is a shareholder in Ogletree Deakins’ Morristown office.

Stephen Kenney is an associate in Ogletree Deakins’ Dallas office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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Quick Hits

• On June 5, 2026, FinCEN and several other federal agencies issued a joint advisory highlighting fraud typologies and suspicious activity linked to unlawful employment and employers, including immigration-related schemes.
• The Treasury Department is expected to propose revisions to the Bank Secrecy Act related to customer due diligence requirements, as well as updates to customer identification program rules to address foreign consular identification cards.
• On June 8, 2026, the CFPB issued a statement reminding creditors that a consumer’s immigration status, lawful presence, employment authorization, and factors that may indicate risk of removal may be considered as part of a lender’s ability-to-repay analysis, tying these factors to credit underwriting decisions.

Executive Order 14406, titled “Restoring Integrity to America’s Financial System,” signals increased federal scrutiny of banking activity that may be linked to unauthorized employment, employers of non-work authorized individuals, tax and identity fraud, and cross-border movement of funds. The executive order directs agencies such as the U.S. Department of the Treasury, the Financial Crimes Enforcement Network (FinCEN), and the Consumer Financial Protection Bureau (CFPB) to review existing rules and consider additional measures or changes to the implementing regulations of the Bank Secrecy Act (BSA). As a result, banks and other financial institutions have received additional guidance and advisory statements from federal agencies and regulators, and these institutions should expect greater focus on immigration-related factors in their compliance and risk management programs.

Several agencies have already taken initial steps to implement the executive order’s objectives. On June 5, 2026, FinCEN, the Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), National Credit Union Administration (NCUA), and Internal Revenue Service (IRS), issued a joint advisory outlining potential warning signs associated with unlawful employment schemes. These include the use of stolen identities, shell companies, off-the-books payroll practices and payroll tax evasion, staffing arrangements, and the use of foreign identity documents or Individual Taxpayer Identification Numbers (ITINs), as they may be designed to conceal unauthorized workers and related unlawful activity.

Treasury is also expected to propose regulatory updates to customer due diligence and account-opening requirements, including potential changes affecting customer identification program requirements and the use of foreign consular identification cards. While FinCen’s joint advisory provides nearly twenty examples of red flag indicators related to fraud schemes associated with unauthorized employment of foreign nationals, including some related to the use of ITINs, it reminds financial institutions that a red flag should not be considered in isolation and that no customer type presents a specific level of risk or risk profile.

The administration’s focus also extends to consumer lending. In a June 8, 2026, statement, the CFPB reminded lenders that existing law requires them to assess a consumer’s ability to repay prior to offering mortgages and other types of credit. The CFPB noted this obligation may include considering a borrower’s immigration status and employment authorization if those factors could affect future income, particularly if removal from the United States could impact the borrower’s income. For example, a lender may consider an individual’s immigration status, lawful presence, and work authorization as factors that might indicate risk of removal, as it relates to a borrower’s income from employment and repayment capacity. The CFPB also reminded lenders that there are a variety of immigration statuses and emphasized that lenders cannot assume different statuses have the same ability to pay.

Key Takeaways

Employers and foreign nationals may encounter additional questions or documentation requests when opening accounts or applying for credit, particularly where immigration-related factors are relevant to a bank’s risk assessments, due diligence, and identification obligations.

Employers should monitor upcoming regulatory developments and may want to consider reviewing workforce and identity verification practices in anticipation of heightened scrutiny.

Ogletree Deakins’ Financial Services Industry Group and Immigration Practice Group will continue to monitor developments and will post updates on the Immigration blog as additional information becomes available.

For additional insight into the critical immigration issues facing employers today, please join our Virtual Immigration Insights Symposium on Wednesday, October 7, 2026, from noon to 2:30 p.m. ET. Register here.

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Quick Hits

• Extreme heat hit at least ten states during the last two weeks of August 2026.
• Employers are legally obligated to provide a workplace free of hazards that could cause serious harm or death, including heat hazards.
• A growing number of states have adopted heat illness prevention laws.

Parts of Arkansas, California, Florida, Illinois, Iowa, Kentucky, Mississippi, Missouri, Oklahoma, and Tennessee experienced temperatures above 100 degrees Fahrenheit during the last weeks of summer. As a result, parts of those states were under heat advisories, according to the National Weather Service.

Federal and State Action

Federal law does not have a permanent heat illness prevention standard, but employers are required under the OSH Act’s general duty clause to provide a workplace free of hazards that can cause serious harm or death, including indoor and outdoor heat hazards.

On April 10, 2026, the Occupational Safety and Health Administration (OSHA) updated its national emphasis program (NEP) for indoor and outdoor heat hazard prevention, providing new citation guidance and adding twenty-two industries targeted for enforcement. To prevent heat illness among workers, OSHA recommends strategies like providing adequate water, increasing rest breaks, making work shifts shorter, slowing down physical activity, and training supervisors to recognize the signs of heat illness, such as heavy sweating, dizziness, vomiting, and confusion.

Meanwhile, several states and localities, including California, Maryland, New York City, and Oregon, have their own heat illness prevention rules that employers must follow.

Next Steps

Employers may wish to monitor indoor and outdoor temperatures and quickly address heat-related hazards. Employers also may want to consider developing or updating their written heat illness prevention program.

Employers are required to report certain work-related injuries, illnesses, and fatalities, including those related to heat. For example, if a worker needs inpatient hospital care due to work-related heat exposure, the employer must report the incident to OSHA. Employers are required to report an inpatient hospitalization within twenty-four hours and a fatality within eight hours.

Ogletree Deakins’ Workplace Safety and Health Practice Group will continue to monitor developments and will post updates on the State Developments and Workplace Safety and Health blogs as additional information becomes available.

In addition, the Ogletree Deakins Client Portal provides subscribers with timely updates on federal and state laws on heat illness prevention and wildfire smoke exposure. Premium-level subscribers have access to comprehensive law summaries, policies, and templates. Snapshots and Updates are complimentary for all registered client users. For more information on the Client Portal or a Client Portal subscription, please email clientportal@ogletree.com.

Dee Anna D. Hays is a shareholder in Ogletree Deakins’ Tampa office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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Quick Hits

• The State Department is coordinating with the U.S. Department of Homeland Security (DHS) to review and revoke B-1 and B-2 visas issued to foreign nationals between 2016 and 2026 who applied for asylum following their entry into the United States as visitors.
• Visa revocation generally does not affect the immigration status of an individual currently in the United States, but it will typically prevent reentry into the country with thatvisa.

The Overarching Plan

According to announcements from the White House and the State Department, the Trump administration plans to revoke the B-1 and B-2 visitor visas of foreign nationals who entered the United States as temporary business or tourist visitors and subsequently filed asylum applications. A State Department spokesperson confirmed that the department is coordinating with DHS to identify these individuals and that visa revocations will occur on a rolling basis.

B-1 visas are typically issued for temporary business-related travel, while B-2 visas are typically issued for short-term tourism, family visits, and certain medical treatment purposes. B-1 and B-2 visa applicants are typically asked to affirm that they do not intend to apply for asylum, and visa eligibility generally requires that foreign national visitors demonstrate strong ties to their home countries and an intent to depart the United States after their visits.

While revocation of a visa can have a significant impact on the visa holder, revocation of a visa for an individual already present in the United States does not typically affect that individual’s immigration status. Because a visa is a travel document, revocation generally affects the individual’s ability to use that visa for future travel and reentry into the United States. Additionally, individuals with pending asylum applications may already face limited or restricted travel on B-1 or B-2 visas due to the nature of their pending applications.

Next Steps

Individuals who applied for asylum, or employers aware of employees who applied for asylum, may want to closely review the immigration documentation and the circumstances of these individuals’ entries into the United States. While the government has indicated the process is ongoing, individuals who believe they meet the State Department’s criteria may wish to prepare for and understand what a visa revocation could mean for their cases.

Ogletree Deakins’ Immigration Practice Group will continue to monitor developments and will provide updates on the Immigration blog as additional information becomes available.

For additional insight into the critical immigration issues facing employers today, please join our Virtual Immigration Insights Symposium on Wednesday, October 7, 2026, from noon to 2:30 p.m. ET. Register here.

This article and more information on how the Trump administration’s actions impact employers can be found on Ogletree Deakins’ Administration Resource Hub.

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Quick Hits

• USCIS will require employment-based adjustment of status (“green card”) applicants to use the Visa Bulletin’s Final Action Dates chart in September 2026.
• Final action dates for EB-1, EB-2, EB-3, and EB-5 remain unchanged from August 2026; EB-2 India continues to be unavailable.
• The State Department warns that EB-1 India, EB-2 (all countries), and EB-5 Unreserved categories may retrogress or become unavailable before the fiscal year closes on September 30, 2026.

While final action dates did not change in the EB-1, EB-2, EB-3, or EB-5 employment-based preference categories and EB-2 immigrant visas remain unauthorized (unavailable) for individuals born in India, the State Department notably indicated that EB-1 India, EB-2, and EB-5 Unreserved categories may also become unavailable in the coming weeks.

Employment-Based Final Action Dates for September 2026

The September 2026 Visa Bulletin Final Action Dates chart indicates no changes from August 2026 in the EB-1, EB-2, EB-3, and EB-5 categories. EB-2 India, however, remains “Unauthorized” (unavailable), and other categories flagged by the State Department could move to unavailability before the fiscal year (FY) ends:

Source: U.S. Department of State, September 2026 Visa Bulletin

Despite the unchanged final action dates, the State Department’s September 2026 Visa Bulletin advises that several categories may become unavailable before the end of September 30, 2026. For EB-1 India, high demand and number usage may cause unavailability, delaying further approvals until new visa numbers become available in FY2027, which begins on October 1, 2026. For EB-2 across all countries, increased demand and number usage may cause retrogression of the final action date or temporary unavailability before fiscal year-end, potentially delaying immigrant visa and adjustment of status approvals. The EB-5 Unreserved category may face similar constraints if demand and usage exceed supply before September 30.

Key Takeaways

Although final action dates remain unchanged for September 2026, the State Department’s warnings highlight the importance of closely monitoring the Visa Bulletin and announcements from USCIS and the State Department. Employers and employees with pending cases in the EB-1 India, EB-2, or EB-5 Unreserved categories should watch for announcements that could affect visa availability as the fiscal year closes on September 30, 2026. Given the risk of retrogression or unavailability, eligible applicants may want to consider filing sooner rather than later, particularly in light of USCIS form changes due to the new public charge standard taking effect on September 18, 2026. Employers and employees may also want to note that the State Department is temporarily pausing immigrant visa interview appointments worldwide while providing training for consular officers on the public charge screening guidance.

Ogletree Deakins’ Immigration Practice Group will continue to monitor developments and will post updates on the Immigration blog as additional information becomes available.

For additional insight into the critical immigration issues facing employers today, please join our Virtual Immigration Insights Symposium on Wednesday, October 7, 2026, from noon to 2:30 p.m. ET. Register here.

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Quick Hits

• The State Department has paused immigrant visa interview appointments at consulates and embassies worldwide so that its officers can undergo training on new public charge screening guidance.
• Nonimmigrant visa categories—including tourist, student, and temporary work visas—are currently not impacted by the pause.
• The pause in appointments appears temporary, though a specific timeline has not been announced.
• The postponement of immigrant visa interviews comes after DHS policy changes affecting public charge standards and a federal district court ruling that vacated the State Department’s earlier pause on issuing immigrant visas to foreign nationals from seventy-five countries.

The State Department has temporarily paused immigrant visa interviews at U.S. embassies and consulates around the world while consular officers complete enhanced training on the public charge ground of inadmissibility. Securing an immigrant visa allows a foreign national to request admission into the United States as a permanent resident (“green card” holder). The pause affects applicants for immigrant visas in family-based, employment-based, and Diversity Visa categories, but does not impact nonimmigrant visas such as H-1B, L-1, F-1, B-1/B-2 visas, or pending adjustment of status applications.

Press reports indicate applicants with previously scheduled interviews are receiving email notifications that their appointments are postponed and will be rescheduled, although the State Department has not yet provided a timeline for when interviews will resume or how quickly cases will be rebooked.

Under existing immigration law, consular officers may deny an immigrant visa if an applicant is deemed likely to become a public charge, meaning dependent on government or public benefits. In making that determination, officers consider factors including age, health, family circumstances, financial resources, education, skills, employment prospects, and English proficiency. The State Department has also begun testing public charge bonds in certain cases, but has not released details about the new training materials or how adjudications may change.

The State Department’s immigrant visa interview pause and public charge training initiative follows several recent events affecting the Trump administration’s policies surrounding public charge, including the U.S. Department of Homeland Security’s rescission of the Biden-era public charge policy on July 20, 2026, U.S. Citizenship and Immigration Services’s release of new public charge standards on August 18, and a federal district court ruling on August 21 vacating the State Department’s earlier suspension of immigrant visa issuance to applicants from seventy-five countries.

The immigrant visa interview pause also comes amid a series of recent immigration policy changes, including expanded screening measures, visa revocations, and restrictions on adjustment of status. As more applicants may be required to complete consular processing abroad, the impact of immigrant interview postponement may increase.

Next Steps

Employers and individuals with pending immigrant visa applications or appointments should monitor consular communications closely, as interview delays or rescheduled appointments may affect overall case timelines and travel plans. Those with time-sensitive matters may want to assess potential impacts and evaluate available options.

Ogletree Deakins’ Immigration Practice Group will continue to monitor developments and will post updates on the Immigration blog as additional information becomes available.

For additional insight into the critical immigration issues facing employers today, please join our Virtual Immigration Insights Symposium on Wednesday, October 7, 2026, from noon to 2:30 p.m. ET. Register here.

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Quick Hits

• Because FAMLI allows an employer to choose to cover an employee’s portion of the contribution, a unionized employer that implements FAMLI’s default 50/50 contribution split without first providing the union with advance notice and an opportunity to request bargaining may risk an unfair labor practice charge.
• Since employers must already bargain over the contribution split, they could include notice of whether they will implement an Equivalent Private Insurance Plan or the state plan at the same time.
• Because contributions will begin on January 1, 2027, unionized employers may wish to act promptly to satisfy their bargaining obligations.

Where FAMLI and the National Labor Relations Act Meet

FAMLI is Maryland’s forthcoming state-mandated paid family and medical leave insurance program. Employers and employees share the cost of contributions that will fund paid leave benefits for certain qualifying events (i.e., the employee’s own or a family member’s serious health condition, bonding with a new child, or addressing military deployment–related needs). The contribution rate is capped at 1.2 percent of wages, up to the Social Security wage cap, with the actual rate adjusted annually and currently set at 0.9 percent. Contributions begin on January 1, 2027, with benefits commencing in January 2028.

Employers may implement an approved equivalent private insurance plan (EPIP) in lieu of participating in the state plan. We have discussed FAMLI in detail in prior articles, including our most recent one on new compliance resources from the Maryland Department of Labor to assist with employer implementation, as well as one on the EPIP pre-application process for filing a Declaration of Intent (DOI).

Both the contribution and EPIP provisions may trigger bargaining or notice obligations for unionized employers. Section 8(a)(5) of the National Labor Relations Act requires employers to engage in good-faith negotiations with unions regarding employees’ wages, hours, and other terms and conditions of employment, including benefits.

The Discretionary Split and Why It Matters

FAMLI defaults to a 50/50 split of the contribution, meaning that the employer and employee will each be responsible for 0.45 percent of the current 0.9 percent. Critically, the law provides that employers may pay the employee’s share in part or in full. That discretion gives rise to a labor relations issue: under Section 8(a)(5), implementing the employee payroll deduction without first providing the union advance notice and an opportunity to bargain may create risk of an unfair labor practice (ULP) charge.

It is likely that unions will want the employer to pay some or all of the employee share of the full contribution. Therefore, employers that implement the 50/50 split deduction without having provided the union with notice and the opportunity to request bargaining face a possible Section 8(a)(5) ULP finding. The remedy is costly: refunds to all affected employees until the violation is cured, effectively making the employer bear 100 percent of the contribution retroactively.

The Choice of an EPIP

Under the FAMLI statute, an EPIP must provide employees with all the same benefits and rights as the state plan. Given that, it is unclear whether the choice of an EPIP or the state plan will technically impact a term or condition of employment. Nonetheless, since employers will need to provide notice and an opportunity to bargain with regard to the contribution split, it is quite simple for them to include a reference to the plan they will implement at the same time.

Key Takeaways

There are several critical takeaways for unionized employers, who may wish to consider doing the following:

• providing advance written notice to unions of the intent to implement the 50/50 split and, if applicable, a proposed EPIP implementation, with sufficient lead time for a bargaining request;
• if a request for bargaining is made by the union, bargaining over the contribution allocation and/or its effects (there is no obligation to agree with the union’s position, but upon request from the union, the employer must give the union an opportunity to advocate for its position on the issue);
• not unilaterally implementing the payroll deduction without satisfying bargaining obligations;
• preparing for grievances characterizing the deduction as an unauthorized wage reduction; and
• calendaring critical dates: contributions begin January 1, 2027, and the deadline for filing a DOI for an EPIP is November 15, 2026.

Ogletree Deakins’ Baltimore office, Traditional Labor Relations Practice Group, and Leaves of Absence/Reasonable Accommodation Practice Group will continue to monitor developments and will provide updates on the Leaves of Absence, Traditional Labor Relations, and Maryland blogs as additional information becomes available.

In addition, the Ogletree Deakins Client Portal provides subscribers with timely updates on state family and medical leave laws, including Maryland’s FAMLI program. Premium-level subscribers have access to comprehensive Law Summaries and updated policies; Snapshots and Updates are complimentary for all registered client users. For more information on the Client Portal or a Client Portal subscription, please email clientportal@ogletree.com.

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Quick Hits

• The Colorado Attorney General’s Office will hold a rulemaking hearing on October 26, 2026, to gather input on new regulations for AI-driven employment tools before they take effect on January 1, 2027.
• The attorney general’s office is seeking input on how to define when a covered AI tool “materially influence[s]” a decision, thereby triggering obligations under the state’s new AI law, how to allocate responsibilities when deployers rely on tools operated by third-party vendors, and whether the rules should detail requirements for developer disclosures about known limitations of AI tools.

On August 11, 2026, the Colorado Attorney General’s Office Department filed proposed rules, titled “Automated Decision-Making Technology and Conversational Artificial Intelligence Service Rules.” The proposed rules seek to implement and clarify the compliance obligations under Colorado Senate Bill (SB) 26-189, the Automated Decision-Making Technology in Consequential Decisions (ADMT) Act, and House Bill (HB) 26-1263, the Chatbot Safety Act, both of which were signed into law by Governor Jared Polis in May 2026 and take effect on January 1, 2027.

According to the hearing notice, the attorney general’s office is seeking input about specific issues that were not fleshed out in the proposed rules that could have a particular impact on compliance obligations for employers. Specifically, the office is seeking input on the standard for “materially influence” in a consequential decision, the threshold that triggers obligations under the ADMT Act, multiparty arrangements with automated decision-making technology (ADMT) vendors, which are not explicitly contemplated by the act despite being typical in the employment context, and the amount of detail that developers should be required to provide to employers about known risks of AI tools.

‘Materially Influence’ Standard

The ADMT Act repealed and replaced the state’s landmark 2024 AI law, and will impose a new multistage notice framework and rights for affected “consumers,” including employees and job applicants, to seek information about the tool and “meaningful human review.” The act’s obligations are triggered when an ADMT “is used to materially influence a consequential decision” such as a hiring, promotion, or termination decision. The act defines “materially influence” to mean the ADMT output is “a non-de minimis factor” affecting the outcome of the consequential decision, “including by constraining, ranking, scoring, recommending, classifying, or otherwise meaningfully altering how a consequential decision is made.”

However, the attorney general’s office is seeking additional input on how to clarify this “materially influence” standard, specifically what would constitute “a non-de minimis factor.” The attorney general’s office is considering two competing standards and specifically asking which one to adopt.

Standard 1: The Lower Threshold

Under this standard, a “de minimis factor” is one that has only a “trifling, trivial, or incidental” impact on the outcome. Critically, a factor would not be deemed de minimis simply because other factors played a more significant role. The standard would create a rebuttable presumption of material influence whenever the ADMT output pertains to the individual, is reviewed by (or screens data for) the decision-maker, and is consistent with the outcome.

Employers would be able to rebut the presumption with evidence that the decision-maker recorded an independent judgment before seeing the ADMT output, did not view the output, made a decision inconsistent with the output, or relied on other previously documented and consistently applied dispositive factors.

Standard 2: The Higher Threshold

Under this standard, a “de minimis factor” would be one that is “not a substantial factor” in the consequential decision. A factor could be de minimis if other relevant factors independent of the ADMT output played a “significantly larger role.” The presumption of material influence uses the same trigger—that the output pertains to the individual, is reviewed by, or screens for the decision-maker, and is consistent with the outcome.

But the rebuttal standard is notably different. Under Standard 2, rebuttal requires showing that the decision-maker conducted an independent review of “substantial information” other than the ADMT output, that the outcome was consistent with that other information, that the decision-maker had authority to decide based on independent review, and that the decision-maker had the subject matter understanding necessary to review and understand the substantial relevant information.

Under the act, “materially influence” does include “incidental, trivial, or clerical uses.” As a practical matter, however, adoption of the lower threshold seemingly would bring a large percentage of use cases of ADMTs in the employment context within scope of the act.

Multiparty Arrangements and ADMT Vendors

The ADMT Act does not explicitly contemplate scenarios in which deployers (i.e., employers) do not directly operate the ADMT that materially influences their decisions, yet some employers rely upon ADMT tools operated by third-party vendors. The attorney general is asking:

• Should rules clarify that a deployer may run an ADMT through a vendor?
• Should rules mandate that deployers remain responsible for fulfilling all deployer obligations regardless of vendor involvement?
• Should ADMT vendors be required to assist deployers in responding to consumer requests for personal data and correction?
• In the staffing agency scenario—where the agency operates the ADMT and the employer relies on its output—which party bears deployer obligations?
• Should vendor obligations be modeled on processor obligations under the Colorado Privacy Act?

These questions are crucial to regulating the procurement and use of AI in the employment context. The allocation of compliance responsibility between the employer-deployer and the vendor will be a major factor in cost, contracting, and risk.

ADMT Developer Obligations

The ADMT Act requires developers to make certain information available to deployers (i.e., employers), but the attorney general is seeking input about whether the rules should incorporate greater specificity about the content of these disclosures. With respect to this issue, the attorney general is seeking input about the following topics:

• Should rules require a developer to disclose any testing performed, how the testing was performed and the results of such testing?
• With what level of specificity should developers be required to disclose the categories of data used to train the ADMT?
• Should the rules specify the form for developers to provide information or the channels through which such information is provided, if rules are adopted to require more detail about known limitations on the ADMT?

Because employers rely upon information provided by developers in making procurement decisions, the adoption of rules imposing more robust disclosure requirements on developers doing business in Colorado could aid employers in evaluating which tools to purchase.

Next Steps

The public hearing is scheduled for October 26, 2026, at 10:00 a.m. According to the hearing notice, comments must be submitted by September 4, 2026, to be considered in a second proposed draft to be circulated by September 23, 2026, and discussed at the hearing. However, any written comments received on or before 11:59 p.m. on October 26, 2026, will be considered in the final set of rules. If the rulemaking hearing continues beyond October 26, 2026, the attorney general will consider any written comments received before 11:59 p.m. MT on the last day of the formal rulemaking hearing.

The Colorado ADMT proposed rules are the latest in a growing trend of state regulations impacting employers’ use of AI in the workplace to make, facilitate, or influence hiring, promotion, and termination decisions about individual employees or job applicants. Although some modifications to the initial draft may be made, these proposed rules provide some indication of the requirements that will apply to employers doing business in Colorado that use ADMTs to evaluate job applicants or employees residing in Colorado.

Employers in Colorado and other stakeholders may want to consider attending and/or testifying at the hearing and consider submitting formal written comments on the proposed rules.

Ogletree Deakins’ Artificial Intelligence and Innovation Practice Group will continue to monitor developments and will provide updates on the Artificial Intelligence and Innovation, Colorado, Cybersecurity and Privacy, and Employment Law blogs as additional information becomes available.

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