Workplace Rights and Hiring Compliance in 2026 for U.S. and UK Employers

Workplace regulations are evolving in both the United Kingdom and the United States, and 2026 will bring even more changes that affect how organisations recruit, screen and manage employees. These developments are not limited to one area of employment law. They cover everything, including hiring decisions, background checks, the use of technology, data handling and the way employers communicate with candidates. 

In this article, we’ll be looking at key policy changes affecting hiring, screening, worker rights, and workplace practices (including remote work expectations, data privacy and fair chance hiring). We’ll also outline practical steps HR teams can take to ensure their policies are up-to-date.

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Key UK Developments Employers Should Review

Employment Rights Act and Hiring Practices

In the UK, the Employment Rights Act 2025 will introduce additions and amendments to existing legislation, including the Employment Rights Act 1996. Some of the key changes include making paternity, parental, and sick leave "day one" rights, banning exploitative zero-hour contracts, restricting "fire and rehire" practices and strengthening industrial action rights

As employment protections apply earlier and dismissal practices face tighter regulation, the way recruitment decisions are made and recorded becomes more significant. For example, if a dismissal or dispute occurs within the first year of employment, employers might now be asked to demonstrate that the original hiring decision was fair and based on objective criteria. This places greater weight on documentation created at the recruitment stage. 

For HR teams, this means ensuring that job descriptions reflect the actual requirements of the role, interview criteria are agreed in advance (and stuck to), and reasons for decisions are recorded clearly. Reference checks and eligibility assessments should follow a clear internal policy so there is no uncertainty about when checks are required or how outcomes influence the final decision.

In addition to changes affecting dismissal and probation, employers should also consider developments around flexible working and worker protections. Requests for flexible working arrangements are increasingly treated as a standard part of employment rather than an exception, and recruitment materials should not contradict statutory rights. Ensuring that all of your contracts and policies reflect the current laws will help prevent disputes later.

Screening and Right to Work Compliance

Right to work checks are still a basic requirement in UK hiring, but the process has changed in recent years with the wider use of digital verification and online status checks. Employers are now expected to use the correct checking route depending on the individual’s immigration status, whether that is an online Home Office check or a certified identity service provider. It’s incredibly important to carry out checks before employment begins, retain the required evidence and record the date the check was completed, as this forms part of the statutory excuse against civil penalties. 

Screening practices more broadly also need to be proportionate to the role. Carrying out enhanced vetting for some candidates but not others, especially without clear reasoning, can create inconsistency and potential discrimination risk. Reference checks, qualification verification and criminal record checks should follow a written framework that explains which roles require which checks and how the outcomes are assessed. This helps ensure that decisions can be explained if reviewed later.

Data Protection and Candidate Privacy

Data protection during recruitment is governed by UK GDPR and the Data Protection Act, and those obligations apply just as much at the hiring stage as they do once employment begins. When collecting references or running background checks, it’s important to remember that employers are handling personal information that candidates expect to be treated carefully. 

This means that privacy notices should explain what information is collected during recruitment, how it is used and how long it will be kept for. Data should not be held onto indefinitely, and access to it should be limited to those who are actively involved in the hiring decision. Employers also need to be prepared to respond if a candidate submits a data subject access request, which could include disclosure of interview notes or screening records. 

HR teams should carefully review where their recruitment data is stored and whether any information is duplicated across places such as email accounts or external systems. Where consent is relied upon, it must be recorded clearly. 

Top tip: An integrated system for managing recruitment data can help reduce duplication and provide a clearer audit trail (provided it is configured in line with data protection requirements).

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Evolving Hiring and Workplace Expectations in the United States in 2026

AI in Hiring and Screening

In the United States, the use of artificial intelligence in hiring is now regulated in certain states and cities. For example, New York City now requires employers that use automated employment decision tools to carry out a bias audit and to make candidates aware that these tools are being used. There are other states that are considering or introducing similar requirements, especially where technology is being used to filter or rank applicants. 

So, what does this mean? Well, employers need to identify exactly where automated systems might be influencing their hiring decisions. For example, if software is screening CVs or assessing video interviews, organisations must understand very clearly how those tools operate and what safeguards are in place. In jurisdictions where audits or disclosures are required, employers are entirely responsible for ensuring those steps have been completed. 

For companies hiring across multiple states, it’s important to carefully review the rules that apply in each location where your candidates are based, because AI and screening requirements can differ between states and cities. Where AI audits or candidate disclosures are required, those steps should be incorporated into the standard recruitment process and recorded clearly, not just handled on the side informally. Employers also need to confirm that their screening or assessment providers are compliant with the relevant state laws and provide documentation where needed.

Background Screening and Fair Chance Hiring

Fair chance hiring is still an important consideration in the US. Lots of states and cities have introduced something called ‘ban the box’ rules, which prevent employers from asking about a candidate's criminal history until later in the recruitment process, often after a conditional offer has been made.

This means that employers need to be very clear about when criminal history is considered during the recruitment journey and how hiring decisions are assessed. Blanket policies that automatically exclude candidates with certain records are going to be far more prone to legal risk, and hiring decisions should always relate directly to the responsibilities of the role and be documented carefully. 

Federal law also regulates background screening through the Fair Credit Reporting Act. This means if you use consumer reporting agencies to run a background check, you must tell the candidate in writing and get their permission first. Equally, if you decide not to hire someone because of the report, you must follow a set process, which includes giving them a copy of the report and allowing the candidate time to respond before making a final decision.

As above, organisations hiring across multiple states need to review their screening procedures regularly, as rules always vary by location. 

Remote Hiring Across Different States

Remote hiring can be confusing in the United States because employment law is largely state-based. This means that when employees are based in different states, employers may be dealing with different wage rules, pay transparency requirements and tax obligations at the same time.

Lots of states now require salary ranges to be included in job advertisements or shared with candidates at a certain stage of the hiring process. Tax registration and reporting obligations sometimes also arise in the state where the employee is physically based. 

It’s therefore important to ensure, where necessary, that contracts and offer letters reflect the laws that apply in the employee’s location, not just the company’s headquarters. Onboarding documentation, wage statements and record-keeping practices may also need to align with local requirements. Employers hiring across states need to check carefully that their recruitment and payroll processes are set up to handle these differences.

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Shared Themes Across the US and UK

Although the legal frameworks in the UK and the United States are different, there are definitely some cross-overs too. 

• All employers are now expected to be more open about how their hiring decisions are made, especially where background checks or automated tools are involved. Candidates should be able to understand what information is being considered and at what stage. 

• Clear documentation is also increasingly important, especially when it comes to compliance. In the UK, recruitment records may be reviewed in response to a data subject access request or an employment tribunal claim. In the US, employers may need to demonstrate that adverse action procedures or state disclosure requirements were followed correctly. In both cases, being able to produce accurate and clear records matters. 

• Technology must be used responsibly. Even where hiring systems are integrated or partially automated, employers are responsible for ensuring ethical use and oversight. Processes should be defined clearly, and screening should be relevant to the role rather than applied uniformly without clear justification. 

• Across both places, fairness is key. Checks and assessments should always relate directly to the responsibilities of the position and be applied in a way that can be explained if questioned.

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Practical Steps for HR Teams in 2026

We’ve covered a lot in this article, but don’t worry, these changes don’t require you to rebuild your recruitment processes from scratch! They just need a little extra attention. 

Remember that your policies should reflect the current law in the jurisdictions where hiring takes place, especially when it comes to screening, AI use and candidate disclosure. If background checks or automated tools are used, the steps need to be clearly recorded. 

Recruitment documentation also needs to show how decisions were reached and how data was handled. Privacy notices, retention periods and right to work procedures should match what happens in practice, and employers operating across multiple states or hiring remotely should ensure that their contracts and onboarding processes fit the laws that apply in the employee’s location. 

When your recruitment decisions are structured and documented in this way, your organisation is better prepared to respond to potential scrutiny.