As we close out Q1 2026, employers are navigating a mix of ongoing compliance responsibilities and emerging workforce priorities.
From federal updates impacting independent contractor classifications and prescription drug reporting, to key tax deadlines and EEO-1 preparation, this is a critical time to ensure HR, payroll, and reporting practices are aligned heading into Q2.
At the state level, Minnesota Paid Leave is now live, and the Secure Choice Retirement Program continues its rollout, signaling longer-term shifts in employer responsibilities.
This update provides a clear overview of what employers should have completed, what requires immediate attention, and what to prepare for in the months ahead.
Warm Regards,
Minnesota Paid Leave (MPL)
Minnesota Paid Leave is Live!
- In Q1 we’ve learned this program isn’t just a payroll deduction, but truly a heavy administrative lift with real operational impact to our businesses.
Now, headed into Q2: - Quarterly reporting is due via your UI system; this isn’t new and should already be built into employers’ quarterly reporting cadence.
If you are using an approved equivalent plan through a private insurer, your first premium payment will likely come due in April. Employers should be prepared to not only make that payment, but to reconcile payroll deductions in support of that payment.
Secure Choice Retirement Program is Coming!
Minnesota is moving forward with its Secure Choice Retirement Program, a state-facilitated retirement savings option designed for employees who do not currently have access to an employer-sponsored plan. While the program is still rolling out, the intent is clear: expand access to retirement savings and place some responsibility on employers who are not offering a qualified plan today.
For employers, this isn’t an immediate Q2 compliance deadline, but instead a “coming soon”. Once implemented, employers with five (5) or more W2 employees (regardless of full or part-time status), who do not offer a retirement plan may be required to automatically enroll employees into the state program, facilitate payroll deductions, and handle related administrative responsibilities. Employers who already offer a compliant retirement plan (like a 401(k)) will generally not be required to participate.
A phased rollout begins April 1, 2026, beginning with larger organizations (based on employee headcount), where the deadline for enrollment for small businesses with 5-9 employees is set for January 1, 2028. Employers with retirement plans should review their plan documents to confirm their plan does not exclude employees who otherwise must be offered the state plan or make plans to incorporate the state plan into your administrative processes.
Independent Contractor Classifications Still Remain Strict in Minnesota
Despite the DOL’s February 26 proposal, Minnesota will continue to apply its own stricter standards on classification of works, enforce those aggressively, and penalize employers accordingly. So, even if the federal government changes its test for classification, there’s still a state-based test to pass.
Federal Updates Impacting MN Employers Right Now
Independent Contractor Classifications in Flux
On February 26, the Department of Labor (DOL) proposed rescinding the 2024 final rule regarding the classification of independent contractors under the Fair Labor Standards Act and replacing it with an approach more like former frameworks. While some may say this proposal makes it easier to classify a worker as an independent contractor, others continue to say the rules are gray and leave far too much room for complaints, charges, and lawsuits. All to say, we’ll be keeping a very close eye as this proceeds in Q2.
New Prescription Drug Reporting (RxDC) Due June 1
Under the federal Consolidated Appropriations Act, employers sponsoring group health plans are subject to annual Prescription Drug Data Collection (RxDC) reporting, with the next deadline on June 1, 2026, covering 2025 plan year data. While this requirement is most commonly handled by carriers, employers aren’t necessarily off the hook all together.
In Q2, employers should keep an eye out for carrier or broker data requests, respond promptly, and confirm who is responsible for submission. Once complete, request written confirmation that the report was filed on your behalf.
Employers might not be doing the filing, but they’re still accountable if it does not get done.
Quarter-End & Quarter-Start Tax Deadlines
As we move into Q2, be aware of tax deadlines, such as the Q1 Form 941, which is due by April 30, and FUTA deposits are due if accumulated FUTA tax through March 31 exceeds $500.
EEO-1 Reporting Window Opens
In Q2, the Equal Employment Opportunity Commission (EEOC) will typically open the EEO-1 reporting period. While the reporting window may not yet be open, employers that are required to file can get ahead by confirming their data is clean and categorized appropriately. Doing this prework now means less pressure when the report comes due.
For reference, only employers with 100+ employees or federal contractors with 50+ employees (and qualifying federal contracts of $50,000 or greater) are required to file an EEO-1 Report.
HR On-Call: A New Service Option Through Lakeside HR Group
Feeling overwhelmed with these updates? Not sure if you have the resources to stay ahead of compliance, benefits, employee relations, and all the other HR “stuff”? Lakeside HR On-Call may be just the added support service to help you meet your HR needs.
Lakeside HR On-call is flexible, on-demand HR support for small and growing businesses like yours that need guidance when it matters most. Access a team of senior consultants committed to just-in-time responses and resolutions to your everyday HR questions and concerns. Give your company peace-of-mind knowing Lakeside HR has your back.
About Lakeside HR Group
We are a premier Recruiting and HR Consulting firm connecting people and businesses through personalized, full-service solutions. As a boutique firm of seasoned HR professionals, we specialize in providing customized HR services for small to midsize businesses. With expertise across diverse industries, positions, and states throughout the U.S., we partner with our clients to discover top talent and deliver the support needed to help their businesses thrive.
Sources:
Minnesota Sources
Federal Sources