Three Big HR Regulatory Shifts Your Bank Should Know for 2026

When most people hear “Human Resources,” the first thing that may come to mind is payroll and benefits. Sure, that’s an important part of what we do, but as HR professionals, we know our role is much broader, especially when it comes to supporting our organization’s health and resilience. One big part of that is guiding the organization for change and making sure it has the right infrastructure to support that change.

So, what’s on the radar this year? Three headline changes stand out:

• One Big Beautiful Bill Act (OBBBA)

• Secure 2.0: Mandatory Roth Catch-Up Rule

• Guidance on AI in Recruiting

The OBBBA brings about significant changes, but the most notable change for banks is the tracking and reporting of qualified overtime compensation. Even though this bill was signed into law back in 2025, the IRS will provide transition relief for tax year 2025 for employers subject to the new reporting requirements. Now’s the time to double-check that your payroll system can accurately separate and report qualified overtime compensation. Don’t wait until the last minute—being proactive here will help you avoid headaches (and compliance issues) down the road.

Another major update impacts retirement plans. Starting January 1, 2026, if you have employees who are 50 or older and who made more than $150,000 (FICA wages) last year, their catch-up contributions must be made on a Roth basis. If you do not currently offer a Roth plan but want to allow catch up contributions, you will want to get in touch with your retirement plan vendor. If you do offer a Roth contribution, make sure to amend your plan document and check that your payroll processes are updated so these contributions are properly routed for your eligible team members.

AI is changing how we recruit and manage talent, but with these advances come new possible regulations. At the federal level, agencies are rolling out general guidance for employers to be transparent about how AI influences hiring and other employment decisions. States are moving even faster, with their own rules to prevent algorithmic bias and discrimination. Often, these regulations require you to disclose when AI tools are used, evaluate any potential for bias, and provide alternatives for applicants or employees who prefer not to be assessed by automated systems. If your bank operates across several states, expect to follow the strictest rule to stay compliant everywhere you do business.

My advice? Review your employee handbook at least once a year and keep in close contact with your payroll vendors and state resources. They’re great partners in making sure your policies and systems are up to date.

by Andrea Carter, SVP/Human Resources