What unknowns keep you up at night?
For most business leaders, it is not just one issue. It is the combination of moving parts that all carry risk if they are not addressed at the right time. Issues like hiring decisions, cost pressures, agreements that may or may not hold up when it matters, and changes in the law that quietly shift the rules underneath the business.
As fractional General Counsel, we pay attention to those pressure point – not to create concern, but to bring clarity. Our goal is simple: to help you see what is changing, understand what it means in practice, and take action early where it counts.
This update pulls together recent federal and Washington state developments and pairs them with practical next steps. Some items may require immediate attention. Others create an opportunity to plan ahead and make more deliberate decisions over the next year.
If something here connects to a current challenge or a question you have been circling, we are always available to talk it through. Feel free to share this update with colleagues as well.
👉 Join us for our upcoming Legal Update webinar on Friday, June 5 for a deeper dive into these updates and more.
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FEDERAL
Supreme Court Invalidates 2025 “Liberation Day” Tariffs
In Learning Resources, Inc. v. Trump (Feb. 20, 2026), the U.S. Supreme Court struck down the 2025 “Liberation Day” tariffs, holding that the President lacked authority to impose broad import duties under emergency economic powers. The Court reaffirmed that only Congress may impose tariffs as taxes.
The ruling voids the 2025 emergency tariffs, including the 10 percent across the board duty and related country specific increases, and requires the government to refund an estimated $175 billion to more than 300,000 affected businesses. Refunds are expected by mid 2026. Existing Section 301 tariffs remain in effect.
ACTION: Businesses that paid 2025 emergency tariffs should determine refund eligibility and submit claims through the federal tariff refund portal. Continue monitoring trade developments that may affect supply chain costs and sourcing decisions.
Expanded Travel Restrictions and Visa Delays
A Presidential Proclamation effective January 21, 2026 expands travel restrictions for certain foreign nationals, primarily from parts of Africa, the Middle East, and Asia, and authorizes broader visa suspensions based on national security concerns. Employers should also anticipate longer visa processing, increased screening, and travel delays beyond the listed countries, particularly at consulates and ports of entry in early 2026.
ACTION: Employers should plan for extended visa and re-entry timelines, review near term travel needs, and build additional lead time into immigration filings and onboarding plans.
WASHINGTON
Non-Compete Agreements Largely Banned
Washington’s House Bill 1155, signed March 23, 2026, bans nearly all non-competition agreements with employees and independent contractors, regardless of income or when the agreement was signed. The law takes effect June 30, 2027, applies retroactively, and voids any provision that restricts post employment work, including repayment or forfeiture clauses that function as non-competes in practice.
Employers may not enforce or threaten to enforce prohibited non-competes after the effective date and must provide written notice by October 1, 2027 to current and former workers that covered provisions are unenforceable. Narrow non-solicitation, confidentiality, sale of business, and certain other limited agreements remain permitted if carefully tailored.
ACTION: Employers should begin reviewing all employment and contractor agreements now to identify and remove any provisions that could restrict post employment competition. Updated templates and advance planning for required notices will be critical. For a deeper breakdown of what is prohibited and what remains allowed, see our recent blog post on Washington’s new noncompete law.
Changes to Contributions Under Washington Paid Family & Medical Leave
Effective June 11, 2026, House Bill 2345 changes how PFML premiums are allocated internally between family leave and medical leave. The total premium rate and overall employer employee split do not change. Instead, the law redistributes deductions to align with federal tax guidance on taxable benefits.
Beginning June 11, employers may deduct up to 100 percent of the employee share of medical leave premiums from wages. Family leave deductions are recalculated using a formula that replaces the prior flat 45 percent limit. The update is intended to reduce unintended federal tax consequences for employees while preserving program funding.
ACTION: Employers should review payroll systems and PFML deduction practices before June 11, 2026 to confirm that family and medical leave contributions are allocated correctly. Employers should coordinate with payroll providers to avoid deduction errors and potential tax issues.
New Washington Millionaires’ Tax
Senate Bill 6346 establishes a 9.9 percent tax on Washington taxable income for individuals with adjusted gross income of $1,000,000 or more, effective January 1, 2028. The law includes credits to reduce double taxation, updates income calculation rules, and clarifies filing obligations for residents, non-residents, and part year residents. Revenue will fund education, health care, public defence, and the Working Families Tax Credit.
Although the tax does not take effect until 2028, planning considerations will begin much earlier for high income earners, business owners, and individuals with variable or equity-based compensation.
ACTION: Affected individuals should begin advance planning now with advisors to evaluate income timing, residency considerations, and entity structures. Our recent Equinox blog post on Washington’s millionaires’ tax outlines key planning considerations to review well ahead of the effective date.
Increase in Wage & Hour Class Actions
Meal and rest break class actions continue to rise in Washington. Recent court decisions, including Androckitis v. Virginia Mason Medical Center, emphasize strict compliance with uninterrupted meal periods and timely rest breaks. Employers without clear documentation showing that required breaks were actually taken face increased exposure to penalties, double damages, and attorneys’ fees, particularly in class actions.
ACTION: Employers should review break policies, timekeeping systems, and manager training to ensure meal and rest breaks are provided and reliably documented. Inability to prove compliance can result in significant liability, even where violations were unintended.
