Military Workforce Developments for Employers to Watch in 2026

Quick Hits

• Several new developments could impact the employment of military service members and their families and employers’ compliance obligations in 2026.
• Changes range from proposals to increase incentives for hiring military spouses to enhanced employment protections for service members while on duty.
• Military spouse employment opportunities and support remain a focus for pending legislation.

1. Military Spouse Employment

One key area to watch is bipartisan legislation to reduce the unemployment rate among spouses of active-duty military service members, who often face rates several times the national rate.

On November 20, 2025, Senators Bill Cassidy (R-LA) and Maggie Hassan (D-NH), and Representatives Steven Horsford (D-NV) and Lloyd Smucker (R-PA) introduced an updated version of the Improve and Enhance the Work Opportunity Tax Credit Act (S.3265/H.R.6231) that would extend the Work Opportunity Tax Credit (WOTC) to military spouses. The WOTC provides federal tax credits to employers that hire certain “American job seekers who have consistently faced barriers to employment.” That proposed legislation is similar to the Military Spouse Hiring Act (H.R.2033/S.1027), introduced earlier in 2025.

For employers, the proposals could create new tax incentives to hire military spouses, alongside other proposals that could reshape compliance and hiring strategies.

2. Frequent Relocations

Frequent relocations continue to strain military families and can make it more challenging for employers to hire and retain military spouses. Expanding the WOTC could create new incentives for employers to hire military spouses and tap into this underutilized talent pool.

In addition, the Supporting Tours Across Years (STAY) Act (H.R.6146), introduced in November 2025,  seeks to limit relocations of active-duty servicemembers. The bill would require a comprehensive review of official transfers of active-duty service members, known as Permanent Change of Station (PCS), to determine when relocations may be unnecessary and to reduce the frequency of moves. The U.S. Congress has not yet taken up the STAY Act this year, but if it is eventually enacted, it could result in reduced PCS moves that could affect recruiting, retention, and remote-work policies for military spouses.

3. Military Re-Employment Protections

Federal law already provides civilian employment leave protections for veterans and service members who are involuntarily or voluntarily deployed for military service. The Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) entitles service members who meet certain conditions to be restored to the same job and benefits they had prior to their military service and allows them to elect to continue their employer-based health plan coverage for themselves and their dependents for up to twenty-four months while on leave.

In January 2025, Congress enacted the Senator Elizabeth Dole 21st Century Veterans Healthcare and Benefits Improvement Act (Dole Act), which included provisions affecting USERRA enforcement and remedies. The Dole Act bolstered anti-retaliation protections and allowed plaintiffs alleging USERRA violations to seek minimum liquidated damages of $50,000 and attorneys’ fees.

Agencies and courts may continue to interpret and apply the Dole Act’s USERRA-related provisions. Employers may want to ensure their military leave and reemployment policies, training, and escalation procedures align with current USERRA obligations and emerging guidance.

4. New Employer Resources

In January 2025, the U.S. Department of Labor’s Veterans’ Employment and Training Service (DOL/VETS) launched a program for employers to seek guidance for ensuring compliance. The Support and Assistance for Leaders in USERRA Training and Employment (SALUTE) program is an opportunity for employers to request technical guidance on USERRA-related questions or specific issues in their workforce before the onset of a DOL/VETS complaint or lawsuit.

Next Steps

Employers may want to prepare for potential 2026 activity by assessing policies and practices affecting servicemembers, veterans, and military families. Priority actions include reviewing USERRA compliance programs and training, updating military leave and reemployment policies, validating health-benefit continuation procedures, and aligning hiring and tax-credit screening processes to quickly capture new incentives for military spouses.

Ogletree Deakins’ new Military Workforce Practice Group brings together a team of lawyers, many of whom are veterans or currently serving in the Reserves or National Guard, who regularly advise on USERRA compliance, policy development, multistate implementation, and investigations and litigation. Amy Quick Glenos and James A. Patton, Jr. co‑chair the group.

In addition, the Ogletree Deakins Client Portal covers new laws and developments in Military Leave. All client-users have access to Snapshots and Updates. Premium subscribers have access to details, updated templates, and other resources. For more information on the Client Portal or a Client Portal subscription, please reach out to clientportal@ogletree.com.

Ogletree Deakins’ Military Workforce Practice Group will continue to monitor developments and provide updates on the Employment Law, Employment Tax, and Leaves of Absence blogs as additional information becomes available.

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