New hiring laws in Kentucky for 2027: fair chance determinations, tip pools, licensing background checks and what staffing agencies should check

As of October 2026, Kentucky's 2026 General Assembly passed few laws that change how private employers hire. The main one is HB 185 (Acts Chapter 72), in effect since April 10, 2026: it requires state hiring and licensing authorities to give people with convictions an advance ruling on whether a conviction disqualifies them, and it bars salaried employees, managers and supervisors from tip pools. Other acts that took effect July 15, 2026 add national background checks for five licensed health professions, a new route to a certificate of employability and new interstate licensure compacts; from January 1, 2027, state contracts can require certified structural welders, and state hiring and licensing authorities must have their fair chance rules in place.

Kentucky has no new pay transparency, E-Verify, AI or staffing agency licensing law, so for most private employers and staffing agencies the 2026 changes are narrow. Each item below is an act of the 2026 Regular Session, linked to the chapter on the Legislative Research Commission's site. The standing checklist (withholding and unemployment accounts, new-hire reporting, the K-4 form) is in our Kentucky hiring hub; this page is the dated list of what is new.

Which Kentucky hiring laws changed in 2026, and what changes in 2027?

Acts without an emergency clause or another date took effect on July 15, 2026, per the Normal Effective Dates page, which cites Attorney General opinion OAG 26-03. Emergency acts took effect when signed.

What does HB 185 require of hiring and licensing authorities?

Acts Chapter 72 adds a process to KRS chapter 335B, which governs public employment and occupational licenses. Any "hiring or licensing authority that considers a criminal background check as part of its application process shall establish and implement a process by which an individual who has been convicted of a crime can obtain a determination about whether the crime will disqualify the individual." A person can apply before paying for required training, gets an in-person, telephone or video hearing, and a favorable ruling binds the authority unless there are later or undisclosed convictions. Authorities must post their policy online and give it to applicants "within fourteen (14) days of application or selection for an interview."

The act also rewrites the criteria in KRS 335B.020 for deciding whether a conviction "directly relates" to the job or license, such as the nature and seriousness of the crime and the person's age at the time, and requires written findings of fact. It does not apply to cities, counties, other local governments and their subdivisions, or to the Department of Financial Institutions when it licenses. Private employers are not bound by it, but it matters to them in two ways: candidates for licensed occupations can now get an answer before paying for training, and the licensing board's ruling tells a recruiter whether the license will come. Private employer rules on criminal history are unchanged and are covered in Kentucky background check laws. The federal EEOC rescinded its 2012 arrest and conviction records guidance on October 28, 2026 (EEOC release); Title VII itself still applies.

What changed for tip pools and tipped employees?

The same act changed the wage and hour chapter, effective on signing. KRS 337.010 now defines a "tipped employee" as someone who "customarily and regularly receives more than thirty dollars ($30) per month in tips" and performs or directly supports the service function for which customers tip. KRS 337.065(4) now reads: "A tip pooling arrangement may include tipped employees. A tip pooling arrangement shall not include salaried employees, managers, or supervisors." The act's emergency clause says the change gives "clear rules regarding the permissibility of tip pools following changes in the interpretation of federal agency rules." Restaurant and hospitality offers for shift leads and salaried managers should not promise a share of the pool.

Which licensed workers now need fingerprint background checks?

HB 657 (Acts Ch. 6) requires a national and state criminal background check for applicants seeking an initial license, reinstatement, or compact authorization as a psychologist, occupational therapist, speech-language pathologist or audiologist, social worker or professional counselor, with the fee capped at the Kentucky State Police's actual cost. Results go only to the applicant or into a legal proceeding. For recruiters placing these clinicians, build the fingerprint step into the start date for anyone who is not yet licensed in Kentucky.

HB 36 (Acts Ch. 33) enters Kentucky into the Respiratory Care Interstate Compact, the Dietitian Licensure Compact (with background checks) and the Athletic Trainer Compact. When multistate practice under each compact begins depends on its commission, so check the compact's own site before telling an out-of-state candidate they can start without a Kentucky license.

What does the certificate of employability change mean for employers?

HB 5 (Acts Ch. 64) amends KRS 196.281 so that completing the Kentucky Community and Technical College System Prison Education Program counts toward a certificate of employability, alongside earlier routes such as educational credits. The statute says that in a negligent hiring claim the certificate "may be a defense for the employer" if the employer knew of it at the time, except where the employer knew or should have known the person should not be hired for the position, and that the Department of Corrections will confirm on request whether a certificate is valid. Recruiters who place people coming out of prison should ask whether they hold one and keep the confirmation in the file.

What changed in unemployment insurance?

• Recall exemption. SB 136 (Acts Ch. 123, emergency, signed April 13, 2026) exempts claimants with a bona fide return-to-work or recall-to-work prospect of no more than one year from the work search requirement. Employers and agencies that lay off and recall seasonal or project crews should document the recall date.
• Contribution rates. SB 129 (Acts Ch. 188) adjusts employer rates by subtracting 0.0115% from January 1, 2027 for the service capacity upgrade fund, with the Secretary of the Education and Labor Cabinet setting the adjustment each year.

What changes on January 1, 2027?

Besides the unemployment rate adjustment and the HB 185 rules deadline, SB 98 (Acts Ch. 201) takes effect. On projects "occurring pursuant to state government contracts" where the contracting entity asks for it and the design professional specifies AWS D1.1 or D1.5, welders doing structural steel welding must have been "tested and certified by" an AWS-accredited testing facility or an AWS-accredited individual. Homeowner and farm projects are exempt. Contractors bidding state work and the agencies that staff welders for them should ask for current AWS certification papers at screening.

What did not change in Kentucky in 2026?

• No pay transparency or salary history law for private employers, and none of the 2026 acts changed the state minimum wage.
• No E-Verify mandate; see E-Verify requirements in Kentucky.
• No staffing agency license; see Kentucky staffing agency licensing.
• Recording interviews still needs one party's consent; see Kentucky recording consent for interviews.
• Non-competes are still governed by case law; see Kentucky non-compete law.

What should staffing agencies in Kentucky check now?

1. Tip pools for hospitality placements: confirm client pools exclude salaried staff, managers and supervisors, including temporary shift supervisors you supply.
2. Health care placements: add fingerprint checks for not-yet-licensed psychologists, therapists, counselors and social workers, and verify compact privileges before a start date.
3. Candidates with records: point those seeking licensed or state jobs to the determination process, and ask returning citizens about a certificate of employability.
4. Seasonal layoffs: give recalled workers a documented recall date for the SB 136 exemption.
5. Welders: collect AWS certification for anyone you may place on state contracts from January 2027.
6. Federal changes: Form I-9 editions and the end of automatic EAD extensions apply in Kentucky too; see new hiring laws for 2027.