Welcome in, today is Tuesday, September first, and we begin with HR Dive's read on what US employers are penciling in for next year's pay. Comp teams have their first firm reference point for the twenty twenty-seven merit cycle. HR Dive reports that US firms plan to raise employee base salary budgets by an average of three point three percent next year. The same reporting notes a majority of companies also expect incentive payouts to fall below target levels, which shapes total cash, not just the merit number. Industry reaction leans skeptical on the move away from across-the-board raises. Some compensation practitioners question whether performance management systems and tooling can actually identify and reward the right people, framing merit-based distribution as a repeatedly attempted approach rather than a new fix. A recurring observation is that the twenty twenty-seven budget surveys cluster tightly in the low three percent range and look much like prior years, with some treating that flatness, alongside sub-target incentives, as the more meaningful signal than the headline figure. Also today, California. HR Dive reports that a bill banning workplace AI emotion surveillance has cleared the legislature and now sits on Governor Newsom's desk. Per that reporting, the measure would also prohibit employers from collecting an employee's neural data. It has not been signed, so nothing binds yet. If it is signed, California would set the first state limits on emotion inference and neural data at work, putting HR tech procurement and monitoring policy squarely in scope. Compliance-side commentary tends to place the bill inside a broader state patchwork rather than treating it as standalone, drawing parallels to other recent state AI transparency and audit measures. A recurring practitioner note is the gap between framing and teeth. Penalties are described as modest per-violation amounts, leading some to question how much behavior changes versus setting a definitional precedent. Separately, a federal cause finding against a major employer, the kind that sets the tone on national-origin and religious claims. The Guardian reports that the EEOC's San Jose office determined, in a letter dated June ninth, that there is reasonable cause to believe Cisco subjected a class of workers to a hostile work environment based on national origin, religion, or their association with Middle Eastern and Muslim colleagues, in violation of Title Seven of the Civil Rights Act. That determination follows complaints filed in December twenty twenty-four, per the same reporting, and it is preliminary, not a finding of liability. A Cisco spokesperson told Politico the company disagreed with the finding, and said Cisco thoroughly investigated all concerns and took appropriate action. Per that account, agency-led mediation did not produce a resolution, and counsel for the employees is weighing litigation. Related grievances at the National Labor Relations Board and the California labor commissioner remain under review. Now to a case HR Dive is holding up as a test of social media policy. The outlet's analysis centers on Karen Attiah and The Washington Post, where an arbitrator ordered the paper to reinstate her with back pay after it fired her over social media posts. That read treats the reversal as a documented limit on how far a written policy can reach into off-duty speech before discipline becomes unenforceable. Reactions in the trade center the union contract rather than free-speech principle as the operative mechanism, with a recurring view that the reversal turned on collective-bargaining arbitration rights, and that most workers facing similar discipline would have no comparable recourse. Now, a few more headlines moving the trade today. HR Dive counts eight employment lawsuits settled in August, with payouts running from seventy-five thousand dollars to twenty-one and a half million, per court records. HR Executive reports large employers are shopping for new health benefits vendors, with providers that underperform or fail to attract enough users at risk of replacement, per new Business Group on Health survey data. Spain has published a draft Royal Decree partially transposing the EU Pay Transparency Directive, per Mondaq. Consultation closed August twenty-fourth, and the text is still in draft. Bloomberg reports economists expect Friday's payrolls to show fifty-five thousand jobs added and unemployment holding at four point one percent, which that analysis reads as consistent with Fed Chair Kevin Warsh's view of full employment. And finally, the EEOC has sued Family Dollar Stores of North Carolina over firing a worker who sought time off for urgent pregnancy complications. Per the Charlotte Observer, the company did not respond to a request for comment.