RKL’s Workforce Strategies team is here to help you navigate the complexities of today's HR environment with the updates, reminders and insights you need to maximize your most important asset — your people. We value your feedback, so let us know what you think of this newsletter!
Navigating the Federal Tax Deduction For Qualified Overtime under OBBB
The One Big Beautiful Bill Act (OBBB) allows individuals to claim a federal income tax deduction for qualified overtime, which is overtime required under FLSA. Exclusions include more generous overtime required under state laws, a collective bargaining agreement or paid voluntarily by employers.
RKL Virtual is here to help you navigate these changes so you and your employees can remain in compliance.
Employee Retention Credit Ends Under OBBB
OBBB ends the Employee Retention Credit for Quarters 3 and 4 2021. Claims filed after January 31, 2024, will not be eligible for the credit. The IRS will continue to process any Quarter 3 and 4 2021 claims filed before January 1, 2024. Additionally, the IRS now has six years to audit Quarter 3 and 4 2021 claims. The statute of limitations for 2020 and Quarters 1 and 2 2021 remains three years.
Geographic Pay Differentials in Practice Survey Results
According to the Economic Research Institute's Geographic Pay Differentials in Practice surveys, 81% of participating organizations factor in geographic pay differentials when creating their salary structures. Geographic pay differentials are salary adjustments based on the cost of labor and/or cost of living in different locations. They help to determine fair compensation levels when employees live in different geographic areas.
Benefit Trend Increasing in Popularity: PTO Purchase Programs
PTO purchase programs are gaining popularity because of the flexibility they offer employees. These programs can have a variety of structures, including allowing employees to convert PTO to cash value applied to student loan payments, 401k, HSAs, charitable contributions, monetary payouts, etc. Others can allow employees to both buy and sell their vacation days, providing flexibility for employees to tailor their time off or receive cash in a time of need.
While some employers may reap the benefits, it's important to consider whether a PTO purchase program aligns with your company's overall wellness strategies in encouraging employees to disconnect, particularly in high-performing environments where burnout may be a concern.
Using AI for Employment Decisions Raises Training Concerns
Resume Builder conducted an online survey of 1,342 U.S. managers and found that half of managers use AI to make employment decisions about their direct reports, including promotion and firing decisions. Managers reported commonly using AI to assist with developing training materials, performance improvement plans, development plans and performance reports. Two-thirds of managers using AI to manage employees haven't received any formal AI training.
Organizations should assess how their managers are using AI to manage their teams and ensure managers have the training and tools necessary to evaluate AI products and apply an appropriate level of empathy.
Beyond the Paycheck: Total Compensation Statements
Providing employees with annual total compensation statements is a great way to raise morale, improve retention and foster transparency. These personalized statements highlight an employee's full compensation, including base pay, bonuses, health benefits, retirement contributions, paid leave and fringe benefits like volunteer time off or pet insurance.
By emphasizing the benefits employees receive beyond their base pay and health insurance, employees gain a clearer understanding of their overall compensation package.
Women's Equality Day highlights the vital role of women leaders in driving progress and advocating for equity across all sectors. Their leadership inspires future generations and ensures diverse perspectives that strengthen communities and organizations worldwide.
While significant strides have been made toward achieving gender equality, challenges persist, reminding us that the journey toward true equity is ongoing. Women's Equality Day is a call to action to continue advancing these efforts.
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