All posts by Gordon Middleton
It's officially a new year, but that doesn't mean 2025 ended without some lingering effects. Employers face an evolving regulatory environment shaped by immigration reform, AI legislation, unemployment tax adjustments, and the uncertain fate of key programs like the Work Opportunity Tax Credit (WOTC). In this blog post, we distill the most important takeaways from Experian Employer Services’ latest quarterly webinar, covering what HR, tax, and compliance teams need to know now to prepare for the rest of 2026. While Congress has been historically inactive in 2025—passing only 36 bills—the federal regulatory machine never stopped. In Experian Employer Services’ November webinar, “Quarterly Regulatory & Legislative Updates for Employers (Q4),” experts Gordon Middleton and Wayne Rottger broke down the compliance shifts that will shape the road ahead. Missed the live event? You can access the on-demand recording of Quarterly Regulatory & Legislative Updates (Q4) to hear directly from our compliance experts. This 60-minute session offers in-depth coverage of urgent topics including IRS withholding changes, state unemployment tax trends, and federal immigration enforcement. Watch now. Congressional Inactivity Doesn’t Mean Employer Invisibility Although Congress passed fewer bills than any time in modern history, executive action and federal agencies filled the gap. The president issued over 210 executive orders in 2025, and federal agencies like USCIS and DHS continued rapid-fire regulatory activity. Among the biggest changes: H-1B Visa Petitions: A controversial $100,000 petition fee for some H-1B applications was introduced in September and clarified in October. This policy is being challenged by the U.S. Chamber of Commerce and others. EAD Auto Extensions: Effective October 30, 2025, DHS eliminated auto extensions for many Employment Authorization Document (EAD) categories—including asylum applicants, TPS holders, and refugees. E-Verify Enforcement: E-Verify operations remained active through the government shutdown, a signal that immigration vetting remains a priority. Employers were reminded to submit cases timely and document any delays. One Big Beautiful Bill Act (OBBBA): Big Withholding Changes Ahead The OBBBA continues to reshape how payroll and HR teams handle tipped employees: Tip Tracking: Employers must now identify “qualified tips” tied to specific occupations using Treasury-issued codes (nearly 70 new codes were released). 2026 W-2 Draft Changes: A new Box 14B will be introduced for these occupation codes, and Box 12 will include new reporting fields. Also expect a 15-line worksheet on the 2026 W-4 draft, which expands deductions. Employer Limitation: Employers can’t force employees to adopt the new W-4, so communication strategies must be prepared in advance. Shutdowns and Backlogs: IRS and SSA Still Expect Timely Compliance Despite mass furloughs at the IRS and other federal agencies, deadlines remain intact. Automated notices are still being sent, payments are due, and limited live support is available. SSA, DHS, and ICE continued operating at high capacity during the shutdown. State-Level Legislation: The Real Compliance Movers States continued to pass meaningful reforms while the federal government stalled. Highlights include: AI Restrictions: Illinois now prohibits AI in hiring if it leads to discriminatory outcomes. Wage Theft Notices: Rhode Island’s new hire notice requirement starts January 1, 2026. Pay Transparency: Massachusetts will require employers with 25+ employees to publish pay ranges starting October 2026. Paid Leave Expansions: Nebraska mandated new minimums for employers with as few as 11 employees. Unemployment Legislation: A Rising Risk for Employers 2025 saw 188 unemployment-related bills, with many focusing on expanding access to benefits—even to striking workers. Washington and Oregon passed laws granting UI benefits during trade disputes, raising red flags about future trust fund stability. Key takeaways: Trust Fund Risk: Most state UI trust funds are underfunded. Large-scale strikes could significantly drain them. FUTA Credit Reduction: California and the U.S. Virgin Islands are likely to face FUTA reductions in 2026. California alone owes $21 billion in federal UI loans. Taxable Wage Base Increases: Half of U.S. states are increasing UI taxable wage bases in 2026, affecting employer payroll budgets. WOTC Renewal: Hopeful, But Not Done Yet The Work Opportunity Tax Credit (WOTC) expired December 31, 2025. Although it has historically been renewed retroactively, no bill has yet been introduced. Industry advocates report promising signs, but employers are advised to continue processing applications to remain retroactively compliant if renewal occurs. Final Key Takeaways Compliance Doesn’t Pause—even during a shutdown. Deadlines remain active. Prepare for OBBA Impact—new W-4 and W-2 formats will require payroll system updates. State Legislation Will Continue—watch for wage theft, pay transparency, and AI usage laws. UI Tax Changes Are Coming—plan for higher taxable wage bases and future trust fund pressures. WOTC Renewal Uncertain—continue screening and tracking candidates until further notice. Use a Trusted Compliance Partner—keeping up with regulatory changes is more than a full-time job. Stay informed year-round with the Experian Employer Services Blog. Subscribe for updates on legislative changes, compliance tools, and insights from our subject matter experts.
As employers close out another year and prepare to adjust for another year of regulatory updates, we are reminded of some items that loom large for this year and next: Changes to this year’s Affordable Care Act (ACA) reporting requirements and a new Form W-2 for next year. Below is a closer look at the changes and what your organization can do to stay ahead of the regulatory curve. Changes to ACA and 1095-C Requirements Late 2024, Congress passed an act designed to allow applicable large employers some flexibility in how they furnish forms 1095-C to their employees. Employers are no longer required to automatically send 1095-C forms to all full-time employees. Employers wishing to take advantage of the new process must instead follow the specific alternative notice methodology enacted under the 2024 laws. Essentially, employers are considered compliant if they have posted a “clear, conspicuous and accessible” notice on their benefits website informing employees that they may request a copy of the form and how they may do so. If such a copy is requested, the employer must provide the copy by either January 31 or within 30 days of the request, whichever is later. The deadline for furnishing the 1095-C or posting the notice as to how to obtain the form is March 2, 2026. Employers opting for the alternative methodology must post the “how-to” notice by that time and leave it posted through October 15, 2026. It is important to note that employers wishing to use the alternative furnishment methodology ensure they adhere to the guidance provided in IRS Notice 2025-15, which states that employers wishing to provide the requested form in electronic format, first obtain electronic consent from the employee, much as they would prior to providing an electronic W-2. New Form W-2 for 2026 In addition to changes to ACA reporting, the IRS recently released a draft Form W-2 for Tax Year 2026. The new form, which has already been edited three times, introduces new codes for Box 12, and a new box 14b to account for items introduced in the One Big Beautiful Act. The new codes are TA, for newly created “Trump Accounts”, TP, for reporting qualified tips, and TT, for reporting qualified overtime.While no changes were made to the W-2 for this tax year, employers can take some solace in the IRS announcement that no penalties will be levied regarding OBBA reporting for the current tax year. Compliance minded employers should review these items and adjust their processes accordingly. At a minimum, preparation should include a) updating employee communications regarding requesting Form 1095-C, b) coordinating with payroll providers/vendors to prepare for 2026 W-2 changes, and c) ensure they are monitoring the IRS website for any changes or updates.
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The Michigan Supreme Court, in a 4-3 decision handed down July 31, overruled the state legislature and reinstated paid sick leave laws passed via ballot initiative. The state legislature had reacted to the laws by greatly weakening them prior to the new state governor taking office, switching the executive branch to Democratic control under Gretchen Whitmer. The legislators “adopt and amend” methodology was called out by the court as unconstitutional, and the original measures approved by voters now take effect February 21, 2025. The Earned Sick Time Act provides employees with one hour of paid sick time for every 30 hours worked, up to a total of 72 hours annually. Small employers, defined as having fewer than 10 employees, would be required to offer a hybrid program of up to 40 hours of paid sick leave and 32 hours of unpaid sick leave annually. Employers that already have policies providing at least the required amount will be considered compliant. It is important to note that carryover will also be required. Earned sick time will carry over from year to year up to the yearly maximums. Employers should also be aware of the retaliation provision included in the Earned Sick Time Act. Employers are presumed to have violated to have violated the Act if they terminate employees within 90 days of use of a sick day, which may cause conflict with specific employer attendance policies. Paid sick leave continues to be a hot topic in state legislatures. While the Federal Family and Medical Leave Act guarantees up to 12 weeks leave, that time is unpaid. As of this decision, some 16 states plus the District of Columbia have paid sick leave laws in place. Employers need to ensure they are adequately tracking these laws, as they invariable have steep penalties attached regarding employer responsibilities. In addition, many of these laws call for provision of specific notifications that outline employee rights. Experian Employer Services will continue to provide legislative and regulatory updates as items affective employers develop.
Discover essential pay stub best practices for employers. Ensure accuracy, compliance and employee satisfaction with our comprehensive guide.
Unlock the mystery of payroll deductions. Discover how they work, their impact on your finances and legal considerations in our insightful guide.
Discover the importance of pay transparency laws in the workplace and stay informed about the latest equal pay and workplace fairness laws.