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HR and payroll leaders are facing a workplace environment that is more complex—and more consequential—than ever. Regulatory change continues to accelerate; workforces are becoming increasingly decentralized, and expectations around employee experience and data privacy are rising. Within this landscape, traditional employer services models are showing signs of strain, requiring organizations to rethink how compliance and workforce operations are designed and delivered. Employers today play a far more significant role than simply administering pay and benefits. They influence critical life moments: an employment verification can determine whether someone secures housing or a loan, onboarding delays can shape an employee’s first‑day impression, and a tax withholding error can undermine trust long after tax season. This evolving relationship requires a shift from a reactive compliance posture to a more proactive, data‑driven, human‑centered operational model that prioritizes enablement, clarity, and support across the entire employee lifecycle. The Compliance Reality Check Several forces are redefining compliance expectations this year. Increased scrutiny around identity verification and work authorization means I‑9 accuracy, timeliness, and audit readiness are more important than ever, especially for decentralized and hybrid hiring. At the same time, unemployment insurance fraud prevention is reemerging as a top priority, prompting organizations to adopt tighter controls, cleaner data flows, and clearer ownership between HR and payroll. Ongoing changes to ACA reporting at both federal and state levels further increase the need for consistent, reliable source‑of‑truth data to avoid penalties, rework, and operational disruption. Compliance mistakes now carry consequences that extend beyond fines. They can erode employee trust, impede hiring, and create operational distraction at moments when precision and agility are essential. Shifting from Reactive to Real‑Time Control Building a resilient HR operating model requires treating compliance as an always‑on discipline rather than a series of corrective tasks. Maintaining a continuous audit‑ready posture, synchronizing identity and payroll data into a unified source of truth, and embedding preventive controls directly into workflows help eliminate after‑the‑fact fixes and reduce manual intervention. Organizations that formalize time‑bound service levels for I‑9 completion, employment verifications, and corrections—and that consistently report on their adherence—gain transparency that fuels accountability and performance. Designing processes with employees and managers in mind also reduces friction, improves accuracy, and shortens cycle times. Technology as a Strategic Enabler Modern technology plays a central role in strengthening oversight, improving decision quality, and reducing administrative workload. Digital I‑9 processes minimize errors, support compliant remote onboarding and preserve clean audit trails. Automated employment and income verifications speed employees toward critical life events while reducing manual effort and risk. Intelligent compliance dashboards bring together data from HRIS, payroll, and supporting systems to surface exceptions, highlight SLA breaches, and expose blind spots that might otherwise go undetected. When policies and regulatory rules are translated into system logic, compliance becomes proactive—preventing errors before they occur rather than correcting them after the fact. Maturity Through Meaningful Metrics Organizations that measure what matters can move from guesswork to governance. Tracking indicators such as I‑9 completion accuracy, E‑Verify timeliness, resolution times for tentative non confirmations, verification turnaround times, employee satisfaction scores,ACA data alignment, fraud resolution rates, audit recurrences and correction times enables leaders to monitor exposure and continuously elevate performance. These metrics not only signal operational maturity but also reinforce a culture of accountability and continuous improvement. Reclaiming Strategic Capacity Automating core compliance activities allows HR and payroll teams to redirect valuable time toward more strategic initiatives. With accurate data and reliable processes, organizations can accelerate workforce planning, streamline onboarding, and improve pay accuracy. When employees and managers encounter fewer steps, clearer guidance, and less rework, the overall experience improves—supporting engagement, trust and productivity. Compliance becomes not just protective but empowering, enabling more strategic HR leadership at every level. Governance That Scales Effective governance is essential for maintaining consistency and reducing risk as processes mature. Clear alignment ensures everyone understands who owns, approves and monitors each control. Regular control reviews tied to regulatory updates and incident trends help organizations stay ahead of change. Playbooks for common exceptions, such as tentative no confirmations or rehire scenarios, improve response consistency while immutable audit trails enhance transparency, traceability and security. A Modernized Approach Pays Off A contemporary, audit‑ready compliance model reduces risk exposure, accelerates time‑to‑hire, minimizes rework and strengthens employee trust. With real‑time visibility and lower operational variance, leaders gain the confidence to make faster, more informed decisions. Put simply, organizations that modernize their compliance posture experience fewer surprises and deliver better outcomes for both the business and its people. Moving Forward Expectations are rising, regulatory oversight is intensifying, and the pace of technological advancement shows no signs of slowing. In this environment, clinging to outdated processes is no longer sustainable. Modernizing workflows, establishing real‑time controls and elevating the employee experience are not only competitive advantages—they are essential components of a resilient, future‑ready HR strategy. Schedule time with an HR compliance expert to learn how you can incorporate technology to modernize your workflows.

On January 30, 2026, the Internal Revenue Service released the final General Instructions for Forms W-2 and W-3 for the 2026 tax year. While much of the guidance builds on prior years, the final instructions reflect several important updates tied primarily to Public Law 119-21, the One Big Beautiful Bill Act (OBBBA), along with refinements from the draft instructions issued earlier in January. For employers, payroll providers, and HR teams, the 2026 instructions introduce new reporting codes, expanded data elements, and clearer explanations around how certain types of compensation must be reported, even where the underlying tax treatment has not changed. As always, organizations should evaluate how these updates apply to their specific circumstances. Below is a high-level summary of the most notable changes in the final 2026 instructions. This overview is for informational purposes only. Big picture: more granular reporting, not less responsibility Many of the 2026 updates focus on how information is reported, rather than whether it is taxable. In several areas, particularly tips and overtime, the IRS makes clear that while new deductions may be available at the individual level, employer reporting and payroll tax treatment largely remain the same. The result is more detailed W-2 reporting and a greater emphasis on accurate classification and data capture. Expanded reporting for tips The 2026 instructions introduce new reporting requirements related to tipped wages. A new Box 12 code, TP, must be used to report the total amount of cash tips reported to the employer. Box 14 has been split into Box 14a (Other) and Box 14b, with Box 14b dedicated to reporting Treasury Tipped Occupation Code(s) when tips are reported using code TP. Despite the new deduction for qualified tips under OBBBA, the final instructions reiterate that tips are generally subject to federal income tax withholding and both the employer and employee share of Social Security and Medicare taxes when the twenty-dollar-per-month threshold is met. This distinction underscores that deductions available on an individual’s tax return do not change employer withholding and reporting obligations. New reporting code for qualified overtime The final instructions introduce Box 12 code TT for reporting qualified overtime compensation. The IRS added clearer language than what appeared in the draft instructions. Only overtime compensation required under the Fair Labor Standards Act qualifies, and only the premium portion of overtime pay is reported. For example, in a time-and-a-half scenario, only the additional half of the overtime rate is reported using code TT. As with tips, the IRS clarifies that overtime compensation is still generally subject to federal income tax withholding and payroll taxes, even though certain deductions may apply at the individual level. Wage reporting threshold increase For wages paid after calendar year 2025, the wage reporting threshold increases from six hundred dollars to two thousand dollars when no federal income tax, Social Security tax, or Medicare tax is withheld. The threshold will be indexed for inflation beginning after 2026. This change may reduce reporting in limited situations, but it does not eliminate W-2 filing requirements where withholding occurs. Box 14 structural changes To accommodate new reporting needs, Box 14 has been split into Box 14a (Other) and Box 14b (Treasury Tipped Occupation Code[s]). Box 9 was reduced in size to allow for additional Box 14a entries. These layout changes may require payroll system updates to ensure accurate formatting and data placement. Trump account reporting Public Law 119-21 introduces Trump accounts, a new type of individual retirement account for children under age eighteen. For 2026 reporting, employers must use new Box 12 code TA to report employer contributions made under a Section 128 Trump account contribution program. Employer contributions may begin July 4, 2026, subject to annual limits and income exclusion rules. The final instructions provide less detail than the draft and direct employers to Publication 15-A for additional guidance. What changed from the draft instructions Compared to the draft issued earlier in January, the final instructions shortened and streamlined the discussion of Trump accounts, clarified that tips and overtime remain subject to payroll taxes, and added a concrete example explaining how only the premium portion of overtime pay qualifies for reporting under code TT. A note on interpretation This overview is intended for informational purposes only. Employers and individuals should review the full IRS guidance and verify how the rules apply to their specific facts and circumstances. Looking ahead The 2026 W-2 and W-3 instructions reflect a broader trend toward more detailed wage reporting, particularly for compensation types that may be subject to special deductions or increased scrutiny. For organizations, the focus will be on ensuring systems, data flows, and classifications align with updated requirements well before year-end reporting. Experian continues to monitor regulatory developments to help organizations stay informed as reporting requirements evolve. Connect today to learn how you can streamline your year-end tax compliance tasks to save time and improve your workflow.

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Human resources (HR) departments are responsible for a wide range of tasks related to employees and their well-being, from recruitment and hiring to compensation, benefits, training and performance management. These job functions can overwhelm HR departments, especially if they don’t have the tools and resources to perform their daily tasks efficiently. In many HR departments, you’ll find HR technology that staff regularly uses to streamline operations, such as onboarding and offboarding. Whether you’re a large corporation or a growing startup, HR technology is essential for any well-run business. In this guide, we’ll walk through everything you need to know about HR technology, from how it can help increase efficiency to emerging trends. What Is HR Technology? HR technology is an umbrella term that refers to the software and hardware human resources departments use to streamline operations and enhance HR processes and functions. The software, tools and systems that make up these technology solutions help automate repetitive tasks, improve efficiency and compliance, and provide essential data that HR departments can use to make informed decisions. Some of the common HR areas where technology is applied include: Performance management: Innovative HR technology can help with employee performance management by offering teams tools to set goals, receive feedback and track performance and evaluations to ensure employees progress in their careers. Learning and development: Many HR technology solutions offer learning management systems, which are platforms employees can access to build their skill sets and knowledge through online courses and virtual classrooms. Employee management: HR technology like Human Resource Information Systems (HRIS) enables HR departments to manage employees by accessing employee data, automating workflows and generating reports. Compensation and benefits management: HR technology can also help automate compensation and benefits tasks, such as payroll, benefits enrollment and time tracking, which can help reduce errors, improve employee engagement and ensure compliance. These are just some of the many areas where HR technology can be instrumental in the success of a business’s operations and employee engagement. To see how HR technology can help your organization, keep reading to learn how HR technology can increase efficiency. How the Right Technology Can Increase Efficiency One of the primary benefits of HR technology is its ability to increase efficiency in a variety of ways. From boosting productivity to automating time-consuming tasks, there are several ways HR technology can streamline processes, automate workflows and boost your bottom line. Streamline Onboarding The employee onboarding process can be lengthy and expensive. Fortunately, HR technology can cut costs and speed up onboarding to fill roles quickly with qualified employees. Some of the ways HR technology can streamline onboarding include: Verification fulfillment: It’s important to ensure job applicants are who they say they are. With verification fulfillment services, you can easily verify an applicant’s employment and income with consent. I-9 administration: One part of the onboarding process is ensuring workers are authorized to work in the United States. HR technology can streamline the I-9 administration process to verify new hires’ identities and employment authorization. Onboarding portal: In many cases, HR technology provides a centralized onboarding portal where new hires can easily access all the necessary documents, information and forms needed to start their new roles, such as company policies, training materials and additional resources. E-signatures: Rather than waiting days or weeks for important onboarding forms and documents to be signed by a new hire, you can easily collect authorized e-signatures that eliminate physical paperwork and securely store digitized documents like tax forms, employment contracts and benefit enrollment forms. Streamline Offboarding In addition to streamlining employee onboarding, HR technology can streamline offboarding by automating tasks and ensuring compliance. With HR technology, you can help employees transition smoothly as they depart. Some ways HR technology can streamline offboarding include: Unemployment management: For employees let go from their positions, unemployment management solutions can help HR departments remain compliant with changing federal and state regulations, recover unemployment insurance overpayments and receive hearings representation, among other benefits. Compliance management: In certain scenarios, offboarding can lead to legal risks if the necessary steps aren’t taken. HR technology can help companies access compliant documents, follow the proper exit interview procedures and manage documentation. Receive feedback: It’s important to understand why employees may depart from your organization, and solutions can help you conduct exit interviews and receive feedback that can be used to gain valuable insights that can be used to improve your organization. Improve Retention Organizations need to focus on employee retention because the employee onboarding and offboarding processes can be costly and time-consuming. HR technology can help improve the employee lifecycle by increasing engagement and job satisfaction. Some ways an efficient HR department can improve retention with the right technology include: Tax withholding compliance solutions: Tax seasons can be stressful for employers and employees. HR technology, like tax withholding compliance solutions, can create a stress-free payroll process that ensures employees complete all required federal, state and local tax forms that improve accuracy and compliance. Year-end tax statements: Year-end payroll can be intense for HR departments. HR technology can help streamline year-end payroll reports and tax statements that allow HR teams to manage reissues and corrections with ease, deliver multiple tax statements on one form and increase the productivity of your HR department, all of which can increase employee satisfaction come tax time. Payroll tax services: Organizations with poor payroll tax services can drive employees away, especially if they’re experiencing issues like noncompliance or security issues. HR technology can offer payroll tax services that follow high-level security protocols, automate tasks and more. ACA reporting: With HR technology like ACA reporting services, you can ensure the timely delivery of ACA forms to employees to increase compliance and employee satisfaction. These are just some of the ways to improve employee retention. Other methods include performance management, learning and development platforms that enable employees to progress in their careers, employee recognition platforms that increase engagement and more. Maximize Tax Credit Opportunities HR technology can also increase efficiency by enabling HR departments to maximize tax credit opportunities. With solutions like tax credit management services, HR departments can quickly identify, apply and comply with tax credit requirements, such as the Work Opportunity Tax Credit, Employee Retention Tax Credit, Disaster Zone Tax Credit and Family Medical Leave Act Tax Credit. Trends in HR Technology As a business, staying up-to-date on current trends is always important to ensure you’re optimizing workflow and ensuring employees are satisfied. This is especially true in the post-pandemic world, where the landscape of many working environments has changed drastically, such as the rise in remote and hybrid work. More Transparency One of the top trends of HR technology is increasing transparency. With remote and hybrid work becoming the norm in many industries, employees can feel removed from their colleagues and culture. To prevent this, HR technology focuses on transparency by offering portals for feedback, performance evaluations and increasing employee privacy. Embracing Remote and Hybrid Work Remote and hybrid work is rising in the post-pandemic world, and technology must keep up. Recent trends show HR technology adapting to these needs by offering flexible work arrangements with access to mobile apps and platforms that allow employees to access HR services, performance tools, training materials and collaboration platforms anywhere they have a stable internet connection. Hiring and Retaining Workers With the work landscape changing, so are employee attitudes about loyalty and commitment. Some trends show an increase in job-hopping, where employees move jobs within a few years or less compared to older generations who may have stayed at an organization for decades. To retain workers, HR technology will continue to focus on hiring and retention strategies, such as offering diversity, equity and inclusion (DEI) tools to create a more inclusive workplace environment, learning experience platforms that help employees build their skills and more. AI and Cloud-Based HR Technology While artificial intelligence and machine learning have been around for decades, the past several years have seen a sharp increase in the accessibility of AI and cloud-based technology in all aspects of life, including HR. One of the top trends here to stay is AI and cloud-based technology, as AI can easily automate mundane tasks and boost efficiency, while cloud-based platforms can help increase accessibility and efficiency. AI and cloud-based solutions can also offer a more personalized employee experience, help leaders make informed decisions and make data more digestible. Employee Wellness In order to attract and retain top talent, employee wellness needs to be top of mind. HR technology can help organizations address employee engagement and well-being with features like surveys, social recognition platforms, well-being programs and mental health support to promote a positive workplace environment. With Experian Employer Services, your HR team can gain access to workforce management solutions that can improve the employee life cycle and your bottom line.

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