Compliance Stuff

Compensation is generally subject to federal income tax and FICA tax when compensation is actually paid to an employee. However, nonqualified deferred compensation (NQDC) may be subject to FICA taxation before federal income taxation under a FICA tax special timing rule. The scope of NQDC subject to FICA taxation is broad, including voluntary deferrals of salary, restricted stock units and performance stock units with deferral features, SERPs, and certain deferred bonuses. Understanding when FICA tax applies to NQDC, and how to take advantage of FICA tax timing rules, can help employers avoid errors when administering their NQDC arrangements. Below is a summary of the FICA tax special timing rule and our insights. FICA Tax The Internal Revenue Code imposes FICA tax on compensation employers pay to employees for services. FICA is comprised of two separate taxes: old-age, survivor, and disability insurance tax (OASDI) (commonly called the Social Security tax) and hospital insurance tax ...

Takeaways The new regulations apply to all employers in California and pertain to any automated decision system — not just advanced “AI” tools, but also those using selection criteria for hiring, promotions or training. Employers are prohibited from using automated decision system (ADS) or criteria that result in discrimination based on protected categories under FEHA and must accommodate religious and disability needs. Employers should consider conducting bias audits of their ADS. Related links Civil Rights Council Secures Approval for Regulations to Protect Against Employment Discrimination Related to Artificial Intelligence Navigating California’s New Regulations on Automated Decision-Making Tools Article California’s Civil Rights Department finalized regulations to curb the discriminatory impacts of artificial intelligence and automated decision-making in the workplace. The  regulations apply to all employers in California  and  take effect on  Oct. 1, 2025 . The...

  Takeaways As federal affirmative action policies have shifted, state-level responsibilities can be a higher and different bar. California reinforces its commitment to nondiscrimination in public contracting through various requirements. California contractors should assess compliance with state law and other applicable obligations. Article As federal policies shift from affirmative action and diversity, equity, and inclusion initiatives — particularly through Executive Order 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” which rescinded affirmative action mandates for federal contractors — states are filling the void. Several states, including California, and municipalities are reinforcing their commitment to nondiscrimination through compliance certification requirements. Employers seeking to do business with California should prepare to meet these obligations. California’s Nondiscrimination Requirements for State Contractors Under California law, ...

HR compliance never stands still, and the past few weeks have brought several notable updates. From new federal guidance on DEI programs to clarifications on paid sick leave calculations and evolving standards around religious accommodations, employers have plenty to keep on their radar. DOJ Offers New Direction on DEI The U.S. Department of Justice (DOJ) recently issued a memorandum directed at federal agencies and federal-funding recipients, explaining how DEI programs must align with federal anti-discrimination laws . Although this guidance primarily is aimed at organizations that receive federal dollars, even private-sector employers without federal contracts should pay attention. Of course, the DOJ’s guidance after heightened federal scrutiny of DEI efforts. President Trump’s early Executive Orders labeled certain DEI programs “unlawful,” and the Equal Employment Opportunity Commission (EEOC) attempted to provide clarity earlier this year. Now, the DOJ has reinforced those bounda...

Takeaways Employee requests to work from home have become increasingly common, often as a form of reasonable accommodation under the ADA. For employers in the financial services industry, these requests can raise complex questions about security, compliance and the essential functions of a role. Employers can meet multiple objectives by applying a structured, case-by-case approach to work-from-home requests. Article In the post-pandemic workplace, employee requests to work from home have become increasingly common — especially as a form of reasonable accommodation under the Americans with Disabilities Act (ADA) . For employers in the financial services industry, these requests can raise complex questions about security, compliance, and the essential functions of a role. But one thing is clear: a knee-jerk “no” is not the right answer. When an employee requests to work from home due to a disability, the law requires employers to engage in a timely interactive process discussion with the...

At a Glance Littler’s Workplace Policy Institute’s eighth annual Labor Day Report examines the trends we have seen thus far and offers some predictions as to what the shape of labor and employment law may be in the future. Introduction The first eight months of the Trump administration saw dramatic changes in labor and employment policy—from civil rights to traditional labor law to immigration—with more to come as key positions at oversight and enforcement agencies are filled and the executive branch’s agenda is reset in line with White House priorities. While in some instances these changes may be to the benefit of employers, that is not universal— this administration’s relationship with organized labor is, at best, a non-traditional one. Moreover, as we have seen in the past, when the federal government attempts to pare back workplace protections or tip the scale of employment and labor law in favor of management, so-called “blue states” often step in to try to fill via state law wh...