Compliance Stuff

At a Glance This article provides an overview of the thousands of labor and employment-related bills introduced in the United States in the first quarter of the year and looks at trends that appear to be emerging. Ones To Watch is back with Littler’s fourth annual forecast of the year’s trendiest topics in federal and state labor and employment-related legislation. Three months into the year, with all but a handful of state legislatures currently in session, several trends have emerged for 2026. While we cannot know which of these will ultimately be enacted, the following themes stand out from the crowd. Immigration Just as in 2025, we see a significant amount of proposed legislation regarding immigration and employment at the state level. Many of these bills focus on the federal E-Verify program, which uses federal government records to confirm an employee’s authorization to work in the United States. While the program is voluntary, several states already require public employers and...

Takeaways The IRS ended 2025 transition relief so payroll systems, reporting workflows and workforce policies should be fully operational in 2026 for information returns, benefit plan operation, immigration compliance pressure, and workforce policy impacts. Immigration and benefits compliance costs rise in 2026, driven by new OBBBA mandated immigration fees, heightened worksite enforcement expectations and benefit plan updates. OBBBA provisions continue phasing in through 2028; employers should engage counsel and vendors proactively to manage compliance risk and minimize disruption. Related links OBBBA’s Tips & Overtime Tax Break: Reclassification Considerations, Reporting Requirements, Industry Impact + More IRS Guidance on Claiming the New Tax Deduction for Tips and Overtime Pay IRS 2025 Penalty Relief — A Break for Employers Under OBBBA’s Tax Reporting Rules New Tax-Advantaged Savings Accounts for Children: Trump Accounts Expected to Go Live in 2026 Federal OBBBA Roundup: What E...

A new federal law enacted last year provides a tax benefit to employees who receive overtime pay – but calling it a “No Tax on Overtime” law is a bit of misnomer. For starters, OT pay remains taxable and subject to withholding rules. And while a new income tax deduction may be available to some employees who work overtime, only a limited portion of  federally  required overtime compensation is tax deductible. We’ll clear up some of the biggest misconceptions surrounding these new rules and provide some key employer takeaways – which will become especially important this tax season and beyond as more employees learn the realities of these rules and the IRS cracks down on employers’ new filing and information reporting obligations.   Overview of “No Tax on Overtime” The One Big Beautiful Bill Act (OBBBA), which President Trump signed into law last year, includes a new federal income tax deduction related to overtime pay. This new deduction: applies for tax years  2025...