Legislative Updates

On January 22, President Trump signed an Executive Order which calls for the termination of Federal DEI programs.  Departments within the Federal Government have 60-days to comply.  It also targets federal contractors who receive federal funding.  The Office of Personnel Managment send a memo to leaders ordering all employees of DEI offices to be placed on administrative leave.  DEI websites and social media accounts were also directed to be taken down.  

Read the White House Fact Sheet at: Fact Sheet: President Donald J. Trump Protects Civil Rights and Merit-Based Opportunity by Ending Illegal DEI – The White House.  

Former President Biden signed two bills on December 23, 2024, which modify provisions under the Patient Protection and Affordable Care Act. 

The Paperwork Burden Reduction Act (PBRA) amends the Internal Revenue Code which reduces unnecessary paperwork related to health insurance reporting.  Under the PBRA for the 2024 tax year, employers are no longer required to send the 1095-B and 1095-C forms to covered individuals unless a form is requested.  Employers must inform individuals of their right to request a form.  

The Employer Reporting Improvement Act provides the following updates for tax forms due after December 31, 2024:

• allows an individual's date of birth to be substituted for the individual's TIN if the TIN is not available.
• allows employers to offer the 1095-B and 1095-C forms to individuals electronically if individuals consent to electronic forms.

The IRS recently released mileage rates for 2025.  The standard mileage rate will increase from 67 cents for 2024 to 70 cents for 2025.  Mileage for charitable organizations remains the same at 14 cents per mile.  

On November 15th, the U.S District Court for the Eastern District of Texas struck down the Biden Administration's overtime rule.  The initial rule expanded overtime pay by requiring employers to pay salaried workers a minimum of $43,888 per year as of July 1, 2024.  The threshold was set to rise to $58,656 as of January 1, 2025.  The white-collar exemptions threshold of $35,568 ($684/week) set in 2019 under the Trump administration is set to go back into effect.   

The Biden Administration recently proposed a rule which could require insurers to expand coverage to over-the-counter birth control including oral contraceptives, condoms and emergency contraception at no cost for those with private insurance.  Health plans currently cover the cost of contraceptives prescribed to members.  The new rule would allow coverage for members without the need for a prescription including contraceptives and the morning after pill.  There will be a 60-day public comment period, and the proposed rule could go into effect in 2025.  

On October 22, the IRS announced that the 2025 medical flexible spending limit will increase to $3,300 which is up $100 from 2024.  Dependent care limits remain at $2,500 for those married and filing separately or $5,000 for those single or married filing jointly.  

The Internal Revenue Service (IRS) announced that the affordability percentage will be 9.02% for 2025.  The affordability percentage is used to determine the threshold at which the cost of health insurance coverage is considered affordable under the Affordable Care Act (ACA).  Coverage will be considered affordable if an employee's self-only coverage does not exceed 9.02% of household income for 2025.  The 2024 affordability factor was 8.39%.  

The US Court of Appeals for the Fifth Circuit recently struck down the DOL's 2021 regulation which set strict limits on the amount of time tipped employees could spend performing work not related to generating tips.  The DOL issued a final rule in 2021 (often referred to the 80/20 rule) which limits the amount of time an employee can spend on work that does not generate tips to 20% of their hours in a workweek.  The ruling is considered a win for the restaurant and hospitality industry.  

On 8/20/24, a Federal Judge in Texas ruled in favor of barring the Federal Trade Commission's non-complete rule which was scheduled to go into effect on 9/4/24.  The ruling means that businesses do not need to comply with the FTC's rule which banned non-compete agreements.  Judge Ada E. Brown for the US District Court said indicated that the FTC lacks statutory authority in the matter.

USCIS recently updated the Form I-9 Form to extend the expiration date to 5/31/2027.  The edition of the Form I-9 is dated 8/1/23 which may also have an expiration date of either 7/31/26 or 5/31/27.  Employers are encouraged to update their forms to the version with the 5/31/27 expiration date.  However, either form may be used until the expiration date.