Horizon Point Consulting

Author: Lorrie Coffey

  • What Employers Need to Know About the Big Beautiful Bill

    What Employers Need to Know About the Big Beautiful Bill

    On July 4th, the President signed into law the “One Big Beautiful Bill Act” (BBB), a massive budget reconciliation measure aimed at providing major tax cuts, stimulating the economy, expanding funding for defense and border protection, cutting certain social welfare programs, and raising the national debt ceiling. At nearly 900 pages, there’s a lot to digest. What follows is our interpretation of key provisions as they relate to employers.

    Tax Cuts for Employees and Employers

    As we understand it, these deductions are temporary, starting in 2025 and expiring after the 2028 tax year.

    • Overtime Wages:
      Employees who earn “qualified overtime” can deduct up to $12,500 for single filers or $25,000 for joint filers. Qualified overtime is defined under the Fair Labor Standards Act (FLSA). These deductions phase out for employees earning over $150,000 (single) or $300,000 (joint). Our understanding is that employers will need to track qualified overtime separately and report it on W-2s, although tax withholding procedures remain unchanged.

    • Tipped Wages:
      Employees can deduct up to $25,000 in “qualified tips” received in jobs that customarily receive tips prior to December 31, 2024. This deduction also phases out based on gross income. It appears that employers must continue reporting tips separately on W-2s, consistent with current requirements.

    • 1099 Contractors:
      The reporting threshold for payments to independent contractors increases from $600 to $2,000. (Are your 1099 employees misclassified? We talk about that here.)

    Changes to Benefits Programs

    • Dependent Care FSAs:
      Maximum contributions increase from $2,500 to $3,750 for single filers and $5,000 to $7,500 for joint filers. Employers are not required to adopt the new maximum, but doing so may enhance employee benefits. From our perspective, if employers choose to increase limits, plan documents should be updated with the plan administrator.

    • Paid Family and Medical Leave (PFML):
      Tax credits for PFML are now permanent. The employment period for eligibility is reduced from 12 months to 6 months, with a minimum of 20 hours/week worked. Employers required to provide leave under state/local laws can still claim credits for leave provided beyond those requirements. In our reading, the bill offers two calculation methods for the credit:

      1. As a percentage of wages paid to qualified employees during leave.

      2. As a percentage of total premiums paid or incurred for insurance covering PFML, regardless of whether leave was used.

    • Telehealth Services:
      Employers can continue to offer telehealth under HDHPs without imposing a deductible for employees or eligible dependents.

    • Employer Student Loan Payments:
      The tax exclusion for employer contributions toward student loans up to $5,250/year is now permanent. Inflation adjustments begin after the 2026 tax year. Employers should update payroll and accounting systems accordingly.

    • Relocation Expenses:
      The temporary elimination of moving expense deductions and tax-free employer reimbursements (from the 2017 Tax Cuts and Jobs Act) is now permanent.

    Immigration Compliance

    The BBB provides significant funding for ICE, which likely means:

    • More frequent and rigorous I-9 audits.

    • Increased scrutiny of hiring and retention practices for foreign workers.

    Our recommendation, based on this understanding, is that employers should conduct thorough I-9 audits, ensure all staff completing I-9 forms are trained, and consider using the Federal E-Verify system if not already doing so.

    Final Thoughts

    The Big Beautiful Bill introduces substantial changes that directly impact employers, from tax deductions and benefits program enhancements to stricter immigration compliance requirements. From our perspective, employers who proactively update policies, train staff, and adjust payroll systems will be better positioned to leverage the benefits while maintaining compliance.

    This is a complex, evolving area. Our intent here is to share our understanding and interpretation, not legal or tax advice. We encourage employers to consult directly with legal, tax, or benefits professionals to determine how these provisions apply to their specific situation.

  • Immigration and the Workforce: What History Tells Us and Why It Matters Now

    Immigration and the Workforce: What History Tells Us and Why It Matters Now

    The debate over immigration is far from new. While its political profile has intensified in recent years, immigration policy has shaped the American workforce since the country’s founding. For businesses today, whether in manufacturing, healthcare, technology, or the service sector, understanding this history isn’t just interesting context. It’s key to making sense of labor market dynamics, talent access, and long-term operational resilience.

    A Brief History of U.S. Immigration Policy

    Naturalization Act of 1790
    This first federal law to define citizenship limited it to “free white persons” of good moral character who had been in the country for at least two years and pledged allegiance to the U.S. Children under 21 gained citizenship through their parents.

    1800s: Expansion, Exclusion, and Labor Demand
    As the U.S. expanded westward and industrialized, demand for labor grew. Immigration policy reflected this, welcoming those deemed “morally fit” and economically useful. At the same time, exclusionary laws were enacted, particularly targeting Chinese immigrants, reflecting both racial prejudice and economic anxiety.

    Early 1900s: Quotas and Cultural Clashes
    Immigration began to shift from Northern and Western Europe to regions like Southern and Eastern Europe, prompting cultural tension. The Great Depression further fueled anti-immigrant sentiment, and the U.S. moved toward a quota-based system, limiting both the number and origin of immigrants.

    Post-War Adjustments and the 1965 Immigration and Nationality Act
    Mid-century reforms allowed for exceptions like war brides, refugees, and family reunification. The 1965 Act marked a major shift, prioritizing family-based and employment-based immigration, and officially ending race-based quotas.

    Modern Era: Enforcement and Employer Accountability
    Since 1965, immigration policy has focused on regulating entry through family ties and job sponsorship, while increasingly emphasizing border control and employer accountability through programs like E-Verify, H-1B caps, and DACA.

    The Workforce Today: How Immigration Policy Shapes Business Reality

    Fast-forward to the present, and immigration continues to play a pivotal role in workforce strategy. But today’s policies present significant challenges across industries and regions.

    Labor Shortages: A Structural Workforce Problem

    Today’s labor shortages aren’t a short-term post-pandemic hiccup. They reflect deep, long-term trends. Businesses across the economy are contending with:

    1. An Aging Population and Declining Birth Rates

    Over 10,000 baby boomers reach retirement age daily, but the next generation of workers isn’t large enough to replace them. Decades of declining birth rates have compounded the issue, shrinking the overall working-age population. This imbalance is especially painful in sectors that rely on experience and tenure, such as healthcare, education, and the skilled trades.

    1. Low Labor Force Participation

    Even with job openings at record highs, many prime-age adults (25–54) have exited the workforce due to caregiving responsibilities, health issues, or lack of training. As of mid-2025, labor force participation still trails pre-2008 levels, an economic signal that the problem is structural, rooted in long-term demographic and economic shifts, not cyclical fluctuations tied to short-term economic ups and downs.

    1. A Shortage of Specialized Skills

    The U.S. education and training pipeline is failing to keep pace with demand in tech and automation, emerging sectors like AI, cybersecurity, and clean energy, and trades and vocational fields (electricians, machinists, nurses). Immigration used to serve as a release valve, allowing companies to source specialized talent globally. But now, employers face caps, processing backlogs, and legal uncertainty, often losing talent mid-process.

    Policy Uncertainty and Compliance Pressures

    Immigration policy in the U.S. is often reactive and politically charged. Frequent shifts—executive orders, court rulings, and congressional stalemates—make it difficult for businesses to plan ahead or invest confidently in global talent strategies.

    Even companies that don’t sponsor visas are affected by I-9 audits, E-Verify mandates, and enforcement crackdowns. These increase compliance costs and risks, especially for small and mid-sized businesses, diverting attention from growth and innovation.

    Why This Matters Now: Economic Growth at Stake

    The U.S. has always relied on immigrants to build, grow, and adapt its economy. Immigrants are not only vital contributors to the workforce, they are entrepreneurs, innovators, and consumers. Restrictive and outdated immigration policies don’t just block workers, they block progress.

    Without strategic reform, industries will continue to struggle with talent shortages, wage inflation, and stalled innovation. Immigration policy must align with workforce realities, not hinder them.

    It’s critical that we reframe immigration not as a political flashpoint, but as a business and economic necessity. Employers, industry leaders, and policymakers must recognize that global talent is not a threat—it’s a competitive advantage. Immigration policy must reflect the real needs of the modern workforce.

    How are today’s immigration policies limiting your organization’s ability to grow, compete, and innovate?

  • What the Dentist’s Chair Can Teach Us About Leadership

    What the Dentist’s Chair Can Teach Us About Leadership

    When have you seen psychological safety in action? A few weeks ago, my youngest son, who is fifteen, had a dentist appointment. Unlike me, my kids have always enjoyed going to the dentist—or at least not dreaded it. I was always thankful, especially when they were little, that trips to the dentist didn’t end in a meltdown. And I give a lot of credit to the pediatric dentist and her staff for that.

    They had a way of making kids feel completely at ease. What helped my son feel comfortable—even in a situation where many kids (and adults!) feel anxious—was something we talk about often in leadership: psychological safety.

    The dental team welcomed questions. They showed the kids the tools, explained what they were going to do, and used language they could understand. The unknown wasn’t scary—because it wasn’t unknown anymore. Step by step, they built trust by creating an environment where curiosity was encouraged and no question was too small.

    That approach didn’t just reduce fear—it actually made him want to be there. Psychological safety in action.

    What ‘Psychological Safety in Action’ Means for Leaders

    The same principles apply at work. If we want people to show up fully, stay engaged, and take ownership, we have to create spaces where they feel safe to ask questions, express concerns, and understand the “why” behind what we’re doing.

    Motivation isn’t about pizza parties or quick perks. It’s about creating a culture where people feel energized, committed, and able to perform at their best—a culture grounded in trust and growth.

    Why Psychological Safety Matters

    At Horizon Point, we talk a lot about psychological safety—the belief that it’s okay to speak up, ask questions, and offer ideas without fear of negative repercussions. In fact, Google’s Project Aristotle found that psychological safety is the most important factor in high-performing teams. When it’s present, employees are more likely to contribute, take initiative, and stay engaged.

    Safety Isn’t Soft—It’s Strong

    But psychological safety alone isn’t enough. Part of a psychologically safe environment is the ability to manage conflict successfully. Too often, leaders avoid conflict to “keep the peace.” But as Amy Edmondson—one of the top authorities on psychological safety—says:

    “Psychological safety is not about being nice. It’s about giving candid feedback, openly admitting mistakes, and learning from each other.”

    Kim Scott, in her book Radical Candor, builds on this idea: leaders must care personally and challenge directly. Avoiding conflict isn’t protecting your team—it’s often self-serving. It creates distrust, fuels passive-aggression and resentment, and slows innovation.

    You need both – safety and conflict management skills. A team with psychological safety but no conflict skills becomes stagnant. A team with conflict skills but no psychological safety stays silent out of fear. Psychological safety in action is the foundation; healthy conflict is the catalyst for growth.

    Lead with Vulnerability and Structure

    As leaders, we set the tone by modeling vulnerability. That means admitting mistakes, inviting feedback, and showing up even when we’re unsure. As Brené Brown says in Dare to Lead:

    “Vulnerability is not winning or losing; it’s having the courage to show up and be seen when we have no control over the outcome.”

    By showing vulnerability as a leader, you give your team permission to do the same. Of course, this comes with guardrails:

    • Structure how concerns are raised.
    • Ensure communication is professional and constructive.
    • Recognize and reward honest feedback and collaboration—not just results.

    Motivated Teams Are Aligned, Not Always in Agreement

    Having a psychologically safe team that manages conflict well doesn’t mean everyone agrees all the time. It means team members respect each other’s different views and work through them constructively. Motivated teams aren’t always in agreement – they’re in alignment. That’s psychological safety in action.

    Books, books, books!

    Want to know more about the books Lorrie mentioned this week? Check them out on our Bookshop.org featured list:

  • What’s Ethical Isn’t Always What’s Easy

    What’s Ethical Isn’t Always What’s Easy

    Years ago I worked for a small company that was in financial trouble. The CEO asked me to alter payroll records because the company couldn’t afford to pay employees, employer taxes, or 401k contributions. I knew the request wasn’t just unethical—it was illegal. I also knew that refusing could cost me my job–-and it did. Situations like this—where personal and professional consequences collide—are the kind of ethical gray zones HR professionals face every day.

    Ten years ago, ethics in the workplace often meant compliance training and checking boxes. Today, it’s about how values show up in hiring decisions, leadership behavior, and even how we exit employees.

    That’s why I’m excited to be leading a session this week at the Alabama SHRM Conference, diving deep into Ethics in HR. We’ll explore core ethical principles, the most common challenges HR professionals face, and how to build a practical framework for navigating tough decisions—even in complex, uncomfortable situations where there may be no clear right answer. (We’re also launching a brand new eCourse all about Ethics in HR!)

    At the same time, with increasing attention on workplace transparency, DEI, and employee well-being, HR leaders are under more pressure than ever to make ethical decisions that align with both legal standards and evolving cultural expectations.

    Have you ever been asked to bend the rules “just this once”? What did you do? Ethics in the workplace isn’t always about obvious misconduct—it’s often about subtle pressures and competing interests.

    Ethics isn’t just a one-time conversation—it’s a critical skill set that needs to be practiced, refined, and supported by policy and culture. Whether you’re new to HR or a seasoned leader, revisiting these principles can sharpen your judgment and strengthen your voice in moments that matter. Ethical leadership starts with asking the hard questions and being willing to speak up, even when it’s uncomfortable. As HR professionals, we have the opportunity—and responsibility—to model what integrity looks like in action.

    Think about a time when you were faced with an ethical dilemma or an unclear ethics in the workplace situation. What did you do? Looking back, is there anything you would have done differently? Ethical decisions in HR rarely come with applause—but it’s essential to building organizations people can trust.

    NEW! Ethics in HR eCourse

  • Employment Law Updates: Key Changes Impacting Your Business This Year

    Employment Law Updates: Key Changes Impacting Your Business This Year

    As we have already seen in the last two weeks, with a new administration comes big changes. Let’s take a look at what we know is ahead for us with employment law updates in 2025 and what may still be to come. 

    Alabama Employment Law 

    For employers in Alabama, there are a few laws that passed last year that may have tax implications for your organization. You can click on any of the headings to read more about each of these employment law updates in 2025. 

    Childcare Center Tax Credit: This tax credit went into effect on January 1, 2025 and will run through December, 31, 2027, unless it gets extended. In order to qualify, the organization must be a childcare provider licensed by the state and participate in the Qualified Rating and Improvement System and Child Care Subsidy Program. Qualifying organizations may receive a tax credit of up to $25,000 annually to be used to against income taxes, state portion of the financial institution excise tax, insurance premiums tax, or utility license tax. 

    Workforce Housing Tax Credit: The housing credit is intended to encourage and promote investment in affordable rental housing for low-income families near employers or new areas of economic growth. It offers a dollar-for-dollar credit for certain Alabama tax liabilities. 

    Overtime Pay Exemption: The overtime pay tax exemption continues for 2025 and is currently set to expire on June 30, 2025. Currently employees are not taxed on overtime wages and the state has enforced certain reporting requirements on employers. We will keep an eye on this to see if the exemption is extended beyond the current expiration date.  

    Alabama House Bills to watch

    There are currently three bills in the state legislature bringing possible employment law updates in 2025. These are the bills under consideration that could impact employers if passed.  

    HB20: In recent years there have been a few states and localities to look at discrimination on the basis of weight, and Alabama has joined the list. House Bill 20, if passed, would make it illegal to base hiring and employment decisions on a person’s weight or body size. It’s important to note under this bill that there is not a Bona Fide Occupational Qualifications (BFOQ) exception. 

    HB21: House Bill 21 mirrors the Federal law requiring employers to provide reasonable break time and make a reasonable effort to provide a private location, other than a bathroom, for employees who are nursing mothers to use for lactation purposes. 

    HB29: House Bill 29 relates to updates to the current state unemployment benefits requirements. The primary impact of this Bill would be to change the current requirement that a recipient of benefits apply to at least three (3) positions per week to retain their benefits up to five (5) applications per week. 

    Federal Employment Law: 

    Let’s start by looking at what bills are sitting in the House and Senate that might impact employers this year, then we’ll discuss the administrative actions that have occurred in the last two weeks, what we know and don’t know about them, and how they may impact your organization. 

    There have been recent bills introduced in the House and/or Senate relating to wages for secondary employment being exempt from income taxes, updating the Immigration and Nationality Act with regards to E-Verify usage, and multiple bills that address various aspects of immigration that could have an impact on work visas and authorizations. There isn’t much information available about each of these bills yet as they were just introduced and the text has not yet been made public on Congress.gov. 

    Executive Orders

    Now let’s talk about the recent Executive Orders that have been signed by President Trump and what they may mean for your organizations. 

    In summary, there are a few major areas that we will be watching over the next year. The Executive Orders signed by President Trump leave a lot of questions unanswered and we will just have to wait and see how they ultimately impact Federal agencies and contractors, as well as other private and public employers. The primary areas to watch are

    • immigration and the impact on work visas and authorizations
    • regulations pertaining to federal contracting including DE&I initiatives
    • Title VII protections against discrimination on the basis of sexual orientation and gender identity.

    The Trump administration is focused on ending “illegal and discriminatory programs” that were implemented as part of Biden’s DE&I initiatives. President Trump has required that all Federal employment practices, union contracts, and training programs and policies be reviewed and brought into compliance with Executive Order 14151.

    EO14151 requires that employment decisions and practices be based on individual initiative, skills, and performance, and that DE&I factors, goals, mandates, etc. are not factored into the decisions. It also dictates that Federal agencies require that their contractors and sub-contractors base their employment decisions on the same, thus eliminating affirmative action employment decisions. There are a number of review and reporting requirements that are outlined and may impact Federal agencies, contractors, and sub-contractors depending upon the findings. Unfortunately, the full impact of this Executive Order may not be known for quite some time. 

    In addition to the rollback on DE&I initiatives, the Trump administration has rolled back a number of Executive Orders implemented by previous administrations including EO13988: Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation. We will have to wait and see how this recension plays out given the fact that the Supreme Court ruled in Bostock v. Clayton County, GA (2020) that Title VII of the Civil Rights Act protects from discrimination on the basis of gender identity and sexual orientation. 

    While this is a very brief overview, more information on employment law updates in 2025 (and what may be to come) can be found at the resources below:  

    A Note From Our Team

    Horizon Point believes in diverse, equitable, and inclusive workplaces. We believe that the most successful, thriving businesses are those who value People First and create a sense of belonging for those they employ and serve.

    We will continue to support our clients in driving the workplace forward through innovative people practices: our compensation plans address pay equity, our training programs are designed for diverse learning needs, and our engagement services focus on inclusion and development of all people in the workplace. To learn more about our work in these areas, read these stories from our team: