Horizon Point Consulting

Category: HRM

  • 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.

  • Navigating Mediation for Workplace Conflict

    Navigating Mediation for Workplace Conflict

    In law school I had to take two semesters of mediation and negotiation. Having been through a couple mediations myself, I found the courses very interesting and learned a lot about what I did right and what I did wrong in my own mediations. Mediation for workplace conflict gives two parties the opportunity to compromise and come to a win-win solution and oftentimes the outcome is much more favorable to both parties than a court ruling would be. But mediation also has its drawbacks. Let’s take a look at the pros and cons of mediating employment disputes.

    The Benefits of Mediation for Workplace Conflict

    • Cost-Effective: According to recent data, the average cost to defend an employment dispute in court can be up to $200,000. The average cost to mediate a claim is up to $10,000. In addition, mediation usually results in substantially less in potential settlement payout, seeking to substitute financial payout with alternative options.
    • Faster Resolution: Taking a case through the courts can be a very lengthy process, with many courts booking hearings months out. Often it involves requesting discovery information from the opposing party, deposing witnesses, and preparing for a trial. All of which can take a great deal of time and result in substantial attorney fees. Mediation can often be scheduled within a couple months of the initial dispute notification and many issues can be resolved in one or two days, with a final decision being finalized within a few days of the mediation.
    • Confidentiality: Unlike court cases, mediation is private, ensuring that sensitive information or disputes don’t become public knowledge, which can help maintain professional reputations. The relationship with a mediator is very similar to that of an attorney, meaning that you can speak to them confidentially and determine what information they can share with the opposing party. In addition, if an agreement can’t be reached and the case ends up in court, the mediator cannot tell the judge what was discussed or agreed upon during the mediation session.
    • Preserved Relationships: Court cases can get very contentious, and often times both parties are left with hard feelings. Mediation fosters communication and understanding between parties, helping preserve or even improve working relationships. This is especially valuable when ongoing collaboration is necessary.
    • Empowerment and Control: Mediation is about compromise. Both parties have a say in the outcome and can negotiate what that outcome looks like. If a case goes to arbitration or court, you are at the mercy of the arbitrator or judge to make a decision and that decision is binding. 
    • Higher Compliance: Because both parties have participated in creating the agreement, they are more likely to comply with the resolution, resulting in a more durable and lasting settlement.
    • Flexibility: Mediation allows for creative, non-monetary solutions that might not be available in a formal legal process, such as changes to workplace policies, training, or adjustments to job roles.
    • Encourages Open Communication: Mediation promotes dialogue, helping both parties express their needs, concerns, and expectations, leading to better understanding and more effective solutions.
    • Preserves Company Culture: Mediation can prevent disputes from escalating to a level that could damage the workplace environment, helping maintain a positive culture within the organization.

    By addressing conflicts early and collaboratively, mediation provides an effective, mutually beneficial approach to resolving employment disputes.

    The Downside of Mediation

    • Lack of Binding Authority: Mediation agreements are generally not legally binding unless both parties agree to make them so. This means one party could potentially disregard the agreement, leaving the other party with no formal recourse unless they go through additional legal steps. If a court requires mediation, the agreement will be sent to the judge to approve, making it legally binding.
    • Power Imbalances: Mediation between an employer and employee can create a power imbalance. The employer often times has more resources available to them to prepare and execute mediation than an employee does. The employer also has more power over the situation and can attempt to get the employee to agree to less favorable outcomes.
    • Voluntary Participation: Mediation requires both parties to be willing to participate in good faith. If one party is not genuinely committed to resolving the issue or is just going through the motions, the process may fail, and the dispute could escalate further.
    • No Guaranteed Resolution: While mediation can facilitate communication, there’s no guarantee that the dispute will be resolved. If the parties cannot come to an agreement, they may still need to resort to litigation or arbitration.
    • Pressure to Settle: Mediators may encourage a settlement to avoid prolonged conflict, which could pressure one party into agreeing to terms they don’t feel comfortable with, leading to dissatisfaction with the resolution.
    • Limited Expertise: While mediators are trained to handle disputes, they may not always have the same level of expertise in legal or technical issues as a lawyer or arbitrator would. In some cases, this could lead to an inadequate resolution or overlook important legal nuances.

    While mediation for workplace conflict can be effective and efficient, it is not without its limitations and risks. It’s important to carefully consider the nature of the dispute and the dynamics between the parties before opting for mediation.

    If you’re facing an employment dispute, consider whether mediation might be the right path for you. It’s a cost-effective, faster, and often less adversarial way to resolve conflicts while preserving important professional relationships. However, it’s essential to look at each situation independently and determine the benefits and limitations mediation would have in each case.

  • 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:

  • Make Your (HR) List and Check It Twice

    Make Your (HR) List and Check It Twice

    The end of the year is usually the busiest, with holiday planning, trying to finish up projects, and of course the dreaded year-end tasks that haunt us each year. Santa isn’t the only one making a list! Here’s a quick HR and Compliance checklist to help you make sure your organization is on the Nice List this holiday season.

    8 HR and Compliance Reminders

    1. Open Enrollment: For many organizations, it’s open enrollment time on top of everything else on your year-end plate! Make sure employees complete required paperwork in time for you to get those new deductions entered in the system before the first payroll in 2025.

    2. W-2s: As we prepare for year-end taxes and sending out the much anticipated W-2s to employees early next year, now is a great time to remind employees to update their address. And if you have email addresses for employees who terminated during the year, you might want to send them a reminder too as often times they forget to update new addresses with previous employers. 

    3. Affordable Care Act: If your organization hit the 50 Full-Time Equivalent mark this year, verify if you are required to report ACA by filing a 1094-C and providing employees with a 1095-C. If so, start preparing now. 

    4. Rate Changes: If you’re making pay rate changes for the new year, make sure you give payroll plenty of time to get the changes entered in the system. And remember, NO FLSA rate increase for 2025 is required! 

    5. Flexible Spending Accounts: If you offer an FSA, remind employees that it’s use it or lose it. Make sure your enrolled employees know important FSA dates, including the last date to incur expenses, the last day to submit expenses, and if there is any grace period offered. 

    6. Paid Leave: If your PTO doesn’t roll over or has a roll over limit, run an audit report and notify any employees at risk of losing leave. And help them determine a plan to use it or request an exception to the rollover policy if they have a valid reason for not being able to take leave during the year. 

    7. Update your compliance posters: Stroll to your employee break room and take a gander at your compliance posters. Do they need to be updated? If so, now is a great time to order new posters. 

    8. Prepare for reporting: If your organization is required to submit OSHA reporting, start prepping now. Make sure you have copies of all Worker’s Compensation claims and that your log is up to date. 

    While an HR and Compliance checklist may seem daunting, and there are probably a long list of other tasks on your individual to do list, above all else, enjoy this holiday season. 

    If you are looking for HR and Workforce Development help on a budget, we have two eCourses that might be the perfect gift to give yourself this year:

    Back to Basics: Human Resources

    Back to Basics: Human Resources

    Original price was: $99.00.Current price is: $89.00.

    This self-paced, eLearning course covers basic human resource legislation including Title VII and Discrimination, Harassment, Fair Labor Standards, Family and Medical Leave Act, and Right to Work vs. At-Will Employment.  See full course details!

    Read More

    Alabama Workforce Challenges and Solutions

    Alabama Workforce Challenges and Solutions

    $199.00

    We are experiencing unique workforce challenges in Alabama, and solutions seem out of reach. As educators, employers, and community leaders, we can move the needle forward and create workplaces that put People First.  This is a self-directed eLearning course, eligible for 15.0 hours of continuing education credit for credential holders with Center for Credentialing & Education (CCE) and/or National Career Development Association (NCDA) and may also qualify for CE credit for other credentials. 

    Read More

  • What To Know About Shopping For an HRM

    What To Know About Shopping For an HRM

    What To Know About Shopping For an HRM

    Over the past few years Horizon Point has helped multiple clients vet and implement a Human Resources Management System. Each client had very different wants and needs, and each implementation was unique. So what do companies need to know about vetting an HRM?

    1)      Understand what an HRM can offer your organization. Not every HRM system is created equally. Some systems are all-or-nothing, meaning that you cannot customize the functions you want or need, you pay for full functionality whether you use it all or not. Many vendors offer systems that are modular, meaning that you can pick and choose which functions you want built into your system and you pay based on the modules you select. HRMs have some or all of the functions below:

    a.       Data storage
    b.      Payroll
    c.       Timekeeping
    d.      Benefits administration
    e.       Applicant Tracking
    f.        Onboarding and offboarding
    g.       Performance Management
    h.      Compensation
    i.        Training
    j.        Asset Management
    k.       Employee Self-Service

    2)      Understand what you need from an HRM. Just because an HRM offers a vast array of functions doesn’t mean that your organization needs them all. Many organizations already have systems in place to manage some functions, such as payroll, timekeeping, or applicant tracking. In order to determine if these functions should be moved to a new system, you have to consider factors such as cost to convert the processes over, if the data can be imported from the old system to the new or will it have to be manually entered, or if the new HRM can work with the current systems you have in place.

    3)      Don’t just consider what your organization needs now, but what it may need in the future. Do the systems you’re considering not only meet your organization’s needs today, but will they grow with your organization and still be the right system for you in five or even ten years? Some systems are great for small businesses but as companies grow the system can no longer meet their needs and they find themselves needing to go through the vetting and implementation process all over again in just a few years. Some systems are great for large companies, but the expansive functionality is not needed for small businesses and the cost is too high. Be sure to consider if a month-to-month payment plan or a long-term contract is right for your organization as well.

    4)      What does implementation look like? As I mentioned above, I have implemented multiple systems for clients, and each vendor manages implementation differently. Generally, your company is assigned to a dedicated implementation specialist who walks you through the process of collecting and importing data. Depending on the system selected and the functions being implemented, the process can be fairly easy and take a few weeks, or can be extremely complicated and take a few months to fully set up and roll out.

    When vetting and implementing an HRM, it’s critical to understand the needs of your organization and what a system can offer you. That includes not only functionality, but growth capabilities, cost, implementation complexity, and the return on investment.

    To learn more about HRM vetting, read our blog post Selecting an HRIS that’s Right for You. If you’re interested in how Horizon Point can help you vet an HRM, ATS, you can read more about how We Help You Hire Right.