OBBBA’s Impact on Employers: Immigration Enforcement, Employer Provided Benefits and Compensation, Tax Liabilities

The recently enacted OBBBA affects employers in a number of significant ways including matters related to immigration, employer-provided benefits and compensation, and employment tax liabilities. With the most significant federal workplace tax and benefits changes in years, counsel should understand the impact on employer clients and how to best advise them on new compliance obligations.

For example, OBBBA's immigration-related changes will likely affect who employers recruit, employ, and sponsor as foreign workers as it outlines new and increased fees on a number of immigration-related applications and processes and may potentially cause delays as employees work to obtain or renew their work authorization. OBBBA also increases ICE's budget which will likely result in increased immigration enforcement. 

Changes related to employer-provided health and welfare benefits and compensation include, among others: (1) an increase in the maximum annual exclusion for IRS Sec. 125 dependent care FSAs from $5000 to $7500 and an increase to the employer-provided childcare credit from $150,000 to $500,000; (2) an extension and enhancement of the paid family and medical leave credit; and (3) a limited deduction for overtime pay premiums under the FLSA and a separate deduction for tipped workers, allowing them to deduct up to $25,000 of qualified tips earned.

Listen as our expert panel provides a comprehensive overview of OBBBA's impact on employers and offers best practices for navigating this rapidly evolving regulatory landscape.

I. Introduction

II. OBBBA employer impact

A. Immigration

1. Increased ICE budget

2. Fees for applications and processes

B. Employer compensation and benefits, tax liability

1. Overtime and tips

2. Commuting and moving expenses

3. Executive compensation

4. FSAs and HSAs

5. Paid family and medical leave programs

6. Enhanced childcare credit

7. Tax-deferred savings accounts for children

8. Other

C. Workforce Pell Grant program and DOL involvement

III. Best practices for compliance

A. Policy and procedural review and revisions

B. Contacting vendors

C. Preparing for agency investigations

IV. Practitioner takeaways

The panel will review these and other key considerations:

• What OBBBA changes pertaining to immigration may impact employers? How?
• How does OBBBA affect employment-related tax liability?
• What OBBBA changes related to employer-provided benefits and compensation should counsel and employer clients be aware of?
• What should employers be doing now for OBBBA compliance?