Maine

/in

Maine: New Regulations on Employee Surveillance

APPLIES TO

All Employers with Employees in ME

EFFECTIVE

TBD (Anticipated Summer 2026)

QUESTIONS?

Contact HR On-Call

(888) 378-2456
Quick Look

  • Maine has enacted a comprehensive employee-surveillance statute that restricts permissible workplace monitoring activities.
  • The law imposes new employer notice obligations and authorizes enforcement by the Maine Department of Labor.

Discussion

Maine’s new law, enacted under LD 61 and titled An Act to Regulate Employer Surveillance to Protect Workers, positions Maine among the few states with statutory surveillance requirements, but goes much further than the notice-only approaches adopted in other states.

 

LD 61 regulates “employer surveillance,” broadly defined as monitoring employees through computers, phones, radios, or other electronic systems, including electromagnetic, photoelectronic, and photo‑optical tools. The statute applies to both public and private employers, and its definition of “employee” includes any individual who provides services in exchange for wages or remuneration, suggesting that the law may reach certain contract workers as well. The law does include several exclusions, such as employer use of surveillance cameras for safety or security purposes, GPS or safety systems installed on employer‑owned vehicles, and certain monitoring activities in “personal care services” settings where surveillance may be conducted by employers, clients, patients, or unpaid caregivers.

 

Under the law, employers are prohibited from engaging in surveillance in an employee’s home, on the employee’s personal property, or in the employee’s personal vehicle, unless such surveillance is genuinely required for the employee’s job duties. The law also prohibits employers from requiring employees to install data‑collecting or monitoring software on their personal devices. Employees have a statutory right to refuse such requests, a limitation that may significantly impact bring‑your‑own‑device policies and the design of remote‑work technology systems.

 

In addition to these prohibitions, LD 61 imposes several notice obligations for employers. Specifically, employers must:

  • Inform employees before implementing any form of electronic surveillance;
  • Disclose their monitoring practices to job applicants during the interview or hiring process; and
  • Provide employees with an annual written notice confirming that surveillance is being conducted.

Notably, however, the law does not require a workplace posting, nor does it require employers to collect written acknowledgments from employees.

 

The Maine Department of Labor has authority to enforce the statute, and violations carry civil penalties ranging from $100 to $500 per violation. There is no private right of action, meaning employees cannot sue directly under the law, but the penalty structure still creates meaningful compliance risk for employers with large workforces or widespread monitoring tools.

 

The Act will become effective 90 days after the close of Maine’s current legislative session, with an anticipated effective date sometime in summer 2026.

 

Action Items

  1. Audit existing use of employee surveillance tools and identify systems that may require modification under the new requirements.
  2. Prepare for employee and applicant notice requirements.
  3. Have appropriate personnel trained on employee surveillance requirements.

 

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2026 ManagEase

Maryland

/in

Discussion

Baltimore, MD: Requirement for Pregnancy Accommodations in Effect for Employers

As of January 10, 2026, Ordinance 25‑078 requires Baltimore employers with two or more employees to provide reasonable accommodations for pregnancy, recovery from pregnancy, or a related condition. Examples of reasonable accommodations include, but are not limited to: (1) offering an eligible employee more frequent or longer breaks; (2) acquiring or modifying accessible equipment or seating; (3) temporarily transferring an eligible individual to a less strenuous or hazardous position, if available, with return to the current position after pregnancy or recovery; (4) restructuring of an eligible individual’s job; (5) assigning an eligible individual light duty; (6) providing an eligible individual with assistance for manual labor; and (7) allowing an eligible employee to take a modified work schedule. Employees have protections from adverse actions for requesting or using a reasonable accommodation. Employers are also required to develop and implement a written pregnancy accommodation policy and include it in a handbook, if one is provided.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2026 ManagEase

New Jersey

/in

New Jersey: Expanded Leave Obligations, Reporting Requirements, and Public Works Regulations

APPLIES TO

As Indicated

EFFECTIVE

As Indicated

QUESTIONS?

Contact HR On-Call

(888) 378-2456
Quick Look

  • New Jersey’s Family Leave Act is significantly expanded to cover more employers and add additional employee protections.
  • In accordance with amendments to New Jersey’s Unemployment Compensation Law, all employers must report all employee separations electronically to NJDOL through the Employer Access portal.
  • Public entities must include a project labor agreement in all public works projects, regardless of the project cost.

Discussion

Expansion of Family Leave Act

 

Effective July 17, 2026, A2451/S2950 significantly expands New Jersey’s Family Leave Act (NJFLA). The most notable changes are:

 

  • More Employers Are Covered. The law will apply to employers with 15 or more employees instead of just those with 30 or more employees. One year after the effective date of the law, it will apply to employers with ten or more employees. The following year, it will apply to employers with five or more employees.
  • Expanded Employee Eligibility. Employees are eligible for family leave after three months of employment and 250 hours worked.
  • Coordination with Other State Benefits. If employees are eligible for paid sick leave under the New Jersey Earned Sick Leave Act, Temporary Disability Insurance (TDI) benefits, or family temporary disability leave, they have the right to choose which benefits to use and when to use them. Employees are still limited to only taking one paid benefit at a time.

 

The law has also created some confusion regarding job protection which is awaiting additional clarification. It states that individuals receiving TDI benefits for their own medical condition are entitled to job protection. Since NJFLA does not provide for job protection, there are questions around whether this means a new job-protected medical leave entitlement is being created. Employers should monitor the state’s Department of Labor & Workforce Development (NJDOL) website for additional guidance.

 

Mandatory Reporting of Employee Separations

 

Effective December 8, 2025, in accordance with amendments to New Jersey’s Unemployment Compensation Law, all employers must report all employee separations electronically to NJDOL through the Employer Access portal. Separations include layoffs, terminations, resignations, and retirements. Reporting is required immediately after an employee is separated. Failure to provide the required reporting will result in penalties for employers.

 

Project Labor Agreement Required on All Public Works Projects

 

Effective January 20, 2026, A3970 requires public entities to include a project labor agreement in all public works projects regardless of the project cost. The requirement applies to municipalities, countries, school districts, and fire districts and other similar public entities. A project labor agreement is a pre-hire collective bargaining agreement that incorporate, by reference, the separate labor contractors of union members working on the project. Public contractors should review the requirement with their legal counsel to determine the law’s impacts.

 

Action Items

  1. Review and update leave of absence policies.
  2. Update procedures for separation of employment to include immediate reporting to NJDOL.
  3. Review project labor agreements with legal counsel, if applicable.
  4. Have appropriate personnel trained on the updated requirements.

 

 

New Jersey: Attorney General Guidance for Discrimination Based on Language or Accent

The New Jersey Attorney General provided guidance for the treatment of discrimination based on an individual’s language or accent. Although the state’s Law Against Discrimination does not address language bias, the Attorney General’s guidance stated that such discrimination can be linked to other protected traits like religion or national origin, which is expressly prohibited by the law. That said, the guidance makes clear that language by itself is not a protected characteristic. As an example, the guidance states that a New Jersey employer who does not stop workers from harassing an employee on their accent could face a discrimination claim. Employers should update their discrimination and harassment policies accordingly.

 

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2026 ManagEase

New York

/in

New York: New Laws for 2026!

APPLIES TO

As Indicated

EFFECTIVE

As Indicated

QUESTIONS?

Contact HR On-Call

(888) 378-2456
Quick Look

  • Paid family leave benefits are extended to include certain construction workers.
  • Disparate impact liability is recognized as a method of establishing unlawful discrimination under New York’s Human Rights Law.
  • Employers are prohibited from using reimbursement clauses or promissory notes as a condition of employment.
  • Amendments to the Healthy Terminals Act (Act) went into effect on January 1, 2026. Due to some confusion created by the amendments, the New York State Department of Labor issued implementation guidance and FAQs to address the most common questions.
  • Employers are prohibited from using consumer credit history checks in hiring, employment, and licensing determinations.

Discussion

Several laws were signed by Governor Hochul at the end of last year impacting requirements for employers in 2026. In addition, clarifying guidance was issued for laws that went into effect at the beginning of the new year. The most significant updates are summarized below.

 

Paid Family Leave for Construction Workers

 

Effective December 19, 2025, S50 extends paid family leave benefits to employees who perform construction, demolition, reconstruction, excavation, rehabilitation, repairs, renovations, alterations, or improvements for multiple employers pursuant to a collective bargaining agreement. Currently, employees must work for 26 consecutive weeks to be eligible for benefits paid family leave benefits and they must re-qualify if they return to work with a different employer after an agreed and specified unpaid leave of absence. They must also requalify if they are temporarily laid off.

 

S50 amends the law to allow construction workers to remain eligible when: (1) they return to work with the same or different covered employer after an agreed and specified unpaid leave of absence; or (2) they return to work with the same or different covered employer after a lay-off, provided they had worked at least 26 of the last 39 weeks. The purpose of the law is to address the fact that the construction industry frequently requires union workers to work for multiple employers for short periods of time or to be laid off briefly between jobs, thereby making them ineligible for paid family leave benefits.

 

Disparate Impact Liability Recognized

 

Effective December 19, 2025, S8338 recognizes disparate impact liability as a method of establishing unlawful discrimination under the state’s Human Rights Law. Plaintiffs can now bring a case arguing that a challenged practice had or predictably would have a disparate impact on a protected class under the Human Rights Law even if the practice was not motivated by discriminatory intent. A defense exists where the challenged practice: (1) job related for the position in question and consistent with business necessity; and (2) the business necessity could not be served by another practice that has a less discriminatory effect.

 

Trapped at Work Act

 

Effective December 19, 2025, S4070B prohibits employers from using reimbursement clauses or promissory notes as a condition of employment. This includes repayment agreements for an employee who leaves their employment before a certain date, as well as reimbursement agreements for employer-provided training. There are several specific agreements which are exempt from this prohibition:

 

  • An agreement that requires the repayment of an advance;
  • An agreement that requires the worker to pay for any property that was sold or leased to them by the employer;
  • An agreement that requires educational personnel to comply with the terms and conditions of sabbatical leaves; or
  • An agreement subject to a collective bargaining.

 

Violations of this law can result in a fine of between $1,000 and $5,000 for each violation.

 

Employers should note there is a pending amendment (A9452) which would further narrow the types agreements affected and provide additional clarity if it is enacted.

 

Guidance on Healthy Terminals Act Amendment

 

Amendments to the Healthy Terminals Act (Act) went into effect on January 1, 2026. Due to some confusion created by the amendments, the New York State Department of Labor issued implementation guidance and FAQs to address the most common questions.

 

  • Covered Employees and Airport Locations. The law applies to anyone who works at least 50% of their time during any work week at a covered airport location. A covered airport location includes LaGuardia and JFK International airports and locations from where food to be consumed on airplanes departing from the above airports is prepared or delivered. Employees of the Port Authority of New York and New Jersey and employees of any other governmental agency are not covered by the Act. In addition, workers employed in an executive, administrative, or professional capacity as defined by the federal Fair Labor Standards Act are not covered by the Act.
  • Applicable Minimum Wage Rate, Benefit Rate, and Paid Leave. The applicable rates are: (1) the minimum wage rate established by the Port Authority of New York and New Jersey; (2) the health and welfare supplemental wage as designated by the NYS Commissioner of Labor; and (3) paid leave as designated by the NYS Commissioner of Labor.
  • Posting Requirement. Employers must post the required posters as provided by NYSDOL in a conspicuous place at worksites where workers will see it.

 

Employers should note the guidance and FAQs are not formal rulemaking and are suggested recommendations for compliance.

 

Ban on Credit History Checks in Employment

 

Effective April 18, 2026, S3072 prohibits the use of consumer credit history checks in hiring, employment, and licensing determinations. Consumer credit history is defined as an individual’s credit worthiness, credit standing, credit capacity or payment history as indicated by a consumer credit report, credit score, or information obtained about an individual’s credit accounts, late or missed payments, charged-off debts, collections history, credit limit inquiries, bankruptcies, judgments, or liens. There are limited exceptions for employers who are required to perform such checks if required by state or federal, for positions subject to a security clearance, positions that are non-clerical where the individual has regular access to trade secrets or intelligence information (including national security information), those have a fiduciary responsibility or signatory authority over funds or agreements valued at $10,000 or more, or those whose duties allow them to modify digital security systems intended to prevent unauthorized use of the employer’s or client’s networks or databases.

 

Action Items

  1. Update paid family leave policy, if applicable.
  2. Discuss claims regarding disparate impact liability with legal counsel.
  3. Review employment agreements containing reimbursement clauses or promissory notes with legal counsel.
  4. Review and update wages, benefits, holidays, and vacation requirements for airport workers, if applicable.
  5. Review and update employment applications and background check procedures to comply with new prohibitions.
  6. Have appropriate personnel trained on the updated requirements.

 

 

New York, NY: Minimum Wage Standards for Security Guards

New York City has enacted the Aland Etienne Safety and Security Act, establishing citywide minimum wage, paid time off, and fringe-benefit standards for private sector security guards. The law applies to any private employer with at least one registered security guard working in NYC, with certain exclusions for federal, state, and Port Authority employers. Beginning January 1, 2027, covered employers must pay hourly wages that match or exceed those required on certain NYC public building service contracts. On January 1, 2028, covered employers must also provide paid holidays, vacations, and sick leave, and on January 1, 2029, they must offer supplemental benefits like health insurance or retirement contributions that are equivalent to those required on the same public contracts.

 

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2026 ManagEase

Ohio

/in

Discussion

Ohio: E-Verify Requirements for Nonresidential Construction Employers

While E-Verify is voluntary for most private employers, effective March 19, 2026, HB 246 will require Ohio nonresidential construction employers to use the system for new hires. Failure to do so may result in notification of non-compliance, penalties ranging from $250 to $25,000, and potential restrictions on bidding for or participating in future state contracts for two years.  “Nonresidential construction” is defined as the building, renovation or improvement for any building, highway, bridge, utility or similar infrastructure in the state. This law does not apply to residential construction employers, manufactured or industrial builds, mobile homes or agricultural construction.  Nonresidential construction that occurs outside of Ohio is also exempt from this requirement.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2026 ManagEase

Oregon

/in

Oregon: Paid Leave Oregon Job Protection Updates

APPLIES TO

All Employers with Employees in OR

EFFECTIVE

JAN 1, 2026

QUESTIONS?

Contact HR On-Call

(888) 378-2456
Quick Look

  • In accordance with the 2025 amendments to Paid Leave Oregon (PLO), the Oregon Employment Department (OED) issued revised regulations regarding the PLO program’s job protection benefits.
  • Job protection is required for employees on PLO leave who have been employed for at least 90 consecutive calendar days.
  • Upon return from PLO leave, employees must be returned to their former position with the same rate of pay, benefits, location, job duties, working hours, and other terms and conditions of employment.

Discussion

Effective January 1, 2026, in accordance with 2025 amendments to Paid Leave Oregon (PLO), the Oregon Employment Department (OED) issued revised regulations regarding the PLO program’s job protection benefits. The Bureau of Labor and Industry (BOLI) is now responsible for enforcing the job protection, antidiscrimination, and antiretaliation provisions of the law.

 

Job protection is required for employees on PLO leave who have been employed for at least 90 consecutive calendar days. Upon return from leave, employees must be returned to their former position with the same rate of pay, benefits, location, job duties, working hours, and other terms and conditions of employment. This includes situations where a worker was hired or reassigned to temporarily work the same position as the employee on leave.

 

Employees are not entitled to return to their former position if the employee would have been terminated or reassigned if leave had not been taken. Job protection also does not apply where an employee provides clear notice of their intent not to return to work. If a position is eliminated, large employers with 25 or more employees must provide an available, equivalent position within a 50-mile radius of the former job site. Employers with less than 25 employees can use their discretion to restore the employee to a similar position based on business necessity. The job protection and reinstatement requirements are quite expansive, so employers should consult with legal counsel if they are not able to comply upon an employee’s return from leave.

 

Action Items

  1. Review and update leave of absence policies.
  2. Consult with legal counsel regarding specific job restorations situations.
  3. Have appropriate personnel trained on employee leave administration requirements.

 

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2026 ManagEase

Pennsylvania

/in

Discussion

Chester County, PA: New Human Relations Ordinance

Effective December 23, 2025, Chester County, Pennsylvania Ordinance 2025-03 implemented anti-discrimination protections applicable to employers with four or more employees. The Ordinance prohibits discrimination against any employee or independent contractor based on any protected class, including limiting inquiries about protected characteristics in the application and employment contexts. “Protected class” refers to an individual’s “actual or perceived race, color, religion, national origin or citizenship status, ancestry, sex (including pregnancy, childbirth, and related medical conditions), gender identity, gender expression, sexual orientation, marital status, familial status, physical or mental disability, source of income, age, veteran status, use of guide or support animals and/or mechanical aids, or domestic or sexual violence victim status.”

 

The Ordinance also prohibits employers from asking on an employment application or until after an initial interview whether the applicant has ever been convicted of a crime, unless otherwise required by law. An employer may include in its job requirements that an applicant have a clean driving record or be able to pass a child abuse clearance check. Background screenings also may not take place until after an initial interview and must be narrowly tailored to the job sought and what is otherwise required by law. An employer also cannot ask a job applicant what their salary is or was from any current or previous employment. Finally, a Human Relations Commission was established to receive and investigate employment complaints. In light of this major legal overhaul in Chester County, employers should review and update their policies and procedures for compliance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2026 ManagEase

Texas

/in

Texas: Attorney General Issues Opinion Letter on DEI Practices

APPLIES TO

All Employers with Employees in TX

EFFECTIVE

JAN 19, 2026

QUESTIONS?

Contact HR On-Call

(888) 378-2456
Quick Look

  • Texas’ Attorney General issued an Opinion Letter signaling a sweeping scrutiny of DEI practices, specifically warning that any use of race, sex, or other protected traits in employment decisions may be unlawful.
  • While not legally binding, the Opinion Letter makes a strong statement of enforcement, and may influence investigative and litigation strategies across Texas.

Discussion

Texas Attorney General (AG) Ken Paxton has issued a sweeping 74-page Opinion Letter challenging state-level Diversity, Equity, and Inclusion (DEI) initiatives. Specifically, the Opinion Letter asserts that many common DEI policies and practices are unconstitutional and may violate federal and state anti-discrimination laws when implemented by public entities or private employers.

 

Of particular importance to employers, the Opinion Letter criticizes DEI initiatives incorporating race, sex, ethnicity, or similar characteristics into hiring, advancement, compensation, contracting, or training decisions, opining that these actions may function as “unlawful preferences.” In the AG’s view, these programs not only mirror affirmative action frameworks struck down by the U.S. Supreme Court in 2023 but also create legal exposure under federal statutes like Title VII, Section 1981, and the Texas Commission on Human Rights Act (TCHRA).

 

The Opinion Letter specifically warns private employers that hiring goals, demographic benchmarks, or requirements for diverse candidate pools or interview panels may constitute unlawful reliance on protected traits. The AG goes on to scrutinize compensation systems and performance goals, noting that tying bonuses or executive evaluations to DEI metrics may constitute unlawful decision-making if demographic outcomes influence pay or advancement. The AG also identifies identity-based Employee Resource Groups (ERGs), mentorship programs, and leadership pipelines as “high-risk” structures if participation or access is limited by a protected trait. Beyond internal employment decisions, the Opinion Letter also calls out supplier diversity programs, indicating these practices may violate Section 1981 if vendor preferences are tied to race or sex.

 

Although the Opinion Letter is not legally binding on courts, it constitutes a strong statement of enforcement priority by the AG and is expected to influence investigative and litigation strategies across the state of Texas. Overall, the Opinion Letter suggests that DEI-driven frameworks across hiring, compensation, training, and contracting could invite heightened scrutiny. Employers are encouraged to discuss their DEI-based initiatives with legal counsel.

Action Items

  1. Consult with legal counsel regarding specific DEI initiatives.
  2. Have appropriate personnel trained on employer policies and consistent enforcement.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2026 ManagEase

Washington

/in

Discussion

Washington: ESD Publishes New PFML Template Notices

As of January 1, 2026, HB 1213 expanded worker protections under Washington’s Paid Family and Medical Leave program and introduced new administrative requirements for employers. Among these changes, HB 1213 added new employer notice obligations, and the Washington Employment Security Department (ESD) has now published template notices that employers may use to satisfy these requirements. First, if an employee’s leave exceeds two full workweeks of continuous leave (or 14 days of combined intermittent leave), employers must provide at least five business days’ written notice of (1) the employee’s first scheduled workday back, and (2) the estimated expiration of the employee’s job-restoration period. The ESD has published a template Job Protection Rights notice that employers may use to meet these requirements. Second, employers subject to federal FMLA terms are now allowed, but not required, to apply employee time taken under FMLA towards current and future periods of allotted leave under the state’s PFML program.  In order to do this, employers will need to provide employees requesting leave with written notice (1) within five business days of the employee’s request for leave, and (2) on a monthly basis thereafter. The ESD has similarly published a template FMLA Impact on Paid Leave Job Protection notice that employers can use to meet these requirements. Employers should note that these template notices may need to be tailored to meet the employe’s specific circumstances.

 

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2026 ManagEase

One Big Beautiful Bill: Penalty Relief for TY 2025

/in

APPLIES TO

All Employers

EFFECTIVE

As Indicated

QUESTIONS?

Contact HR On-Call

(888) 378-2456
Quick Look

  • The OBBB introduces new tax deductions for tips and overtime, but implementation remains complex and partially unresolved.
  • IRS Notice 2025-62 provides temporary penalty relief for TY 2025, giving employers time to prepare for new reporting requirements.

Discussion

Earlier this year, Congress enacted the One, Big, Beautiful Bill (OBBB), introducing two significant tax deductions designed to benefit workers in tipped and hourly occupations. Since its passage in July, the OBBB has generated considerable uncertainty, particularly around implementation and compliance. However, federal agencies have gradually begun to issue guidance clarifying key provisions. The following provides a brief overview of the developments to date and introduces the latest update from the IRS: Notice 2025-62, which offers temporary relief from certain reporting requirements.

 

OBBB Background

 

The OBBB introduced two new deductions: the “No Tax on Tips” and the “No Tax on Overtime” provisions. The tip deduction allows employees and self-employed individuals to deduct up to $25,000 in qualified tips received during the year, beginning with their 2025 tax return. In September, the Department of the Treasury and the IRS issued proposed regulations that define which occupations are eligible, specifically those that “customarily and regularly” received tips before 2025. The regulations also exclude individuals working in “specified service trades or businesses,” such as law, accounting, consulting, and financial services, even if they otherwise meet the occupational criteria. To support the deduction, tips must be reported on Forms W-2, 1099, or 4137, and employers or service recipients are required to file information returns with the IRS or SSA and furnish statements to employees showing the cash tips received and the occupation of the tip recipient.

 

The overtime deduction allows employees to deduct qualified overtime compensation starting in 2025. Unlike the tip deduction, the IRS has not yet issued proposed regulations for this provision, although Treasury officials have indicated that guidance is forthcoming. The deduction applies only to overtime as defined under the Fair Labor Standards Act (FLSA) (i.e., hours worked exceeding 40 per week), which will present challenges in states with differing definitions of overtime.

 

What’s New: IRS Notice 2025-62

 

To support implementation of the OBBB’s reporting requirements, the IRS issued Notice 2025-62 on November 5, 2025, providing temporary penalty relief for employers and other payors. As set forth in the Notice, and for tax year 2025, the IRS has indicated they will not impose penalties on those who fail to separately report cash tips or qualified overtime compensation, provided the remainder of the required tax forms are complete and accurate. This transitional relief acknowledges that many employers have not yet developed the systems or procedures necessary to capture and report the newly required information.

 

Although the relief applies only to 2025, the IRS encourages employers to voluntarily provide this information to employees to help them claim the new deductions. Employers may furnish the data through online portals, supplemental written statements, or, in the case of overtime, by using Box 14 of Form W-2. Full enforcement of the reporting requirements is expected in future tax years.

 

Because this area of compliance remains relatively uncertain, employers should closely monitor ongoing regulatory developments to stay on top of reporting obligations.

 

Action Items

  1. Evaluate internal systems and processes for employee tips and overtime tracking and reporting.
  2. Continue to monitor IRS and Treasury guidance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase