The Employee Benefits Landscape—Recent Trends
As the needs and expectations of working Americans change, so have the benefits employers offer to attract and retain top talent. After an especially tumultuous 2020, Ayco’s Jon Barber shared his expertise on why the intersection between income tax, compensation and employee benefits needs to be top of mind for HR leaders looking to stay ahead of the curve and what they can expect in the future.
Highlights
- With the shift to a remote work model brought on by the pandemic, the most significant changes have been at the state level. That’s because so many employees who technically work in one state live in another state, and work from that location. It’s been such an important issue that Ayco’s Tax Policy and Research group (TP&R) created a subgroup to ensure clients are complying with new and existing remote-work tax codes.
- Even having one employee in a certain jurisdiction could open the entire company up to different taxes that are due, as well as different regulations related to disability or paid leave, among other things.
- A year after the “new,” more complicated W-4 form was released in December 2019, only 25% of employees had looked at it, which will likely add to confusion when it comes to withholding taxes, tax credits and double taxation, so there’s a need to educate employees on this.
- The Biden administration has enhanced the IRS’ budget, enabling it to ensure more people are compliant with its codes. This means the possibility of more audits around 409A enforcements related to severance agreements (short-term deferral exceptions and separate payments, garden leave, etc.), consulting arrangements, restricted stock unit retirement vesting and private company stock options.