Health Savings Account (HSA) Limits Announced for 2025
Most dollar limits for employee benefits are announced in November before the new year starts, but HSA limits are required by statute to be announced earlier in the year.
Health savings accounts provide a tax-free method to save and pay for qualified medical expenses. HSAs can be set up by individuals on their own, or as part of a company-sponsored plan that can allow both employee and employer contributions. In order to qualify to make HSA contributions, an individual must be covered by a high-deductible health plan (HDHP) that satisfies minimum deductible requirements.
Here are the contribution and plan limits for calendar year 2025:
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| Individual Coverage | Family Coverage | Maximum Contribution | $4,300 | $8,550
| Out of Pocket Maximum | $8,300 | $16,600
| Minimum Deductible for HSA-Compatible HDHPs | $1,650 | $3,300
| Catch Up Contribution for age 55+ (unchanged) | $1,000 | $1,000
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Minimum Wage Increases Effective July 1, 2024
Last month, we sent you an alert that the US Department of Labor has announced a new salary threshold that determines whether an employee must be paid overtime (sometimes called the “exempt employee threshold”). Effective July 1, 2024, the salary threshold will increase to $43,888 per year, which equates to $844 per week, $1,688 for bi-weekly pay, and $1,828.67 for semi-monthly pay periods. For more information, see our announcement by clicking here.
Below are the states and local jurisdictions that have minimum wage increases effective July 1, 2024. We will include any subsequent minimum wage announcements as a follow up in our June newsletter.
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The West Hollywood city council voted on April 15, 2024 to retain the current minimum wage rate at $19.08 through December 31, 2024. They have also directed staff to return with an update to postpone the next increase to January 1, 2025 and then increase every January thereafter.
In addition, Johnson County, Iowa has set a recommended minimum wage at $10.75 beginning July 1, 2024, but this is unenforceable under Iowa state law and is only a recommendation. Employers are under no legal obligation to pay employees more than the state’s minimum wage rate of $7.25 per hour.
Don’t Forget About EEO-1 Data Collection Due June 4
Employers with 100 or more employees and federal contractors with 50 or more employees are required to file an EEO-1 Report for 2023 with the Equal Employment Opportunity Commission (EEOC). We are in the process of assisting our Mize payroll clients with this effort, but if you have questions, please contact your Mize payroll processor. Click here for the EEO-1 Data Collection website.
Encourage Employees to Review Income Tax Withholding
The IRS suggests that employees should review their withholding at least one time each year. Now that the 2023 tax filing date of April 15 has passed, now is a great time for employees to check their withholding, especially if they had a large refund or had to pay taxes because their withholding wasn’t enough to cover their liability. Employees are especially at risk if they fall into these categories:
· Two income families
· Employees who work only part of the year
· Eligible for credits such as the child tax credit
· Those with dependents who are age 17+
· Those who itemized in the past
· Those with non payroll sources of income
Employees can use the IRS Tax Withholding Estimator to ensure they’re having accurate amounts withheld from their paychecks.
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Illinois
Employers in Chicago will need to comply with updated requirements for the City’s Paid Leave and Paid Sick and Safe Leave programs which will go into effect July 1, 2024. Covered employees are those who work at least 80 hours within a 120-day period within the geographical boundaries of Chicago.
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Employers should maintain separate accruals and balances for each program. | |
| Paid Leave | Sick Leave | Accrual Rate | Employees earn 1 hour of paid leave for every 35 hours worked, up to 40 hours in a 12-month period | Employees earn 1 hour of sick leave for every 35 hours worked, up to 40 hours in a 12-month period | Purpose | Paid leave may be used for any reason, but the Employer may deny the request. | Can be used to recover from illness, take care of a family member, address domestic violence, and public health emergencies. | Availability | Employee can request to use 90 days after July 1, 2024 or after start of employment, whichever is later | Employee can use 30 days after July 1, 2024 or after start of employment, whichever is later | Highest Minimum Usage Increment | 4 hours | 2 hours | Carryover | Up to 16 hours/2 days; no carryover is required if Paid Leave is frontloaded | Up to 80 hours/10 days | Payout | Required for large employers (101+ EEs)
2 days (16 hours) for medium employers (51-101 EEs) until July 1, 2025, required past this date
Not required for small employers (1-50 EEs) | Not required | | |
You can view a webinar covering these new requirements by clicking here and a one page overview by clicking here. | |
Kansas
Earned Wage Access (EWA) providers in Kansas must register with the state’s bank commissioner and be bonded. Vendors already doing business in Kansas as of January 1, 2024 may continue to do so but must apply for registration within 3 months after the form becomes available.
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Minnesota
Since the state’s paid sick leave law is more beneficial, the city of Duluth has repealed its paid sick leave ordinance.
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New Mexico
New Mexico’s state-mandated retirement program, called New Mexico Saves, is set to launch effective July 1, 2024. A website for the new program has not yet been established, so we will keep you updated as more information becomes available. Here’s what we know so far:
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Employers:
- This new program is for all private-sector and nonprofit employers with a physical primary place of business in New Mexico, regardless of size.
- The program is intended for employers who do not offer their own retirement savings program.
- Employee contributions will be made to a Roth IRA account. Employer contributions to the account are not allowed.
- The plan includes auto-enrollment and auto-escalation features.
Employees:
- Employees must be at least 18 years old.
- Employees may opt-out of the program.
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New York
Effective January 1, 2025, New York employers will be required to provide 20 hours of paid prenatal personal leave during any 52-week calendar period. This leave is in addition to any regular paid sick leave already required by law. For more information about this and the state’s paid leave policy, click here.
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Oregon
Child Labor
Civil penalties for child labor violations will increase effective June 6, 2024 up to a maximum $10,000 per violation.
Garnishments
Effective January 1, 2025, the maximum amount that can be garnished from an employee’s check is 25% of disposable earnings or the amount by which weekly disposable earnings exceed $305 (currently $254). These amounts are set to incrementally increase every 6 months.
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Withholding for Eugene
Due to the upcoming minimum wage increase for Eugene, withholding charts will be changing for the Community Safety Payroll Tax. The new charts will be effective from July 1, 2024 through June 30, 2025. The rates remain the same, but the wage ranges have changed. These updates will be made in the Mize payroll system and require no action on the part of employers.
- The new rates apply to all taxable wages.
- On an annual basis, there is an exemption for wages less than $30,597.00.
- Wage of $30,597.00 but less than $31,221.00 are taxed at a rate of 0.0030.
- Wages greater than $31,221.00 are taxed at a rate of 0.0044.
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Virginia
Effective July 1, 2024, child labor violations will increase from $1,000 per instance to a maximum of $2,500. If the employment of a minor results in serious injury or the death of the minor, the penalty will increase to $25,000 from the current $10,000 per violation.
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When it comes to Mize Payroll 2.0, Ann knows it all! Check out her latest 2.0 tips:
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Electronic Pay Solutions
Employees like to get paid on time. Sometimes that’s harder than it might seem. With delivery issues, severe weather, and wildfires frequently in the news and maybe even your back yard, getting paychecks to employees can be difficult. That’s where electronic payroll solutions like direct deposit and pay cards can be a great solution.
Electronic pay solutions can also save you money. The costs of both printing and delivery are going up, which increases your payroll fees. With direct deposit and pay cards, employees can access their pay stubs and year-end Forms W-2 and 1095 online through the Mize payroll portal.
Read more about the benefits of electronic pay from our Insights blog by clicking here.
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Earned Wage Access
Even if employees get paid on time, sometimes that money doesn’t stretch until the next payday. Stuff happens – the washing machine overflows, the car breaks down, or somebody gets sick. Sometimes employees need money sooner than later, but there aren’t a lot of great options. Payday loans, overdrawing their checking account, and incurring credit card debt can chock up high fees. The employer can give a pay advance or loan, but that can put you in a difficult position.
That’s where an Earned Wage Access (EWA) program can help. EWA programs are a new employee benefit that advances employees a certain amount or percentage of their accrued wages. The employee’s next paycheck is automatically reduced by the advanced amount, with no risk or liability to the employer.
For more information about ZayZoon, the EWA program offered through Mize CPAs, click here or visit with your Mize professional.
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