Each month, Optimum HR gathers the latest updates and changes to federal and state employment law. Read on to learn how these changes may affect you, and how Optimum can help you ensure compliance.
Federal Updates
2027 HSA Limits
The IRS has announced updated HSA & HDHP contribution and deductible limits for 2027. These new limits will allow an increased HSA contribution for employees enrolled in a High-Deductible Health Plan.
One Big Beautiful Bill Payroll Entry Reminder
As a reminder, due to recently enacted federal legislation, the One Big Beautiful Bill Act (OBBBA), employers will be required to report overtime on employees’ 2026 Form W-2 based on weekly overtime hours calculated in accordance with the Fair Labor Standards Act (FLSA). In order to report FLSA overtime (40+ hours in a week), hours worked must be accurately tracked by workweek instead of only by pay period.
If you do not use our time clock, pay your hourly employees less frequently than weekly, and pay those employees overtime, you must report all hours in a weekly format on payroll. This is required to ensure accurate overtime calculations and proper year-end reporting compliance.
Additional instructions are attached HERE. Please refer to step 7, Payroll Entry.
To support compliance and reduce administrative burdens, we offer time clock solutions that track hours by workweek and calculate overtime in accordance with FLSA rules.
State Updates
Minimum Wage Updates
Several states and localities’ minimum wage rate increases on July 1, 2026. Please review the July Minimum Wage Chart for impacted locations. Our Optimum HR Professionals have reached out directly to any clients impacted with actions needed.
