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State of Compliance for August 2022: Student Loan Forgiveness, Revised IRS Guidance and More

Please note the list below is not intended to be comprehensive. Our team is constantly monitoring for updates that may impact organizations across the country.

In this edition of State of Compliance, your monthly guide to the world of employment legislation, we look at changes at the federal level and in two states.

This month’s updates include federal student loan forgiveness, a nationwide law aimed at inflation and minimum wage adjustments in Colorado and Minnesota.

Federal HR Compliance Updates

On Aug. 24, the U.S. Department of Education announced a final extension for the federal student loan collection pause to Jan. 1, 2023. Certain borrowers may also apply to cancel up to $20,000 of their loans.

The recently signed Inflation Reduction Act will impose a 15% minimum tax on applicable corporations beginning 2023. The law also creates new tax credits for certain environmental practices and small business research and development. Qualifying small businesses may also apply the credits against payroll taxes.

On July 25, the IRS announced the 2023 Pay Safe Harbor rate for household income. Also known as the “affordability threshold,” the rate is one of three metrics used to calculate Affordable Care Act affordability. Starting next year, the rate will drop from 9.61% of an employee’s household income to 9.12%.

Remember, this applies to plan years, not calendar years. Non-calendar year plans will still use 2022’s rate until the new plan year starts later in 2023.

Colorado

Beginning Jan. 1, 2023, Denver’s minimum hourly wage will rise to $17.29 — $14.27 for tipped employees who earn at least $3.02 in actual tips. This increase places Denver among dozens of cities nationwide with minimum wages over $17.

Minnesota

Beginning Jan. 1, 2023, Minnesota’s minimum hourly wages will rise to $10.59 for businesses that earn more than $500,000 a year to account for inflation. The minimum wage increases to $8.63 for all other organizations, training and youth wages.

DISCLAIMER: The information provided herein does not constitute the provision of legal advice, tax advice, accounting services or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional legal, tax, accounting or other professional advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation and for your particular state(s) of operation.