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Regulatory Issues Worth Watching in 2023 (Conclusion)

Potential legislation could impact worker classification, pay, time off

ROCHESTER, N.Y. — Paychex Inc., which provides software solutions for human resources, payroll, benefits, and insurance services, has released a list of the regulatory issues that employers should monitor in 2023.

The company’s annual list outlines the most prominent compliance-related topics employers will need to contend with this year and explores the legislative and regulatory context surrounding these issues.

Funding and tax credit eligibility rose to the top of the 2023 list, as business leaders manage the economic impacts of inflation and turn to programs like the Employee Retention Tax Credit and the Inflation Reduction Act. Businesses should also prepare for potential legislation and regulations that could impact how to classify workers, pay workers, and provide time off for their workers.

Paychex’s compliance professionals have identified several topics as key considerations for employers in 2023, continuing with:


Building on the framework of the SECURE Act of 2019, SECURE 2.0 [formally the Consolidated Appropriations Act of 2023, HR 2617] has a handful of key provisions, including an expansion of eligibility for the tax credit when a business establishes a workplace retirement plan, an increase in the RMD age, mandated automatic enrollment for certain retirement plans, even student loan payment matching that aims to counter two crises—student loan debt and retirement savings—at the same time.


Based on listening sessions held in mid-2022, it’s anticipated that the Department of Labor (DOL) will release proposed changes to the federal overtime regulations. The changes would reflect the current labor market, including an increase in the salary threshold for exempt workers. Additional regulations at the state and local level are anticipated in areas including fair scheduling ordinances, and the elimination of sub-minimum wage rates and tip credits in certain jurisdictions.

An increase in industry-specific requirements, particularly in the hospitality, retail and healthcare sectors, may be on the horizon following efforts like the California FAST Recovery Act which, although potentially subject to voter approval in 2024, proposes to create a council with the authority to set wage and hour standards for fast food workers.


While a federal paid leave program does not appear to be on the horizon for 2023, several states across the country considered legislation in 2022 to provide employees with paid time off to care for themselves and covered family members.

Maryland and Delaware are the latest states to pass mandated paid family leave legislation, joining nine other states and the District of Columbia. 2023 has seen the start of the first opt-in, voluntary paid family leave insurance program, available to employers or directly to employees, with legislation passed in New Hampshire.


With the growth and continued norm of a hybrid and remote workforce, businesses must adapt privacy policies and cyber security practices in a manner that effectively balances the needs of the business, against both employee and customer expectations with respect to the privacy of personal information.

Businesses must be clear and transparent about the collection, use, storage, and retention of data. In the absence of a federal privacy law, states continue to broaden the scope of their data protection laws.

Beyond these regulatory issues identified by Paychex, other areas of interest for businesses to consider include tax changes, hybrid and remote work, and healthcare reform.

Miss Part 1? You can read it HERE

Regulatory Issues Worth Watching in 2023

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Have a question or comment? E-mail our editor Bruce Beggs at [email protected].