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After highly contentious debate in the House and Senate in the last few weeks, Congress recently passed—and President Trump signed into law—the so-called “Big, Beautiful Bill.” The federal spending plan was championed by Republicans, who supported the extension of tax cuts and broader defense spending, while Democrats sharply criticized the funding of such increases by slashing Medicaid and other programs.
Given the broad nature of the measure, it will, unsurprisingly, impact employers in a range of ways, experts say, perhaps most visibly related to new tax regulations on overtime and tips.
A sea change for overtime management?
According to Nisha Verma, a labor and employment litigation partner at Dorsey, a key tax change for overtime and tip payments will likely drive some new employer trends.
According to the White House, under the new law, workers will now be able to deduct on their taxes amounts paid to them as tips and/or overtime. With some caveats, workers can deduct up to $25,000 in tips and $12,500 in overtime pay.
Nisha Verma, Dorsey
That alone, Verma says, could produce “interesting side effects” within the employment landscape, including a much sharper focus on overtime management. Employees will likely feel incentivized to seek more
