04:05 AMERICAS
Earned Wage Access Proposal Also Stalled One significant payroll-related proposal, now paused, is from the CFPB and could have affected the way earned wage access (EWA) providers in the U.S. do business. The proposed interpretive rule, announced in July 2024 , sought to designate as loans many common programs that allow workers to access some or all of their already-earned pay before a scheduled payday. EWA providers have maintained that, since amounts paid out before a scheduled payday already are earned, the early payments made under these voluntary programs are not credit. The CFPB under the Biden Administration declared their intended policy was different; that such a program primarily had to follow loan- type procedures covered by the Truth in Lending Act in order to be compliant, which supporters of EWA say would make the process for employees much more cumbersome and time- consuming. Some EWA providers also would be hindered in their ability to provide timely and cost-effective services under this interpretation. However, this initiative will get a full review
by the incoming administration and possibly could change, as guidance during the first Trump term on EWA leaned toward not classifying the arrangement as a loan. Guidance on Retirement Plan Changes Several proposed Treasury rules issued late in the Biden Administration to assist taxpayers in implementing the Secure 2.0 legislation that changed the administration of qualified retirement plans are now on hold. While the law and other Treasury guidance from the Internal Revenue Service regarding how employers are to include changes in their qualified plans are generally in place, IRS continues to define how automatic enrollment and newly enhanced catch-up contribution requirements are to be administered. The Secure 2.0 law, as it stands, is not likely to face challenges by the new administration, according to Pete Isberg, the former ADP (US) vice president for Government Relations said during the LinkedIn Live program. He noted there has been bipartisan support for the effort to adjust the tax character of retirement plan deferrals.
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GLOBAL PAYROLL MAGAZINE ISSUE 9
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