Compliance Corner

last updated: June 3, 2026

IRS 2027 HSA and HDHP limits

Health savings account (HSA) and high-deductible health plan (HDHP) limits have been released for 2027.
Click here to review figures and brush up on the rules around HSAs.

The Illinois Department of Employment Security (IDES) has updated how wages are calculated. Effective with payrolls dates July 1, 2026, and after, employer contributions to 401(k) plans (such as employer match amounts) will no longer be included when determining Illinois taxable wages for unemployment.
This means that taxable wages for unemployment may be lower due to the exclusion of employer 401(k) contributions.
This change impacts reporting calculations only and does not affect employee gross wages or benefit elections
No action is required by B2E clients. UKG Ready will account for these changes prior to July.
Please review the Illinois Administrative Code for more information.
Contact IDES at 800-247-4984 with questions.

UKG Ready has been updated to support OBBBA changes to tips and overtime reporting. If you see a system pop-up during payroll processing indicating that an employee's Treasury Tipped Occupation Code (TTOC) is missing from their record, please refer to the client email, "UKG Ready Update - Tip Reporting Requirement" sent on May 18, 2026, or ask your Client Service Rep (CSR) to reshare the instructions on how to assign a TTOC in UKG Ready.

A recent proposal to eliminate or scale back EEO reporting requirements is under review.
Employers should continue complying with all current EEO reporting obligations until official guidance states otherwise.
Helpful resources for more information: Our EEO-1 blog and JDSupra's EEO reporting article

Since 1996, U.S. Immigration and Customs Enforcement (ICE) has divided Form I-9 violations into two categories:
- "Substantive" violations that could lead an employer to hire an unauthorized worker; and
- "Technical or procedural" violations for easily correctable administrative or clerical mistakes.
Recent ICE policy revisions now reclassify many administrative I-9 errors, such as missing dates, as "substantive," putting employers at greater risk of immediate penalty.
More information: https://www.ice.gov/factsheets/i9-inspection

Beginning July 1, 2026, eligible students may use Pell Grants to enroll in approved short-term workforce training programs that prepare individuals for high-skill, high-wage and in-demand occupations.
Eligible programs may be as short as 8 weeks and must meet federal and state workforce eligibility and performance requirements.
Previously, Pell Grants were generally limited to undergraduate degree and longer-term certificate programs offered through eligible higher education institutions.
A copy of the regulations is posted on the Federal Register.

Several states, including Illinois, Missouri and New York, have introduced proposed legislation related to pet leave.
Proposed measures include:
- Caring for a sick pet
- Grieving the loss of a pet
- "Pawternity" leave for a new pet
No statewide pet leave laws have been enacted at this time.
Even without legal requirements, some employers are beginning to address pet-related leave through internal policies and benefits.

The California Pay Data Reporting was updated in UKG Ready with the new instructions for 2025 report filing that was due May 13, 2026.
If you missed the deadline, you should report your pay data report to the state as soon as possible to prevent further escalation or penalties.
For more information, visit the State of California website.
For information on federal pay data reporting requirements for the EEO-1, visit our blog.

Trump accounts are a tax-advantaged savings account for children.
All US children under 18 with a valid Social Security number are eligible.
The federal government will make a one-time $1,000 pilot program contribution to each eligible child.
There is a $5,000 annual limit. Employees can contribute through payroll deduction if they choose. If an employer offers Section 125 cafeteria plan, the contributions are pre-tax. Employers can contribute up to $2,500 of the annual limit, which does not count toward the employee's taxable income.
Resources for more information:

High-Wage Earner Roth Catch-Up
- Employees (especially those age 50+) may begin asking about catch-up contributions and how they are taxed or applied to their retirement deductions. We’ve created a one-page overview outlining how catch-up contributions are handled in UKG Ready, what we're updating and whether any action is needed. Click here for the one-pager.

1099 limit for 2026
- OBBBA increased the 1099 reporting threshold from $600 to $2,000 for certain information returns and backup withholding. This change applies to tax years beginning after 2025, with the $2,000 threshold set to be adjusted for inflation starting in calendar year 2027. To learn more about how this change may affect your reporting obligations, we encourage you to review the IRS draft Publication 1099 here.