There’s growing anxiety that the U.S. economy is heading into a recession. While a recession impacts organizations of all sizes, small businesses often have limited resources and face a unique set of challenges. As a result, small businesses often must make difficult financial decisions to avoid issues such as insolvency or bankruptcy when a recession hits. That’s why it’s critical for small businesses to now consider how best to prepare for a potential recession.

Tips to help prepare for and minimize the impact of a recession:

1. Re-evaluate compensation strategies
2. Prioritize employee retention
3. Assess organizational talent
4. Establish communication channels
5. Automate internal processes

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4 HR Trends for 2023: Just as teams quickly adapted to changes at the height of the pandemic, they must now adapt and respond to today’s evolving expectations of organizations and employees. Savvy leaders and HR professionals will approach this year with human-centric strategies that holistically support and benefit workers. The trends include increased wages and raises, pay transparency, and several hot topics. Check out our infographic on 4 HR Trends in 2023.

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California – California Employment Laws Effective Jan. 1, 2023. In general, once approved by both the state legislature and the state governor, a new bill in California becomes effective on Jan. 1 of the following year (some exceptions are possible for emergency measures and when the bills specifically appoint a different effective date). The Compliance Bulletin provides an overview of California labor and employment laws that become effective on Jan. 1, 2023. Click here to read the California HR Compliance Bulletin.

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On Dec. 29, 2022, the IRS announced the 2023 optional standard mileage rates, which are used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes. The 2023 standard mileage rates for the use of a car (also vans, pickups, or panel trucks) will be:

• 65.5 cents per mile driven for business use, up three cents from the midyear rate for the second half of 2022;
• 22 cents per mile driven for medical purposes or for moving purposes for qualified active duty members of the Armed Forces, unchanged  from the midyear rate for the second half of 2022; and
• 14 cents per mile driven in service of charitable organizations. The rate is set by statute and remains unchanged from 2022.

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On Dec. 29, 2022, President Biden signed the Consolidated Appropriations Act of 2023, an omnibus bill that includes the “SECURE 2.0” legislation. It is referred to as such because it builds on the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019.

Key SECURE 2.0 provisions include:

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On Dec. 12, 2022, the IRS released a final rule that extends the annual furnishing deadlines for Sections 6055 and 6056 reporting under the Affordable Care Act (ACA). This rule finalizes guidance that was proposed by the IRS in December 2021 with minor clarifications. Specifically, the rule:

• Finalizes the 30-day automatic extension to the due date for furnishing statements to individuals under Sections 6055 and 6056.
• Confirms the availability of an alternate method for furnishing statements to individuals under Section 6055 for every year in which the individual mandate penalty is zero.

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An HR compliance calendar is a valuable tool to help your business stay on track with key employment-related deadlines throughout the year. HR compliance is a complex area with many moving parts. Keeping track of HR deadlines during 2023 can help your business stay organized and avoid the penalties or workplace disruption that may be triggered by noncompliance.

There are a number of HR compliance tasks with predictable deadlines that you can anticipate from year to year, such as providing your employees with Form W-2 and filing Form 5500 for your employee benefit plans. Other deadlines can be unpredictable or triggered by certain events, such as when you hire a new employee or when an employee gets injured at work. Knowing what your business is required to do and when is the best way to stay compliant.

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We recently released our latest Attraction and Retention Newsletter for the first quarter of 2023. In this edition, we cover:

1. Market Recap – Employee Quits and Job Openings Trend Down While Employers Prepare for Economic Uncertainty

2. Securing Talent – Identifying and Retaining Key Employees (Including the Quick Quitting Trend)

3. Workplace Outlook – Summary of the Bureau of Labor Statistics (BLS) Data

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Check out our PDF chart below for a list of states that have upcoming minimum wage increases in 2023 (click either image for the full report):

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Many benefit plan limits have changed for the new calendar year. Here are some limits to review for 2023:

401(k) Limits

• Pre-tax contributions: $22,500 (up $2,000 from 2022)
• Catch-up contributions: $7,500 (up $1,000 from 2022)

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