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Don’t Forget Your 2025 FSA Funds — You May Still Be Able to Use Them!

As we begin 2026, we want to remind everyone who participated in a 2025 Flexible Spending Account (FSA) or Dependent Care FSA that you may still have time to use any remaining funds from last year.

Depending on your plan’s rules, unspent 2025 FSA funds may still be available through a Grace Period or Carryover.

We encourage you to:

  • Check your current FSA balance
  • Review eligible expenses
  • Submit claims promptly to avoid forfeiting unused funds

A quick check of your account now can help you avoid losing unused dollars.

Deadlines, Reminders and TO-DOs

  • W-2s and 1099-NEC must be distributed to Employees and Independent Contractors by January 31st.
  • Watch for notices of rate changes in your state unemployment taxes. Any changes in these rates need to be updated with your payroll administrator for proper tax filings.
  • Remind employees to check their beneficiary designations for life insurance and 401k to make sure they are up do date.
  • ACA Reporting Deadlines for Forms 1094-C, 1095-C (employers) and 1094-B, 1095-B (insurers/self-insured plans):
  • Distribute to Employees / Covered Individuals:
    • Form 1095-B / 1095-C (recipient copies): due March 2, 2026 (or the next business day if March 2 falls on a weekend/holiday).
  • File With the IRS:
    • Paper filing: by March 2, 2026 (for those eligible to paper file.
    • Electronic filing: by March 31, 2026 (required if filing 10 or more returns).

Need help staying on track? Contact [email protected].

Welcome to 2026: A Year of Big Shifts in HR & Workplace Compliance

Happy New Year! As businesses across New England and beyond gear up for 2026, we are entering one of the most significant seasons of regulatory change in recent years. From wage increases and paid leave expansions to new artificial intelligence guardrails and evolving employee relations dynamics, HR leaders must start the year informed and prepared.

Below is your comprehensive guide to the most important updates taking effect this January, as well as what you can do to stay ahead.

Minimum Wage Changes in New England and Several Other States

  • Connecticut’s minimum wage will rise from $16.35 to $16.94, making it one of the highest in the country.
  • Maine’s state minimum wage increases to $15.10/hour (now covering agricultural workers as well).
  • Rhode Island’s rate will be $16.00/hour and Vermont’s $14.42/hour in 2026, while Massachusetts remains at $15.00/hour.
  • New Hampshire still follows the federal floor ($7.25/hour) with no hike scheduled.

New Employment Laws Taking Effect January 1, 2026

  • States nationwide are rolling out minimum wage adjustments, new paid leave programs, AI guardrails, and expanded worker protections.
  • Employers should review all state-level changes to update handbooks, payroll systems, and leave policies before January

Pay Transparency Requirements

  • Massachusetts’ pay transparency law took effect October 29, 2025, requiring employers with 25+ employees to include salary ranges in job postings and provide them to applicants or current employees upon request.
  • This aligns with broader trends in states expanding salary range disclosures and prohibiting wage-history inquiries.

Paid Leave & Policy Expansion

  • Paid sick leave and family leave requirements continue to expand into 2026
  • Employers must ensure:
    • Leave policies are current
    • Handbook language is consistent
    • Managers understand eligibility and administration rules

AI, Data Privacy & Arbitration Updates

  • New rules increase oversight of AI tools used in hiring, performance, and termination decisions
  • Arbitration agreements must include:
    • Clear language
    • Confirmed employee consent
    • Transparent procedures and cost terms
  • States are strengthening data privacy requirements for employee records

January Action Items for Employers

  • Review minimum wage rates and compensation structures
  • Audit job postings for pay transparency compliance
  • Update handbooks, arbitration agreements, and leave policies
  • Train managers on 2026 employee relations and compliance risks

January is one of the busiest months for HR compliance and strategic planning. If you would like help reviewing your handbook, completing a compensation analysis, updating job descriptions, or preparing for new 2026 legal requirements, HR Synergy is ready.

Let’s make 2026 your most compliant and productive year yet!

SECURE 2.0: What Plan Sponsors Need to Know About Upcoming Roth Catch-Up Rules

We want to inform you about an important change to retirement plan catch-up contributions that will take effect on January 1, 2026, as part of the SECURE 2.0 Act.

What’s Changing?

Beginning in 2026, participants that are age 50 or older and earned more than $145,000 in FICA wages in the previous calendar year will be required to make any catch-up contributions as Roth (after-tax) contributions. This rule applies to all 401(k), 403(b), and governmental 457(b) plans.

Key Details:

  • FICA wages include salary, tips, bonuses, commissions, and taxable fringe benefits (Box 3 on your W-2).
  • The $145,000 threshold is indexed annually for inflation.
  • If your plan does not offer Roth contributions, plan participants will not be able/eligible to make catch-up contributions if they exceed the wage threshold.
  • New limits for ages 60–63: Starting in 2025, participants in this age group may contribute an additional $3,750 super catch up contribution (indexed), which must also be Roth if the wage threshold is met.

What You Need to Do:

  • Ensure your plan offers a Roth contribution option.
  • Coordinate with payroll providers and the plan’s record keeper to identify impacted participants and adjust contribution processing.
  • Review your employees’ 2025 earnings to determine which participants may be impacted.
  • Check your plan’s salary deferral election options and help any impacted participants update their elections if necessary.
  • Have participants contact the plan’s financial professional to understand how Roth contributions may affect their retirement strategy.
  • Educate employees about the upcoming changes and provide support for updating elections.

Changes for Long-Term Part-Time Participants:

  • Effective January 1, 2025, LTPT employees must have worked at least 500 hours in each of two consecutive 12-month periods.
  • Employees must be 21 years of age or older.
  • Service prior to January 1, 2021 (for 401(k) plans) and January 1, 2023 (for 403(b) plans) is excluded from eligibility and vesting calculations.
  • These changes are designed to expand retirement savings opportunities for part-time workers who have demonstrated long-term commitment to their employers.

What LTPT Employees Are Eligible For:

  • Elective salary deferrals to the retirement plan.
  • Employer contributions (matching or non-elective) are optional and at the discretion of the plan sponsor.
  • Vesting begins once the employee satisfies the LTPT eligibility criteria, with one year of vesting credit for each year of 500+ hours of service.

Plan Sponsor Considerations:

  • Track hours accurately for part-time employees to determine eligibility.
  • Decide whether to include LTPT employees in employer contributions and nondiscrimination testing.

Reach out to us at [email protected] to learn more.

Using AI in the Workplace: Why Employers Need Clear Policies, Procedures & Training

AI can significantly boost productivity, but without strong guardrails, it can introduce security, compliance, and ethical risks. Employers need clear policies, employee training, and vetted platforms to ensure AI is used safely and effectively.

Policies, Procedures & Appropriate Use

  • Employers should establish a formal AI policy outlining approved tools, acceptable use, and consequences for misuse.
  • Amazon now requires some employees to demonstrate AI use to qualify for promotions, showing how quickly expectations around AI are evolving.
  • Policies should also explain when AI is appropriate (drafting communications, summarizing information, creating first drafts, etc.) and when it isn’t, such as making final hiring decisions or handling confidential or sensitive data.
  • With 42% of workers using AI secretly (“shadow AI”), unclear policies often push employees toward unmonitored usage.
  • Mandatory human review of all AI-generated content, especially for sensitive or business-critical areas should be implemented as part of these policies.

Training, Responsible Use & Data Restrictions

  • Employees must be trained on how AI works, where it’s reliable, its limitations, and potential accuracy or bias concerns.
  • The U.S. Department of Labor recommends training employees to ensure AI is deployed safely and equitably at work.
  • Accenture’s CEO reinforces that AI adoption must be paired with strong governance and ongoing employee training.
  • Policies should explicitly prohibit entering proprietary, personal, financial, or customer information into public AI tools unless approved.
  • Many organizations ban uploading confidential information into open AI platforms to prevent privacy or compliance risks.

Approved Platforms & Security Oversight

  • Employers should clearly define which AI tools are approved, and set a review process for requesting new platforms.
  • Best practices include choosing vendors that do not use company input data to train public models.
  • IT and cybersecurity teams must vet AI systems for data retention, privacy practices, and overall security before approval.
  • Real-world guidance emphasizes the need for regular audits and security reviews to ensure platforms remain compliant.

Moving Forward Responsibly

As AI becomes a standard workplace tool, responsible implementation is no longer optional, but strategic. Organizations that set clear expectations, provide effective training, and invest in secure, vetted AI systems will mitigate risk while empowering employees to work smarter and more efficiently. Thoughtful policies today lay the foundation for safe, ethical, and innovative use of AI tomorrow.

To learn more or get help developing a customized workplace AI policy, contact [email protected].

New Hampshire Employers: Prepare Now for New Unpaid Parental Leave Law

Beginning January 1, 2026, New Hampshire will require covered employers to offer unpaid parental leave for certain birth- and infant-related medical appointments.

What the Law Requires

  • Employers with 20 or more employees must allow eligible staff to take up to 25 hours of unpaid leave during the first year after a child’s birth or adoption.
  • This leave may be used for:
    • The employee’s own childbirth or postpartum medical care
    • Pediatric medical appointments for the child
  • If both parents work for the same employer, they must share the 25-hour entitlement (i.e. combined, not 25 hours each).

Eligibility, Notice & Documentation

  • The law applies to full-time and part-time employees, but not seasonal or temporary workers.
  • Employees must give reasonable advance notice and make efforts to minimize disruption.
  • Employers may request reasonable documentation (e.g. a medical note) to verify the leave.

Paid Time Substitution & Salaried Employees

  • Though the leave is unpaid, employees may opt to substitute accrued paid leave (vacation, sick, etc.) for part or all of it.
  • For salaried (exempt) employees, employers generally cannot deduct pay for missed days under leave laws, unless specifically allowed under statute.

Job Protection & Related Laws

  • Upon return, employees must be reinstated to their original (or equivalent) positions.
  • Employers should also keep in mind:
    • The nursing-mothers accommodation law effective July 1, 2025 (requires breaks and lactation space)
    • Existing maternity leave statutes
    • The state’s voluntary Paid Family & Medical Leave (NH PFML) program

Action Steps for Employers

  1. Review and update your leave policies to include the new entitlement by January 1, 2026.
  2. Train HR / management on notice, documentation, and reinstatement obligations.
  3. Ensure record keeping and tracking mechanisms for the 25-hour leave usage.
  4. Confirm alignment with other leave and lactation policies.

Stay ahead of the 2026 compliance deadline. Download our New Hampshire Parental Leave Compliance Checklist to make sure your policies, documentation, and HR procedures are ready before January 1, 2026.

Source: Duane Morris

2026 HR & Business Compliance: New England Edition

As 2025 winds down, employers across New England face a wave of new HR and compliance changes. From paid leave to pay transparency and wage increases, here is a quick Q&A guide to keep your team ready for 2026.

Building on our previous national overview, here’s what HR teams across New England need to know before January 1.

What’s the biggest HR change for New England in 2026?

Maine’s Paid Family and Medical Leave (PFML) program launches May 1, 2026, offering up to 12 weeks of paid leave for family or medical reasons. Payroll contributions started January 1, 2025, so setup should begin now.

✅ Checklist:

  • Register with Maine’s PFML portal and update payroll systems.
  • Add PFML details to your handbook and onboarding materials.
  • Post required state notices once released.

What’s New in Massachusetts?

Starting October 29, 2025, employers with 25+ employees must include pay ranges in all job postings. Those with 100+ employees must file annual pay data reports beginning in 2026.

✅ Checklist:

  • Audit job postings for salary range compliance.
  • Train hiring teams on disclosure requirements.
  • Conduct internal pay equity reviews.

What’s Changing in Connecticut and Other Nearby States?

Connecticut’s expanded Paid Sick Leave Law takes effect January 1, 2026, covering more employers and reasons for time off. Vermont has updated its family leave rules, and Rhode Island continues expanding Temporary Caregiver Insurance coverage.

✅ Checklist:

  • Update sick and family leave policies.
  • Ensure time-off tracking systems reflect multi-state rules.
  • Review remote work policies for cross-state employees.

Do We Need to Adjust Payroll for 2026?

Yes. All six New England states are raising minimum wages on January 1, 2026, and several are reviewing overtime eligibility thresholds.

✅ Checklist:

  • Verify new wage rates for each state.
  • Review exempt vs. nonexempt classifications.
  • Update pay statements and offer letters.

What Else Should HR Keep an Eye On?

Expect updates to mandatory workplace postings, emerging AI and hiring transparency laws, and growing data privacy requirements for employee information.

✅ Checklist:

  • Order new 2026 labor law posters.
  • Review vendor compliance with AI and privacy rules.
  • Schedule HR compliance training for Q1 2026.

Start 2026 with a clear compliance checklist, from handbook updates to pay transparency, leave laws, and payroll adjustments. Make sure your HR team is proactive, not reactive, in the new year.

Reach out to us at [email protected] to learn more.

Military-Related Work Leave Hits Highest Rates Since 2006: What Employers Should Know Under USERRA

Recent data from the U.S. Bureau of Labor Statistics show a sharp increase in military and civil service leave, with more than 90,000 instances of employees missing at least one week of work in the first eight months of 2025. That is nearly double last year’s figures and marks the highest rate of such leave since 2006. The uptick is largely driven by expanded deployments of National Guard personnel to cities like Washington, D.C., Los Angeles, and beyond.

Because of these trends, more employers will need to ensure compliance with the Uniformed Services Employment and Reemployment Rights Act (USERRA), a federal statute that imposes strict obligations on employers whenever employees serve in the uniformed services.

Key Obligations for Employers

  • No discrimination or retaliation: Employers may not deny employment, reemployment, promotions, or benefits because an employee serves in the military.
  • Leave protections and benefits continuity: Covered employees may take up to five years of military leave over their lifetime. During that time, employers must maintain their seniority, pension, and health care benefits as if the leave did not disrupt service.
  • Reemployment rights: Returning service members generally are entitled to return to the job they would have held had they not served (the “escalator” principle).
  • Notice and timing requirements: Employees should provide advance notice of military service, when feasible. Upon return, they must request reemployment within specified windows (e.g. next workday for brief service, up to 90 days for longer).
  • Health benefits and accommodations: Employees can continue employer health coverage (up to 24 months) during service, and must be reinstated to their health plans upon return, without waiting periods or exclusions for service-related conditions.
  • Restrictions on termination after return: After reemployment, returning staff cannot be terminated without cause for a period (e.g. 180 days if service was under 180 days; one year if longer).

What You Should Do Now

  1. Review your policies: Make sure your leave-of-absence and reemployment policies reflect USERRA’s requirements.
  2. Train HR and managers: Provide guidance on how to respond to military leave requests, reemployment demands, and benefit continuity.
  3. Document carefully: Maintain records of leave requests, notices, reemployment requests, and decisions.
  4. Evaluate cases for hardship exceptions cautiously: USERRA allows limited defenses (e.g. undue hardship), but courts construe them narrowly.
  5. Consult legal counsel: Especially since violations can carry serious liability: double damages, attorneys’ fees, and statutory penalties for knowing noncompliance.

Need help reviewing your USERRA compliance or leave policies? Contact us today at [email protected].

White House Announces Dramatic H-1B Fee Hike: What Employers Need to Know

On September 19, 2025, the White House issued a sweeping new policy: employers filing new H-1B visa petitions after September 21 must pay a $100,000 fee per petition, dramatically higher than existing costs. This bold move signals a sharp pivot in U.S. immigration enforcement, with broad implications for talent acquisition strategies.

What the Fee Change Covers — and Doesn’t

  • This one-time $100,000 fee is only for new H-1B petitions, not renewals or extensions.
  • It does not affect current H-1B visa holders or those whose petitions were filed before September 21, 2025.
  • Applicants outside the U.S. must pay it at the time of filing, though certain case-by-case exemptions may apply in the “national interest.”
  • Additional measures mandate higher prevailing wages, stricter oversight, and more rigorous compliance documentation.

Why the Increase?

The Administration frames the hike as a tool to reduce reliance on foreign talent, and push companies to hire and train U.S. workers instead. It also seeks to “upsell” the H-1B program toward only the highest skilled, highest paid foreign workers.

What Employers Should Do Now

  1. Reevaluate hiring plans: Consider domestic recruitment or job redesign to avoid H-1B dependence.
  2. Explore alternate visa pathways: Categories like O-1, EB-1, or EB-2 may remain viable—though each has its own eligibility rules.
  3. Document potential exemptions: If your business has national security, research, or critical STEM roles, you may qualify for relief.
  4. Budget early: The $100,000 outlay plus increased wages will impact cash flow and offers.
  5. Engage immigration counsel: With regulatory guidance and litigation likely to follow, expert counsel is essential.

If you have questions about how these changes could affect your hiring or visa planning, HR Synergy can help you navigate the new requirements and keep your business compliant.

Source: USCIS