Answers to Frequently Asked Questions on the DOL Proposed Overtime Rule
September 23, 2023
Answers to Frequently Asked Questions on the DOL Proposed Overtime Rule

On Aug. 30, 2023, the U.S. Department of Labor (DOL) announced a proposed rule to amend current requirements employees in white collar occupations must satisfy to qualify for an overtime exemption under the Fair Labor Standards Act (FLSA).


The FLSA white collar exemptions apply to individuals in executive, administrative, professional, and some outside sales and computer-related occupations. Some highly compensated employees may also qualify for the FLSA white collar overtime exemption.


To qualify for this exemption, white collar employees must satisfy the standard salary level test, among other criteria. This salary level is a wage threshold that white collar employees must receive to qualify for the exemption.


The DOL is proposing to increase the standard salary level from:

  • $684 to $1,059 per week ($55,068 per year); and
  • $107,432 to $143,988 per year for highly compensated employees.


Action Steps

The proposal does not impose any new requirements on employers at this time. However, employers should become familiar with the proposed rule and evaluate what changes they may need to adopt if the rule is implemented as proposed.


OVERVIEW

1. What is the purpose of the Department’s proposed rule?

This rulemaking proposes to update and revise the regulations for determining whether certain white-collar salaried employees are exempt from minimum wage and overtime requirements under section 13(a)(1) of the Fair Labor Standards Act (FLSA). Employees are exempt if they are employed in a bona fide executive, administrative, or professional (EAP) capacity as those terms are defined in the Department of Labor’s regulations at 29 CFR part 541. This exemption from the FLSA is sometimes referred to as the “white-collar” or “EAP” exemption.


2. What is “overtime?”

Unless specifically exempted, an employee covered by the FLSA must receive pay for hours worked in excess of 40 in a workweek at a rate not less than one and one-half their regular rate of pay. This is referred to as “overtime” pay.


3. What determines if an employee falls within the EAP exemption? 

Currently, to fall within the EAP exemption, an employee generally must: 


  1. Be paid a salary, meaning that they are paid a predetermined and fixed amount that is not subject to reduction because of variations in the quality or quantity of work performed (the “salary basis test”);
  2. Be paid at least a specified weekly salary level, which is $684 per week (the equivalent of $35,568 annually for a full-year employee) in the current regulations (the “salary level test”); and
  3. Primarily perform executive, administrative, or professional duties, as provided in the department’s regulations (the “duties test”). 


Certain employees are not subject to either the salary basis or salary level tests (for example, doctors, teachers, and lawyers).


4. When did the Department last revise the exemption regulations for EAP workers?

The Department last updated the EAP exemption regulations in 2019. That update, which included setting the standard salary level test at its current amount of $684 per week (equivalent to a $35,568 annual salary), has been in effect since January 1, 2020.


5. Why is the Department proposing to revise the exemption regulations for EAP workers?

The Department is committed to keeping the earnings thresholds up to date for the benefit of both workers and employers. Four years have passed since the 2019 rule, during which time salaried workers in the U.S. economy have experienced a rapid growth in their nominal wages, which lessens the effectiveness of the current salary level threshold. Through this rulemaking, the Department seeks to update the salary level test to more effectively identify who is employed in a bona fide executive, administrative, or professional capacity and ensure that the FLSA’s intended overtime protections are fully implemented.


In addition to updating the salary level to account for increased wages, the Department’s proposal would ensure that the salary level effectively performs its historic function of screening nonexempt employees from the overtime exemption and would more effectively account for the switch from a two-test to a one-test system.


6. What is the Department proposing to change about its exemption regulations for EAP workers?

In this rulemaking, the Department proposes to:


  • Increase the standard salary level to the 35th percentile of earnings of full-time salaried workers in the lowest-wage Census Region (currently the South), which would be $1,059 per week ($55,068 annually) based on current data;
  • Apply the standard salary level to Puerto Rico, Guam, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands, and increase the special salary levels for American Samoa and the motion picture industry; 
  • Increase the highly compensated employee (HCE) total annual compensation requirement to the annualized weekly earnings of the 85th percentile of full-time salaried workers nationally, which would be $143,988 per year based on current data; and
  • Automatically update these earnings thresholds every 3 years with current wage data to maintain their effectiveness.


7. Is the Department proposing any changes to the current duties test?

The Department is not proposing changes to the standard duties test, consistent with its approach in both the 2016 and 2019 rules. At this time, the Department favors keeping the current standard duties test, which is well known to employers and employees. As long as it is paired with an appropriate salary level requirement, the standard duties test can appropriately distinguish bona fide EAP employees from nonexempt workers. 


8. Where can I review, and how can I comment on, the Department’s proposed changes to the exemption regulations for EAP workers?

The Department's Notice for Proposed Rulemaking (“NPRM”) is available at www.regulations.gov. The Department encourages all interested parties to participate in the rulemaking process by submitting written comments regarding the NPRM within 60 days from the publication date in the Federal Register. 


FLSA Basics

9. What does the FLSA do?

The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards for employees in the private sector and in federal, state, and local governments. Covered nonexempt workers are entitled to a federal minimum wage of not less than $7.25 per hour. Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek.


10. Who is covered by the FLSA?

Generally, employees of enterprises that have an annual gross volume of sales made or business done of $500,000 or more are covered by the FLSA. In addition, employees of certain businesses are covered by the FLSA regardless of the amount of gross volume of sales or business done. These businesses include hospitals; establishments providing medical or nursing care for residents; schools (whether operated for profit or not for profit); and public agencies. Employees of employers that are not covered by the FLSA on an enterprise basis may still be entitled to its protections if they are individually engaged in interstate commerce.


11. Does the FLSA and the Department’s proposed rule apply to state or local government workers?

Yes, state and local government employers are subject to the FLSA and the Department’s proposed regulations concerning EAP employees.


12. Is there a small business exemption from the FLSA or the Department’s proposed rule for EAP workers?

The FLSA does not provide an exemption for small businesses. Generally, the FLSA and the proposed rule apply to employees of enterprises that have an annual gross volume of sales made or business done of $500,000 or more, and certain other businesses. The FLSA creates a level playing field for businesses by setting a floor below which employers may not pay their employees.


13. Is there an exemption for nonprofit organizations from the FLSA or the Department’s proposed rule?

There is no exemption for nonprofit organizations under the FLSA or in the proposed rule. Thus, the proposed rule may impact nonprofit organizations that have an annual dollar volume of sales or business done of at least $500,000. In determining coverage, only activities performed for a business purpose are considered. Charitable, religious, educational, or similar activities of organizations operated on a nonprofit basis where such activities are not in substantial competition with other businesses are not considered. Employees of employers that are not covered by the FLSA on an enterprise basis may still be entitled to its protections if they are individually engaged in interstate commerce.


14. How is overtime pay determined?

Unless exempt, an employee covered by the FLSA must receive overtime pay for all hours worked over 40 in a workweek at a rate not less than one and one-half times their regular rate of pay. For guidance in determining an employee’s “regular rate of pay” when calculating overtime pay, refer to WHD Fact Sheet #56A or the Department’s regulations at 29 CFR part 778.


15. What is the FLSA’s EAP exemption?

Section 13(a)(1) of the FLSA exempts individuals employed in a “bona fide executive, administrative, or professional capacity” from the Act’s minimum wage and overtime requirements. Certain computer professionals and outside sales employees are included in the exemption and therefore excluded from the minimum wage and overtime requirements. The FLSA instructs the Department to issue regulations that define and delimit the EAP exemption; those regulations are located at 29 CFR part 541.


16. I'm paid a salary and my job title is manager. Am I exempt from overtime pay?

Job titles do not determine exempt status, and the fact that a white-collar employee is paid on a salary basis is not alone sufficient to exempt that employee from the FLSA’s minimum wage and overtime requirements. For an exemption to apply, an employee’s specific job duties and salary must meet all of the applicable requirements provided in the Department’s regulations.


17. What if a state has its own laws about who is entitled to overtime pay?

The FLSA provides minimum standards and does not preempt a state from establishing more protective standards. If a state establishes a more protective standard than the provisions of the FLSA, the higher standard applies in that state. This would include, for example, exemption criteria for EAP employees under state law with higher earnings thresholds than those provided in the Department’s federal regulations.


Earnings Thresholds

18. What are the current earnings thresholds needed for the EAP exemption?

Under the current regulations, an executive, administrative, or professional employee generally must be paid at least $684 per week (equivalent to $35,568 annually for a full-year employee) to be exempt from the FLSA overtime protections. This $684 per week threshold is the standard salary level. 


A computer professional may be exempt if they are paid at least $684 per week or at least $27.63 an hour, if paid on an hourly basis. 


There is no salary level test required to qualify as an exempt outside sales employee. Certain professionals including doctors, lawyers, and teachers are also not subject to the salary tests. 


Finally, the current regulations also contain a less restrictive duties test for certain highly compensated employees who receive total annual compensation of $107,432 or more and are paid at least $684 per week.


19. What is the proposed standard salary level?

The Department is proposing to set the standard salary level at the 35th percentile of weekly earnings of full-time salaried workers in the lowest-wage Census Region (the South). Using 2022 data, the proposed salary amount would equal $1,059 per week (which is $55,068 annually for a full-year worker). 


20. Why is the Department proposing to set the standard salary level at the 35th percentile of weekly earnings of full-time salaried workers?

In updating the standard salary level, the Department seeks to more effectively identify who is employed in a bona fide executive, administrative, or professional capacity. The proposal updates the standard salary level to account for earnings growth since the 2019 rule and adjusts the salary level methodology based on the lessons learned in recent rulemakings. 


21. What salary levels have the Department proposed to apply in U.S. territories?

This proposal would restore the Department’s longstanding policy prior to 2019 of only setting special lower salary levels for employees in those U.S. territories that are not subject to the full federal minimum wage (currently $7.25 per hour). Accordingly, the Department proposes to apply the standard salary level ($1,059 per week) to employees in Puerto Rico, where the federal minimum wage has applied since 1996; Guam, where the federal minimum wage has applied since at least 1957; the U.S. Virgin Islands, where the federal minimum wage has applied since 1989; and the CNMI, where the federal minimum wage has applied since 2018.


The Department proposes to set a special salary level for employees in American Samoa equal to 84 percent of the standard salary level ($890 per week, based on a proposed standard salary level of $1,059 per month), since American Samoa remains subject to special minimum wage rates below the federal minimum wage. American Samoa is scheduled to increase its minimum wage rates until they equal the federal minimum wage. The Department proposes that 90 days after the highest industry minimum wage for American Samoa equals the federal minimum wage, the full standard salary level would apply for all EAP employees in all industries in American Samoa.


22. Is the Department proposing to change the special base rate for employees in the motion picture industry?

The current regulations permit employers to exempt employees in the motion picture industry who are paid a specified base rate per week (or a proportionate amount based on the number of days worked), so long as they meet the duties test for the EAP exemption. Consistent with its practice in recent rulemakings, the Department proposes to increase the required base rate in proportion to the proposed increase in the standard salary level test, resulting in a proposed base rate of $1,617 per week (or a proportionate amount based on the number of days worked). 


23. Is the Department proposing to increase the salary level for highly compensated employees?

The Department is proposing to set the Highly Compensated Employee (HCE) annual compensation level equal to the 85th percentile of earnings for full-time salaried workers nationwide. Based on current data, the proposed HCE threshold would be $143,988 per year, of which at least $1,059 per week (the proposed standard salary level) would have to be paid on a salary or fee basis. The Department believes that its proposed methodology results in an HCE level that is low enough to not restrict the use of the HCE test for employers in low-wage regions and industries, and high enough to guard against the unintended exemption of workers who are not bona fide executive, administrative, or professional employees in higher-income regions and industries.


Future Updates

24. Does the proposed rule address future updates to the earnings thresholds provided in the EAP exemption regulations?

The Department is proposing a mechanism to automatically update the earnings thresholds every three years to ensure that they remain effective tests for exemption. If finalized, this proposal would ensure that the Department can timely and efficiently update the earnings thresholds in future years to reflect current wage data. Experience has shown that the salary level test is a strong measure of exempt status only when it is up to date. Left unchanged, the test becomes substantially less effective as wages for overtime-protected workers increase over time. Automatically updating the salary level and HCE total annual compensation requirement using the most recent data will ensure that these tests continue to accurately reflect current economic conditions.


25. How is the Department proposing to automatically update the salary level and HCE total compensation levels?

The Department is proposing to update the standard salary level and the HCE total compensation requirement every three years to reflect current earnings data. Specifically, the Department is proposing to update the standard salary level by adjusting it to remain at the 35th percentile of weekly earnings of full-time nonhourly workers in the lowest-wage Census Region (currently the South). The Department is proposing to update the HCE total annual compensation requirement to remain at the annualized weekly earnings of the 85th percentile of full-time nonhourly workers nationally. The Department proposes to update both of these thresholds using the most recent available four quarters of data, as published by BLS, preceding the publication of the Department’s notice to automatically update the thresholds.


Because the proposed special salary level for American Samoa and the base rate for the motion picture industry are set in relation to the standard salary level, those earnings thresholds would also reset at the time the standard salary level is updated. At least 150 days before the date of the update of the standard salary level and the HCE total annual compensation requirement, the Department would publish in the Federal Register a notice with the new earnings levels described above.


26. Does the proposed rule include any special exceptions where the earnings thresholds would not be automatically updated?

The Department’s proposal includes a provision allowing the Department to temporarily delay a scheduled automatic update where unforeseen economic or other conditions warrant. This feature would afford the Department added flexibility to adopt to unforeseen circumstances without sacrificing the benefits provided by automatic updating.


Impact

27. What are the estimated costs, benefits, and transfers of the proposed rule?

The Department estimates that in Year 1, the proposed rule would impose $1.2 billion of direct costs on employers, including $427.2 million in regulatory familiarization costs, $240.8 million in adjustment costs, and $534.9 million in managerial costs. The Department estimates that the proposed rule would result in a Year 1 income transfer of $1.2 billion from employers to employees, predominantly from new overtime premiums, or pay raises to maintain the exempt status of some affected employees. Beyond these wage transfers, the proposal could reduce the risk of misclassification, increase worker productivity, reduce employee turnover, and increase personal time for workers. 


28. How many employees would be impacted by the proposed salary level increase?

In the first year, the Department estimates that 3.4 million workers exempt under the current regulations who earn at least the current weekly salary level of $684 but less than the proposed salary level of $1,059 would, without some intervening action by their employers, become newly entitled to overtime protection under the FLSA. 


Similarly, the Department estimates that an additional 248,900 workers who earn at least $107,432 per year (the current HCE total annual compensation level) and who meet the minimal HCE duties test but not the standard duties test, would, without some intervening action by employers, become eligible for overtime if the HCE total annual compensation level were increased to the proposed level of $143,988 per year. 



Source: U.S. Department of Labor – Frequently Asked Questions for the Notice of Proposed Rulemaking: Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees

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Is Your 401(k) Plan Working for Your Employees? Questions Employers Should Ask

August 31, 2026
Offering a 401(k) plan is an important part of a competitive benefits package, but simply having a retirement plan in place does not necessarily mean it is delivering the value you intended. A strong retirement plan should support both sides of the relationship. For employees, it should make saving for the future accessible, understandable, and manageable. For employers, it should support broader goals around recruitment, retention, financial wellness, and overall employee experience. Retirement plan participation has made significant progress in recent years. Vanguard's 2026 How America Saves report found that participation among eligible employees reached a record 86%, up from 65% when the study began 25 years ago. Vanguard points to improvements in plan design, including automatic enrollment, stronger default contribution rates, and employer support, as important drivers of that progress. For employers, that raises a useful question: Is your current retirement plan doing everything it could for your workforce? Here are seven areas worth reviewing. 1. Are Employees Actually Participating? Start with one of the simplest measures: how many eligible employees are using the plan? A retirement benefit can be well-designed on paper but have limited impact if a meaningful portion of the workforce never enrolls. Look beyond the overall participation rate and consider whether certain groups are participating less than others. New hires, younger employees, lower-paid employees, or particular departments may have different engagement levels. Low participation does not always mean employees are uninterested. Sometimes the issue is simply that enrollment feels complicated, information is unclear, or employees continue putting off a decision. 2. Are Employees Saving Enough to Make Participation Meaningful? Participation alone does not tell the entire story. An employee contributing a very small percentage of pay is technically participating, but may still be far from building the savings they need for retirement. Employers can review broader plan trends such as average contribution rates, how many employees are contributing enough to receive the full employer match, and whether participants tend to increase their savings over time. The goal is not for employers to determine how much any individual employee should save. Rather, it is to understand whether the plan's structure and communication are encouraging employees to take meaningful steps toward long-term financial security. 3. Is Your Employer Match Accomplishing What You Intended? Employer contributions can be one of the most visible and valuable parts of a retirement benefit. But it is worth periodically asking why your organization offers a match and whether the current structure still supports that objective. Is the goal to encourage higher savings? Strengthen recruitment and retention? Provide a more competitive benefits package? Support employee financial wellness? Employees should also understand how the match works. If participants are regularly contributing below the level required to receive the full employer contribution, that may indicate an opportunity for clearer education or communication. 4. Does Your Plan Make Saving Easy? One of the biggest changes in retirement planning over the past several decades has been the shift toward plan designs that make saving easier. Vanguard's 2026 research found that nearly two-thirds of plans with automatic enrollment now use a default contribution rate of at least 4%, while approximately one-third default participants at 6%. Features such as automatic enrollment and automatic contribution increases can help reduce the need for employees to make every decision on their own. Employers may also want to consider the everyday participant experience: Is enrollment straightforward? Is it easy to change a contribution rate? Can employees access their accounts without unnecessary friction? Are payroll deductions processed consistently? Can participants easily update beneficiaries or review plan information? Small barriers can have an outsized impact on whether employees actively engage with the benefit. 5. Do Employees Understand Their Retirement Benefit? Employees cannot fully value a benefit they do not understand. Retirement plans can involve unfamiliar terminology around contribution types, employer matches, vesting, investment options, distributions, and other plan features. For employees who are new to retirement saving, that information can quickly become overwhelming. Consider whether employees clearly understand: How to enroll How much the employer contributes, if applicable How the employer match works How to change their contribution Where to find plan information Who to contact when they have questions Retirement education also should not necessarily end after onboarding. Employees' questions and priorities change as their careers, compensation, and personal circumstances evolve. Clear, ongoing communication can help employees make more informed decisions and better appreciate the benefit their employer is providing. 6. Does the Plan Support Employees at Different Career Stages? A workforce rarely has one set of retirement needs. An employee just beginning their career may need help understanding why starting early matters. A mid-career employee may be balancing retirement savings with housing, childcare, or other financial priorities. Someone approaching retirement may have entirely different questions about contribution opportunities, account management, and the transition out of the workforce. A strong retirement benefit should be able to support employees across those different stages. That may include thoughtful plan design, educational resources, appropriate investment options, access to professional guidance, and communication that goes beyond a one-size-fits-all approach. 7. Does the Plan Still Fit Your Business? Retirement plans should evolve alongside the organizations that sponsor them. Your workforce may be larger than it was when the plan was established. Your recruiting strategy may have changed. Employees may now work across multiple states. Your internal HR or payroll team may have different capacity. Your compensation structure or benefits philosophy may have evolved. Those changes can all be reasons to revisit the current retirement plan. For some employers, an existing traditional 401(k) may remain the best fit. Others may benefit from changes to plan design, investment support, administrative structure, or a different retirement solution altogether, such as a Pooled Employer Plan (PEP) . The goal is not to change a retirement plan simply for the sake of changing it. It is to periodically confirm that the plan still aligns with the needs of both the organization and its employees. A Retirement Plan Should Do More Than Exist A 401(k) plan is more than an administrative requirement or another line on a benefits summary. When structured thoughtfully, it can become a meaningful part of the employee experience and an important tool for attracting, retaining, and supporting a workforce. Employers should periodically look beyond whether the plan is functioning and ask a bigger question: Is it producing the experience and outcomes we want for our people and our business? That review may include participation, savings behavior, employer contributions, employee education, plan design, investment support, and whether the overall structure still fits the organization. At Simco , we help employers evaluate retirement solutions based on their individual goals, workforce, and business needs. From traditional retirement plans to options such as the Simco PEP, our approach is focused on helping employers understand their choices and determine which structure makes the most sense for their organization. If it has been a while since your retirement plan was evaluated beyond its day-to-day administration, now may be a good time to take a closer look.

Hiring an Employee in Another State: Employer Compliance Guide

August 28, 2026
Hiring an employee outside your home state can be a great way to expand your talent pool, support remote work, or grow into new markets. But before extending an offer, employers should understand that hiring someone in another state, or another country, can affect much more than payroll. The rules that apply to an employee often depend on where the employee actually performs their work , not simply where the employer is headquartered. That means one out-of-state hire can potentially create new requirements involving payroll taxes, employee benefits, workers' compensation, HR policies, retirement plans, business insurance, and more. Not every consideration below will apply to every employee. Still, reviewing these areas early can help employers avoid last-minute complications after someone has already started working. 1. Payroll and Tax Registration Payroll is often one of the first areas affected when an employee begins working in a new state. Employers may need to register for state income tax withholding and unemployment insurance accounts before processing payroll for the employee. Depending on the employee's location, local payroll taxes may also apply. Your payroll system may need to be updated to account for: State-specific withholding requirements State unemployment taxes Local payroll taxes Applicable state or local wage rules Additional reporting requirements Employers should also be aware that having an employee working in another state may create additional business tax obligations, sometimes referred to as nexus . The specific impact depends on the states involved and the circumstances of the employment relationship, so payroll registration and tax implications should be evaluated before the employee's first payroll. If the employee will be working outside the United States, the process can become considerably more complex. Foreign payroll registration, country-specific tax reporting, and other employment-related obligations may need to be addressed. 2. Human Resources and Employment Law A common misconception is that an employer only needs to follow the employment laws of the state where the company is headquartered. In many situations, employment requirements are based on where the employee works . An employee working remotely from another state may therefore be subject to different rules involving: Minimum wage and overtime Meal and rest periods Paid sick leave Paid family or medical leave Expense reimbursement Final paycheck timing Required workplace notices Wage statements Employee classifications Your existing employee handbook may also need to be reviewed. A policy that works for employees in one state may not fully address requirements in another. Employers with employees across multiple jurisdictions may need state-specific policy provisions or addenda to account for differences in leave, pay, reimbursement, or other employment practices. Taking the time to identify those differences before hiring can help managers apply policies consistently and reduce compliance risk later. 3. Employee Benefits Benefits should also be reviewed before hiring an employee in another geographic area. One of the most important questions is whether your current health plan provides meaningful access to care where the employee lives. For example, your medical carrier may have a strong provider network around your headquarters but limited in-network access in another state or region. Before extending an offer, employers should review: Medical plan network availability Employee eligibility under current benefit plans State-mandated disability benefits Paid family or medical leave requirements Paid sick leave requirements Benefit administration processes For employers developing a more geographically dispersed workforce, it may also be worth evaluating whether the current benefits strategy remains sustainable. Depending on the organization and workforce, options such as a national PPO plan or an Individual Coverage Health Reimbursement Arrangement, or ICHRA , may be worth discussing as part of a longer-term benefits strategy. The goal is not simply to determine whether an employee is technically eligible for coverage. Employers should also consider whether the benefits being offered are practical and usable where that employee lives. 4. Commercial Insurance Adding an employee in another state can also affect your business insurance. Workers' compensation is one of the most important areas to review. Your existing workers' compensation policy may need to be extended to include the employee's work state. In some situations, a separate policy or additional coverage arrangement may be required. Employers should notify their insurance advisor or carrier before the employee begins work so the appropriate requirements can be evaluated. Other commercial insurance considerations may include: Employment Practices Liability Insurance Employment Practices Liability Insurance, or EPLI, should be reviewed when an employer expands its workforce into additional jurisdictions. Different state employment laws and employee protections can create different exposures, particularly for remote workers. Cyber Liability Remote employees may also create additional cybersecurity considerations. Employees working from home may access company systems, confidential information, payroll data, employee records, or client information through home internet connections or company-issued devices. Cyber liability coverage and internal cybersecurity practices should be reviewed as the remote workforce expands. Other Liability Exposures Employers should also consider whether the employee will: Travel for business Maintain a home office Use company-owned equipment Drive for work Store company property at home These activities may introduce additional insurance considerations that should be discussed with your commercial insurance advisor. 5. Retirement Plan Administration Retirement benefits can sometimes be overlooked when employers expand into another state. Before hiring, confirm whether the employee will be eligible to participate in your existing retirement plan and whether your payroll and retirement systems are prepared to process the employee correctly. Consider reviewing: Plan eligibility requirements Employee contribution deductions Employer contribution or match calculations Payroll integration with your retirement provider State-sponsored retirement program requirements Several states have established or are implementing state-sponsored retirement savings programs for certain employers that do not offer a qualifying workplace retirement plan. If your organization already offers a retirement plan, those requirements may not apply, but employers should still confirm how the rules work in any state where employees will be located. 6. International Employees Require Additional Planning Hiring someone who will work outside the United States introduces another level of complexity. International employment can create obligations involving: Foreign payroll registration Local employment laws Income tax withholding Social insurance or similar payroll contributions Data privacy Employee benefits Business tax obligations Employers should determine how the individual will legally be employed before work begins. If the employee will be working within the United States , employment authorization must be verified and Form I-9 requirements generally apply. An employee who is otherwise authorized to work may in some circumstances begin employment before receiving a Social Security number. Payroll and employment records should then be updated when the number becomes available. Federal income tax withholding and FICA treatment can also vary depending on an individual's immigration or tax status, and certain tax treaties may affect withholding requirements. Because international employment can quickly involve multiple areas of law and taxation, employers should involve the appropriate tax, legal, payroll, and HR advisors before finalizing the arrangement. 7. Make Sure Your Internal Teams Are Coordinated One of the biggest risks with an out-of-state hire is not necessarily any single requirement. It is that different parts of the organization may not realize the hire affects them. HR may know where the employee lives, but payroll may not know a new state registration is required. Payroll may update the employee's taxes, but the benefits team may not realize the medical network is limited in that area. The hiring manager may approve remote work, but the commercial insurance team may not yet know an employee is working in another jurisdiction. That is why employers should treat an out-of-state hire as a cross-functional decision , not simply a recruiting decision. Before extending an offer, make sure the appropriate people have reviewed the situation across payroll, HR, benefits, retirement, tax, and insurance. Before You Extend the Offer A simple pre-hire review can help identify potential requirements before they become urgent. Before hiring an employee in another state or country, consider confirming: Whether workers' compensation or other commercial insurance coverage needs to change Whether the employee will have appropriate access to your current benefits Whether new payroll withholding or unemployment accounts are required Whether local or state payroll taxes apply Whether employment policies need to be updated Whether state-specific leave or wage requirements apply Whether the employee is eligible for your retirement plan Whether state-sponsored retirement requirements need to be considered Whether the hire creates additional business tax obligations Whether international employment rules apply One Hire Can Affect More Than One Part of Your Business Hiring beyond your home state can open access to a much larger talent pool, but it can also create responsibilities that are easy to overlook when departments operate independently. Payroll, HR, benefits, commercial insurance, and retirement administration are closely connected. A change in one area can quickly affect several others. The best time to identify those considerations is before the employee's first day , not after a payroll issue, coverage question, or compliance requirement surfaces. At Simco , we help employers coordinate these moving pieces across payroll and HCM, HR advisory, employee benefits, commercial insurance, and retirement services. If your organization is considering hiring an employee in another state or expanding your remote workforce, our team can help you identify the areas that should be reviewed before you move forward.

Taking a Car to College? What Students and Parents Should Know About Insurance

August 20, 2026
Sending a student off to college comes with a long checklist. Between tuition, textbooks, move-in plans, laptops, dorm supplies, and figuring out who remembered the extra-long twin sheets, insurance probably is not the first thing on anyone's mind. But whether your student is taking a car to school, leaving one behind, living in a dorm, or moving into an off-campus apartment, the change in where they live and drive can affect their insurance needs. A quick conversation with your insurance agent before the semester begins can help make sure your family's coverage still reflects what is actually happening once your student heads to campus. Is Your Student Taking a Car to College? If your student is bringing a vehicle with them, one of the most important things to review is where the vehicle will primarily be kept or garaged . Where a vehicle is located is one of the factors insurers may use when evaluating auto insurance. A car that was previously kept at your home but will now spend most of the year at a college several hours away, or even in another state, represents a change your insurance carrier may need to know about. Before your student leaves, let your insurance agent know: Where they will be attending school Whether they are living on or off campus Whether the vehicle is going with them Where the car will normally be parked Whether their driving habits or annual mileage will change significantly Do not assume that simply keeping your student's home address on the policy is enough. Insurance requirements and carrier guidelines can vary, particularly when a student attends school in another state, so it is worth confirming how the vehicle should be listed before the move. What If the Car Is Staying Home? If your student is going away to school and leaving their vehicle behind, that is worth discussing with your agent too. Depending on the insurance company, how far away the student attends school, how frequently they return home, and who has access to the vehicle, there may be different options for how the student and vehicle should be handled on the policy. Some insurers offer discounts when an eligible student attends school away from home without regular access to a vehicle. The Insurance Information Institute specifically recommends notifying your agent when a college student leaves the car at home because a premium discount may be available. The important part is not simply removing your student from the policy because they will not be driving every day . They may still drive when they come home for weekends, holidays, or school breaks. Your agent can help you determine the appropriate setup based on how the vehicle will actually be used. Don't Overlook Good Student Discounts College can be expensive, so it is worth checking whether your student qualifies for any available auto insurance discounts. Some insurance companies offer a good student discount for younger drivers who meet certain academic requirements. Eligibility, age limits, documentation requirements, and the amount of the discount vary by carrier, but the National Association of Insurance Commissioners lists good student discounts for drivers under 25 among the discounts that may be available. If your student has maintained good grades, ask your agent whether your current carrier offers a discount and what documentation is needed. While you are reviewing the policy, it is also a good time to make sure any other eligible discounts are being applied. What If Your Student Only Drives Occasionally? College can change driving habits considerably. Maybe your student used to drive to school and work every day but will now walk around campus. Maybe they will take the car to college but use it only occasionally. Or maybe the car will stay at home and they will drive only during school breaks. Let your agent know how the vehicle's use is changing rather than assuming the existing policy setup still makes sense. Insurance companies consider a variety of factors when determining coverage and premiums, and accurate information about drivers, vehicles, addresses, and usage helps make sure the policy reflects the household's current circumstances. Going to College Out of State? Have an Extra Conversation If your student is attending school in another state, it is especially important to review their insurance before move-in. Insurance is regulated at the state level, and requirements can differ depending on where a vehicle is registered, where it is primarily kept, and the rules of the applicable insurance carrier and state. You may not need to completely change your family's insurance arrangement just because your child attends an out-of-state college. But it is better to confirm the proper setup ahead of time rather than discover an issue after an accident or claim. Your agent can help you understand what needs to be updated, if anything, based on your student's specific situation. The Car Isn't the Only Thing to Think About Think about everything your student is packing for college: a laptop, phone, tablet, clothes, furniture, bicycle, gaming system, sports equipment, musical instruments, textbooks, and probably several things they insist are absolutely necessary for dorm life. Together, those belongings can be worth more than you realize. Whether and how those items are insured can depend in part on where your student lives. If Your Student Lives in a Dorm Students living in college housing may have some protection for their belongings through a parent's homeowners or renters insurance policy. However, coverage away from the primary residence can have different limits or restrictions. The NAIC notes that students living on campus may have coverage under a parent's homeowners or renters policy, but the amount available may be limited. Before assuming everything in the dorm is protected, check: Whether your policy extends to a student living at college The applicable personal property limit The deductible Whether expensive electronics or other valuable items have special limits What types of losses are covered It is also helpful to create a basic inventory of the belongings your student takes with them, including photos and approximate values. If Your Student Lives Off Campus Moving into an apartment or rented house changes the conversation. A landlord's insurance generally protects the building itself, not your student's personal belongings. Students living off campus should check whether their family's existing coverage extends to their rental or whether they should have their own renters insurance policy. Renters insurance can generally provide protection for areas such as: Personal belongings Personal liability Additional living expenses following certain covered losses That can become important if belongings are stolen, damaged by a covered event, or if the student is responsible for an incident involving another person or their property. Roommates add another consideration. Do not automatically assume one roommate's renters policy protects everyone living in the apartment. Each student should understand whose belongings and liability are actually covered under the policy. A Five-Minute Insurance Check Before Move-In College changes a lot about a family's routine, and insurance needs can change right along with it. Before loading up the car for move-in day, consider asking these questions: Is the student taking a vehicle to school? Make sure the insurer knows where the car will primarily be kept and how it will be used. Is the vehicle staying home? Ask how an away-at-school student should be listed and whether any discount may apply. Will the student still drive when home for breaks? Make sure the policy setup accounts for how they will realistically use the vehicle throughout the year. Does the student qualify for a good student discount? Ask what your carrier offers and whether documentation is required. Is the student living in a dorm or off campus? Review how their belongings are protected and whether renters insurance should be considered. Are they bringing expensive electronics or other valuable belongings? Check your coverage limits rather than assuming every item is fully protected. Are they attending school in another state? Confirm whether the location creates any additional insurance considerations. College Is a Big Change. Your Coverage Should Keep Up. Sending a student to college is an exciting milestone, but it also changes where they live, where they drive, how often they use a vehicle, and where many of their belongings are kept. Those details matter when it comes to insurance. You do not necessarily need new coverage simply because your child is heading to college, but you do need to make sure your existing coverage still fits your family's new routine. At Simco Insurance & Wealth Management , our licensed insurance agents can help you review your family's auto, homeowners, and renters coverage, identify any updates that may be needed, and make sure you understand your options before the school year gets underway. If your college student's living or driving situation is changing this fall, contact our team for a quick coverage review before move-in.

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