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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New System, Same Problems? Why a Payroll Transition Should Start With an Assessment

October 14, 2026
Changing payroll or HCM providers can be a major decision for any employer, especially for small and mid-sized businesses where payroll touches nearly every employee, every pay period, and many of the systems that keep the business running. That is why a successful transition should involve more than simply moving data from one platform into another. A new system can offer better technology, stronger reporting, improved employee self-service, and more efficient workflows. But those benefits are not automatic. If an employer simply recreates the same workarounds, outdated data, and disconnected processes in a new platform, the result may look different without actually working much better. A payroll transition should be an opportunity to step back, evaluate how the business operates today, and intentionally build a better environment for the future. Start With How the Business Actually Works Before configuring a new payroll or HCM system, it is important to understand what is happening in the current environment. That means looking beyond payroll processing and examining how information moves through the organization from onboarding and timekeeping to benefits, HR administration, reporting, and eventually separation. For many growing businesses, processes develop gradually. Spreadsheets, manual approvals, and duplicate data entry may have been created to solve individual problems over time. Together, those workarounds can create unnecessary administrative work and increase the risk of errors. Before moving into a new system, employers should identify where information is being entered more than once, what still depends on manual follow-up, where managers or employees routinely get stuck, and which reports are difficult to produce. That creates a much stronger foundation than simply asking how to make the new system look like the old one. Separate What Works From What Has Simply Become Familiar One of the easiest mistakes to make during implementation is assuming that every existing process should be preserved. Familiarity does not always mean efficiency. A payroll workflow, approval structure, or reporting process may exist simply because that is how the previous system was configured. A useful question to ask is: If we were designing this process today, would we still do it this way? Some processes will absolutely make sense to keep. Others may be creating unnecessary effort because of old system limitations. The goal should not be to change everything. It should be to preserve what works while improving the areas that create friction, confusion, or risk. Clean Up the Data Before It Becomes New-System Data Payroll and HCM systems contain a significant amount of information, including employee data, tax setup, earnings and deductions, departments, locations, job information, permissions, benefits, and timekeeping rules. Over time, some of that information may become outdated, duplicated, or structured in a way that no longer reflects the business. Moving that information into a new system without reviewing it first can preserve those same issues. A thoughtful implementation should include time to validate employee records, review earning and deduction codes, confirm tax setup, evaluate organizational structures, and identify information that should be cleaned up before migration. The objective is not simply to move data successfully. It is to start the new environment with information that is as accurate, organized, and useful as possible. Payroll Should Not Be Evaluated in Isolation Payroll may be the system that processes the paycheck, but the information it relies on comes from many different parts of the business. Hiring, timekeeping, HR, benefits, retirement contributions, employee status changes, and other workforce processes all intersect with payroll. When those areas are managed independently by different vendors or disconnected systems, employers are often left responsible for making everything work together. That can create duplicate entry, manual reconciliation, inconsistent data, and more opportunities for something to fall through the cracks. A better implementation looks at the entire administrative environment, not just the payroll engine. Why the ASO Model Matters This is where an Administrative Services Organization, or ASO, model can create meaningful value for small and mid-sized employers. Traditionally, businesses often purchase payroll, HR, benefits, retirement, and commercial insurance from separate providers. Each provider may do its individual job well, but the employer is still left managing the gaps between them. Those gaps matter because these functions are highly interdependent. A new hire can affect payroll, benefits eligibility, workers’ compensation exposure, retirement participation, and HR compliance. A termination can trigger payroll changes, benefits administration, HR documentation, and additional follow-up. An ASO approach is designed to bring those functions into a more coordinated model. Instead of asking the employer to act as the connector between multiple vendors, the goal is to create greater alignment across the services that support the workforce. At Simco, that means looking at HCM technology, HR advisory, employee benefits, commercial insurance, and retirement advisory as part of one broader business environment. The value is not simply access to more services. It is creating a more connected administrative structure with fewer handoffs, clearer ownership, and better visibility. Build Around the Employee Lifecycle, Not Just the Payroll Run A well-designed HCM environment should support more than the moment payroll is processed. It should help manage the full employee lifecycle, from onboarding and timekeeping through compensation, benefits, HR administration, retirement, and offboarding. Looking at implementation through that lens often reveals opportunities that would otherwise be missed. Onboarding may still be manual. Managers may submit changes through email. Benefit information may need to be entered in multiple places. Employee data may not flow consistently between systems. These may not seem like payroll problems, but they directly affect how efficiently payroll and HR administration operate. That is why implementation conversations should include more than pay frequency and tax setup. They should also examine how employees enter the organization, how managers interact with the system, how changes are communicated, and where administrative work tends to pile up. Leave Enough Time to Build It Correctly A thoughtful assessment takes time, which is why employers should avoid waiting until the last minute to begin a payroll or HCM transition. There is a significant difference between getting a system live and building a system well. A well-planned implementation creates room to evaluate processes, validate data, configure the system, test workflows, train users, and correct issues before employees depend on it. For employers considering a January transition, beginning the conversation in the fall can provide valuable runway and allow for more deliberate decisions before year-end pressures increase. Why Simco Starts With the Blueprint At Simco, we believe implementation should begin with understanding the business, not simply collecting files. Our Simco Blueprint assessment is designed to look at how an employer is operating today before the new environment is built. We review current processes, identify what is working, uncover areas of friction, and look for opportunities to improve how the organization uses its payroll and HCM technology. That assessment also considers how payroll interacts with HR, benefits, commercial insurance, and retirement. The objective is to make sure the system supports the business as a whole rather than solving one problem while creating another. A successful transition should leave an employer with more than a new provider. It should create a stronger foundation for how the business manages its people and administrative responsibilities. A New System Should Be an Opportunity to Work Better Changing payroll or HCM providers is a significant project, but it can also be an opportunity to improve processes that may have been creating frustration for years. The key is resisting the temptation to simply recreate the old environment. Before moving data, employers should understand their current processes. Before configuring workflows, they should decide whether those workflows still make sense. Before going live, they should make sure the different pieces of their administrative environment are working together effectively. A new system should not just be a different place to do the same work. It should help make the work easier. If your organization is considering a payroll or HCM change, Simco can help you evaluate your current environment, identify opportunities for improvement, and understand what a thoughtful transition could look like. Ready to take a closer look at your current setup? Talk with the Simco team .

Thinking About a January Payroll Switch? 4 Things Employers Should Know Now

October 8, 2026
January is one of the most natural times for an employer to move to a new payroll or HCM provider. A new calendar year creates a clean transition point for payroll records, reporting, employee communication and internal processes. But a January go-live does not mean the work should begin in January. For employers considering a change, the most important part of the transition often happens months earlier. A successful implementation requires time to understand the current environment, make decisions about what should change, validate employee and payroll data, configure the new system, test it and prepare everyone who will use it. If a January payroll change is on your radar, here are four things worth knowing now. 1. A January switch should usually start well before January One of the biggest misconceptions about changing payroll providers is that the transition begins when the new system goes live. In reality, that is the end of the implementation process. Before the first payroll can run, there are a number of decisions and setup items that may need attention, including employee records, earnings and deductions, tax information, pay schedules, timekeeping rules, direct deposit information, security permissions, reporting requirements, integrations and other company-specific workflows. The complexity will vary from employer to employer, which is why there is no single implementation timeline that fits every organization. But if your goal is to be live at the beginning of the year, October and early November are a much better time to begin the conversation than December. Starting earlier gives both the employer and the new provider room to work carefully instead of trying to force a major system change through the busiest part of year-end. 2. Do not automatically recreate everything you have today Changing payroll providers is an opportunity to fix problems, not transfer them. It can be tempting to approach implementation by simply copying the setup in the current system into the new one. That may seem like the fastest path, but it can also carry old inefficiencies, outdated processes and bad data directly into the new platform. Before building anything, employers should take a closer look at questions such as: Which payroll processes create the most manual work? Are employees or managers struggling with any part of the system? Are there recurring corrections or data issues? Are you maintaining information in spreadsheets because the current system does not handle it well? Are timekeeping, HR, benefits and payroll working together effectively? Are there reports your team needs but struggles to produce? Have your workforce, policies or business processes changed since the system was originally implemented? A provider change should create a better operating environment, not simply give the same process a new login screen. This assessment stage is one of the reasons beginning early matters. 3. Data accuracy becomes especially important at year-end A payroll transition involves more than moving names and pay rates. Employee information, year-to-date wages, taxes, deductions and other payroll records may all play a role in making sure the old year closes correctly and the new year begins accurately. Year-end also brings important employer reporting responsibilities. Employers remain responsible for ensuring payroll tax filings and Forms W-2 are accurate and filed on time even when they use a third-party payroll provider ( IRS ). That makes data review an important part of any year-end implementation. Employers should expect to spend time verifying items such as: Employee names, addresses and Social Security numbers Federal, state and local tax setup Year-to-date payroll totals Earnings and deduction codes Benefit deductions Retirement contributions Garnishments and other recurring deductions Direct deposit information Company tax information and filing setup There may also be special year-end items such as bonuses, fringe benefits or other adjustments that need to be reflected correctly. The goal is not simply to import data. It is to make sure the information going into the new system is accurate and that responsibility for year-end versus new-year reporting is clearly understood. 4. The right implementation should include testing, training and a clear owner Technology is only one part of a payroll conversion. Someone also needs to coordinate the process. A good implementation should establish clear responsibilities, deadlines and points of contact so the employer is not left trying to manage multiple moving pieces on their own. Before going live, employers should understand: Who is overseeing the implementation? There should be someone responsible for keeping the project moving and helping coordinate questions, decisions and outstanding items. How will the system be tested? Payroll calculations, deductions, taxes, time data and other important configurations should be reviewed before the first live payroll. How will managers and employees be prepared? If employees will use a new portal, mobile app, timekeeping process or enrollment experience, communication and training should be part of the transition. What support will be available after go-live? Implementation should not end the moment the first payroll processes. Employers should know who they will contact when questions arise afterward. A well-managed transition gives an employer time to catch issues before they become payroll-day emergencies. January can be a good time to change if you give yourself enough runway For employers who are frustrated with their current provider, January can provide a natural opportunity for a fresh start. However, this decision should not be rushed simply to hit a January 1 date. The better question is: Do we have enough time to evaluate our current process, build the new environment correctly and make the transition confidently? If the answer is yes, starting the conversation now can make the next few months much more manageable. At Simco, we work with employers to look beyond the payroll system itself. We assess how payroll, HR, timekeeping, benefits and the surrounding processes fit together so the new environment is built around how the business actually operates. If you are considering a payroll or HCM change for 2027, now is the time to start mapping out what the transition would involve. A short conversation can help determine what needs to happen, what information you will need and whether a January transition makes sense for your organization. Want to talk through your January timeline? Click here .

How Financial Wellness Supports the Employee Experience

September 21, 2026
For a long time, conversations about employee financial wellbeing started and ended with compensation. Pay people accurately, pay them on time, offer a competitive benefits package, and the employer had largely done its part. Those things are still fundamental. But the way employees experience their finances is much broader than a paycheck arriving every other Friday. A car repair does not wait until payday. A medical bill can arrive unexpectedly. Someone trying to improve their credit may not know where to begin. Another employee may be juggling everyday expenses while trying to save for a home, pay down debt or simply build a little more breathing room into their monthly budget. Employers are not expected to solve those challenges. But increasingly, they are recognizing that they can make useful resources easier to access. That shift is helping financial wellness become a more meaningful part of the overall employee experience. Financial Wellness Is Really About Giving Employees More Options There is no single definition of financial wellness that applies to everyone. For one employee, it may mean learning how to build a budget that actually works for their household. For another, it may mean having access to earned wages when an unexpected expense comes up before payday. Someone else may be focused on improving their credit, understanding financial terminology or finding an easier way to complete an employment or income verification. That is part of what makes this area different from many traditional benefits. Employees are not all trying to solve the same problem at the same time. A strong financial wellness approach does not assume that they are. Instead, it gives employees access to a range of resources and allows them to decide what is useful for their own circumstances. The employer is not stepping into the role of financial adviser. The employer is simply making it easier for employees to find tools, education and support when they need them. That can be a powerful distinction. The Employee Experience Extends Beyond What Happens at Work When organizations think about employee experience, the conversation often centers on things like company culture, managers, career development, recognition and benefits. Those things matter enormously. But employees also bring the realities of everyday life with them when they come to work. Financial concerns are one of those realities. An employee who is worried about an unexpected expense, trying to make sense of debt or unsure where to find reliable financial information may still show up and do their job well. But that does not mean those concerns disappear during the workday. This is where employers have an opportunity to think more broadly about support. The goal is not to remove every source of financial stress. That would be unrealistic. The opportunity is to make certain situations a little easier to navigate by connecting employees with resources they may not otherwise know about or have convenient access to. Sometimes that means education. Sometimes it means greater flexibility. Sometimes it simply means removing friction from an everyday process. Taken together, those small improvements can contribute to an employee experience that feels more thoughtful and supportive. Useful Benefits Are Often the Ones Employees Can Actually Use Employers spend significant time and money building benefits packages, but a benefit only creates value when employees understand it and can realistically access it. That is one reason financial wellness resources are particularly interesting. Many of them are designed around practical, everyday needs rather than something an employee may only use once or twice a year. They can help people answer questions, learn something new, access information or manage an immediate financial need. This creates an opportunity for employers to think beyond simply adding more benefits. Sometimes the better question is: How can we make the resources already available to employees more useful, accessible and relevant to their daily lives? That mindset can be especially valuable for organizations that want to improve the employee experience without adding another complicated program for HR to administer. The Payroll and HCM Experience Is Changing Too Payroll technology has traditionally been viewed as operational infrastructure. It calculates pay, handles taxes, stores employee information and keeps the organization moving. All of that remains essential. But modern HCM platforms increasingly sit at the center of much more of the employee experience. Employees may log into the same system to view a paystub, update personal information, enroll in benefits, request time off or access other workplace resources. Because they are already interacting with that technology, it creates a natural place to connect them with additional tools. That matters. A resource hidden on an intranet page that no one remembers exists has limited value. A resource that is connected to technology employees already use has a much better chance of becoming part of their normal experience. For HR teams, there is another benefit: introducing additional employee resources does not necessarily have to mean introducing another disconnected system, another login or another administrative burden. When tools work within the broader HCM ecosystem, employers can expand what they offer while keeping the experience simpler for everyone involved. Financial Wellness Can Support the Employer, Too The most important reason to offer financial wellness resources is the value they can provide to employees. But there is an employer benefit as well. Organizations are continually looking for meaningful ways to strengthen their employee value proposition. Compensation will always be a major part of that equation, but employees also notice how easy or difficult it is to navigate everyday life at work. Can they find the information they need? Are useful resources clearly communicated? Does the technology make things easier? Does their employer seem to think about the employee experience beyond the minimum requirements? Those details shape how people experience an organization. Financial wellness resources can become one more way for employers to demonstrate that support in a practical way. They can complement existing benefits, help employees get more value from the technology already in place and give HR teams another resource to point employees toward when appropriate. The value is not necessarily in one dramatic program. Often, it is the accumulation of small conveniences and helpful resources that makes an employee experience feel noticeably better. A New Set of Resources for Simco Clients This thinking is part of why we were excited to recently expand the resources available to Simco clients through our partnership with isolved. Through isolved People Cloud™, eligible employees now have access to additional tools from FinFit, ZayZoon and Equifax , each designed to support a different part of the financial wellness and employee experience. FinFit provides financial education and wellness resources that can help employees build knowledge and confidence around everyday financial decisions. ZayZoon offers employees additional financial flexibility, including access to earned wages before the traditional payday when needed. Equifax provides employment and income verification services that can help simplify a process employees may encounter when applying for a loan, renting a home or completing other important financial transactions. Each resource serves a different purpose, and not every employee will need every tool. That is exactly the point. The goal is to create more options and make them easier to access. Making Resources Available Is Only the First Step One of the easiest mistakes employers can make is assuming that introducing a new benefit automatically means employees will use it. Usually, awareness has to come first. Employees need to know what a resource is, why it exists and when they might consider using it. That communication does not have to be complicated. A short reminder in an employee newsletter, a mention during onboarding, a benefits communication or an occasional educational email can go a long way toward keeping useful resources visible. It can also help to communicate these tools in terms employees actually relate to. Instead of simply saying, “We offer a financial wellness program,” explain what that could mean in real life: Need help understanding your budget? There is a resource for that. Want to learn more about credit? There is a resource for that. Need access to part of your earned pay before payday? There may be an option available. Completing an income verification? That process may already be easier than you think. When employees understand the practical purpose behind a resource, it becomes much more meaningful. A Better Employee Experience Is Often Built in Small Ways Supporting employees does not always require launching a major new initiative. Sometimes it means looking at the systems, benefits and resources already surrounding employees and asking whether they could be doing more. Could something be easier to access? Could employees have more flexibility? Could a process require fewer steps? Could a resource help someone feel more informed or confident? Those may seem like small questions, but they are increasingly important ones. Financial wellness is ultimately about giving employees more tools to navigate their own financial lives. Employers do not need to have every answer, and they do not need to solve every challenge. But they can help create an environment where useful resources are easier to find, easier to understand and available when they matter. For Simco, that is what makes these new resources exciting. They are not simply additional features inside a platform. They are another way the technology our clients already use can create a better experience for the people behind every payroll.  Want to learn more about the financial wellness resources now available through Simco and isolved? Contact our team to learn more.

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