Navigating the Impacts of the "One Big Beautiful Bill Act"

What the OBBBA Means for Your Team 

On July 4, 2025, the "One Big Beautiful Bill Act" (OBBBA) was signed into law, bringing changes that directly affect how employers lead, manage, and support their teams. From overtime tax breaks to immigration compliance, family leave, telehealth, and even tip tax changes, leaders must stay ahead of these updates to keep their organizations compliant and competitive. 

Overtime Tax Break: A Win for Employees—and a Call to Action for Leaders  

The OBBBA introduces a new tax break on overtime pay, allowing employees to deduct up to $12,500 for single filers or $25,000 for joint filers during 2025–2028. This is a great morale booster for employees who regularly work extra hours. 

Call to Action? Ensure overtime policies are clear and enforced, approve overtime in advance so employees can benefit from the deduction, and use tools from The People Playbook to track and communicate expectations easily—reach out and let us help you get started! 

Expanded Family and Medical Leave 

The Act expands federal paid family and medical leave benefits and makes permanent the tax credit for employers who provide paid family leave to employees with at least six months of service and 20+ hours per week. The dependent care FSA contribution limit has also increased, helping employees better manage family care costs. 

Call to Action? Support updating leave policies, clearly communicate these benefits to teams, and view these changes as an opportunity to strengthen retention and engagement! 

Immigration Compliance and Increased Enforcement 

With significant funding now directed to immigration enforcement, leaders should expect more audits from agencies like ICE. 

Call to Action? Support regular I-9 audits to ensure compliance, provide managers with training to identify documentation issues early, and approach compliance as a core leadership responsibility!  

Telehealth Flexibility for Health Plans 

Employers offering High Deductible Health Plans (HDHPs) can now provide telehealth services before the deductible is met, starting in 2025. 

Call to Action? Leaders should explore adding telehealth to their benefits package and encourage managers to educate employees on how to access and use these services effectively, ensuring that the new benefit is both understood and utilized. 

Tip Tax Changes 

One major new provision affects employers in hospitality and other tipped industries: the Act simplifies how tips are reported and increases enforcement for employers who fail to properly withhold and remit tip-related taxes. 

Call to Action? Leaders should work closely with payroll providers to ensure tips are tracked accurately, provide training for managers on the new compliance requirements to avoid costly penalties, and use this as an opportunity to reinforce transparency around pay, building trust with employees while staying compliant. 

Leading Through Change

These changes aren’t just an HR checklist—they require strong leadership. By staying proactive, you can ensure compliance, strengthen your culture, and stay ahead. Need help getting started? The People Playbook & The Academy have the tools and support you need—we’ll handle the heavy lifting so you can focus on leading with confidence.