The BULL

Table of Contents

• Independent Contractor Rules Are Changing

• Coming Soon: A Higher 1099 Reporting Threshold

• Meet the new HPI - Highly Paid Individual

• AI Glasses are entering the Office (And Yes, That’ …

• Your Resume Screener Could Be Your Next Lawsuit.

Independent Contractor Rules Are Changing

The U.S. Department of Labor has proposed a new rule to zero in on two big questions: Who controls the work, and who’s actually taking on entrepreneurial risk? If your worker truly runs their own business: they set their schedule, negotiate their rates, work with multiple clients, and can say “no” without fear, you’re likely in contractor territory. If they’re integral to your operations and function like a long-term team member with a different title… well, that’s where plaintiffs’ attorneys start shopping for new boats.

The proposal reviews how long the relationship will last, how essential their work is to your core business, and the degree of skill the role requires. Calling someone a contractor doesn’t magically make them one. So, before you “classify” your agreements, make sure you document the relationship properly. Because misclassification may boost margins in the short term, but litigation has a funny way of reallocating those funds. If you’re uncertain, we’ve created a test that will help you determine their classification. Please email [email protected] to learn more.

Coming Soon: A Higher 1099 Reporting Threshold

Heads up for your future paperwork plans: for payments made after December 31, 2025, the reporting trigger for Forms 1099-NEC and 1099-MISC is set to jump from $600 to $2,000. In plain terms, fewer small-dollar payments will require a form — which may slightly reduce your administrative to-do list.

That said, “fewer forms” does not mean “less oversight.” Businesses will still need to carefully track payments and issue 1099s for any qualifying compensation that meets the new $2,000 threshold. In other words, compliance isn’t going away — it’s just getting a new number.

Meet the new HPI - Highly Paid Individual

Employees age 50 or older who earn over $150,000 in 2025 FICA wages are now eligible for a special rule effective January 1, 2026. This update originates from the SECURE 2.0 Act.

What’s the change? HPIs must make catch-up contributions to a Roth (after-tax) account only, not pre-tax catch-ups.

What you’ll need to do: When completing your 2026 employee census, mark “Yes, HPI” for anyone who meets both the age and income criteria. Questions? We’re here.

AI Glasses are entering the Office (And Yes, That’s a Problem)

Those sleek “smart” glasses aren’t just for tech conferences anymore. Devices like Ray-Ban Meta smart glasses now offer real-time translation, visual recognition, and even built-in AI integrations. Impressive? Sure, but also legally complicated. The moment an employee wears AI-enabled eyewear at work, you’ve stepped into a maze of privacy laws, trade secret exposure, consent-to-record requirements, HIPAA concerns, and ADA accommodation issues. If meetings, clients, or patient interactions are recorded without proper safeguards, you’re collecting evidence for a potential lawsuit.

This is your cue to implement an actual policy. Decide now whether AI glasses are permitted, limited, or prohibited, and apply that decision consistently. Clarify where they can be used, under what circumstances, and the consequences for ignoring the rules. Because when a claim surfaces, the real question won’t be how cutting-edge the tech was. It will determine whether the employee was acting within the scope of their job and whether you set clear boundaries. The good news? It’s still early in the year, which makes this the perfect time to review and update your employee handbook. If you haven’t tackled that yet, consider this your friendly nudge before the tech (or the litigation) gets ahead of you.

Your Resume Screener Could Be Your Next Lawsuit.

Artificial intelligence may be streamlining your hiring process, but regulators have noticed. With shifting federal priorities, more aggressive state enforcement, and stricter global standards, automated screening and algorithm-driven recruiting tools are no longer operating quietly in the background. If your talent acquisition strategy relies on AI, you’re assuming compliance risk that requires active oversight.

That’s where Audax steps in. We build hiring frameworks designed to withstand scrutiny in today’s regulatory environment. We help employers use AI thoughtfully, so smarter hiring decisions don’t become legal headaches. Making hiring simple, strategic, and ensuring your hiring is intentional. If growth is on your agenda this year, let’s make sure your recruitment process works as a competitive advantage, not tomorrow’s compliance issue.

Modernization without guardrails is expensive. Classification decisions, contractor payments, wearable tech, and AI-assisted recruiting all require intentional policies, documentation, and oversight. The employers who treat compliance as a strategic priority will protect both their workforce and their bottom line. The landscape is evolving. The question is whether your policies are keeping up.