Illinois Department of Employment Security (IDES)
Beginning July 1, 2026, employer contributions to employees’ 401(k) plans were no longer treated as wages when reporting to the Illinois Department of Employment Security, and should be excluded from wage reports. Employee contributions will continue to be considered wages and must still be reported.
Employer contributions made prior to July 1, 2026 will still be reported as wages under the previous rules for the 2026 tax year. This change applies only to employer contributions to 401(k) plans and aligns with how the Internal Revenue Service currently treats these contributions.
How will this affect you?
Employer 401(k) contributions AFTER July 1, 2026 will NOT count as wages for IDES
Employee 401(k) contributions WILL still count as wages and must be reported.
This may result in lower reportable wages and employer tax responsibilities.
Misclassification during the transition period may lead to IDES audits. So check with your payroll process service or accountant to be sure you will be able to take advantage of the changes without negatively impacting your business.
Explanation of the Fair Labor Standards Act (FLSA):
Requirements for at work Sleep Time & On-Call Time
When you have a business that requires overnight or weekend shifts, or you need to have someone on call for an emergency service request, you want to make sure that you are paying your employees fairly and in accordance with the law. The Fair Labor Standards Act (FLSA) provides guidance for these issues.
Please click here or on the button below to read the full story and find out what you will need to know regarding on-duty Sleep Time & On-Call Time.