Why It Matters in 2025

• The Department of Labor's new rule on worker classification, effective March 2024, narrowed the criteria for defining independent contractors.

• Many states, including California and New Jersey, enforce stricter ABC tests, expanding employer liability.

• Regulatory agencies are coordinating enforcement efforts across tax, labor, and unemployment divisions.

Common Compliance Risks

• Misclassification – Treating a worker as a contractor when they meet the definition of an employee under wage-and-hour law.

• Lack of Written Agreements – Not having signed, up-to-date contracts outlining scope, deliverables, and autonomy.

• Control Issues – Dictating how, when, or where a contractor performs work.

• Ongoing Work Without Review – Letting contractor roles continue indefinitely without reassessing classification.

How to Stay Compliant

• Conduct a Classification Audit – Review all 1099 roles against DOL’s economic realities test and applicable state laws.

• Standardize Contractor Agreements – Ensure contracts define project-based scope, independence, and payment terms.

• Train Managers – Educate hiring managers on what they can and cannot direct when working with 1099 workers.

• Document Everything – Maintain clear records showing how the relationship meets contractor standards.

Need Support?

Up HR Consulting provides affordable audits, contract templates, and training to help small businesses stay compliant. Contact us today to learn how we can support your HR needs.

Improved Employee Retention with Student Loan Repayment Assistance

Student loan debt is one of the biggest sources of financial stress for employees today. Offering retirement matching for student loan payments helps companies improve employee retention by easing financial burdens. Employers like Fidelity have reported a 78% reduction in turnover among employees who benefit from student loan repayment programs. By adopting this benefit, businesses can increase employee loyalty and reduce the high costs associated with recruitment and turnover.

Cost-Effective Financial Support for Employees

Although adding retirement matching for student loan payments may seem costly, it’s a cost-effective solution when considering the long-term savings on recruitment and turnover. By helping employees pay down their student debt while continuing to contribute to their retirement savings, employers support financial wellness without incurring significant additional costs. This benefit reduces the chances of employee dissatisfaction, which can otherwise lead to costly turnover.

Scalable Benefits for Any Business Size

The flexibility of the SECURE 2.0 Act allows businesses of all sizes to implement student loan retirement matching programs. While larger companies may have the infrastructure to launch these benefits, smaller businesses can work with benefits providers to create affordable and scalable programs that align with their needs. This means that businesses with fewer resources can still offer a competitive benefit to attract and retain top talent.

Attracting and Retaining Top Talent with Student Loan Benefits

In today’s competitive job market, unique employee benefits can be a major differentiator for businesses. Student loan retirement matching is an appealing benefit, especially for younger employees who are burdened by student debt. Offering this benefit can help businesses attract top talent, stand out from competitors, and retain employees in a challenging job market.

Reducing Financial Stress and Increasing Productivity

with student loans often experience anxiety that negatively impacts their work. By offering student loan repayment assistance, businesses help reduce this financial stress, improving employee focus, engagement, and overall productivity.

Conclusion: The Future of Employee Benefits

Student loan retirement matching presents an opportunity for businesses to support employees’ financial wellness while improving retention, attracting talent, and increasing productivity. Though adoption may require overcoming some initial administrative hurdles, the benefits—both for employees and employers—are clear. This forward-thinking benefit is an investment in the future success of any organization. 

Lower Overhead Costs

Hiring an HR consultant significantly reduces overhead costs. Unlike full-time HR staff, who require salaries, benefits, and training, HR consultants work on a contractual basis.  This arrangement allows businesses to pay only for the specific services they need, helping to control expenses and eliminating the need for a full-time HR salary and benefits package.

Access to Expertise Without Full-Time Costs

HR consultants provide specialized expertise without the expense of a full-time commitment.  Small businesses can tap into a wide range of HR services, including compliance, recruitment, employee relations, and benefits management, without hiring multiple experts.  This allows businesses to access high-level HR knowledge as needed, optimizing costs.

Scalable and Flexible HR Solutions

Small businesses often face fluctuating HR demands as they grow.  HR consultants offer the flexibility to scale services according to the company’s current needs, allowing businesses to adjust without the financial burden of maintaining a full-time HR team.  This scalability ensures that HR support aligns with business cycles.

Minimized Risk and Compliance Costs

HR consultants help small businesses stay compliant with employment laws, reducing the risk of legal issues and penalties.  Their expertise in labor laws and best practices helps prevent costly mistakes and litigation, ultimately saving businesses money on compliance and risk management.

Focus on Core Business Activities

Outsourcing HR functions allows small business owners and managers to concentrate on core business activities and strategic goals.  By delegating HR administrative tasks to experts, businesses can operate more efficiently and focus on profitability and growth, enhancing overall business performance.

Conclusion

Hiring an HR consultant offers significant financial advantages for small businesses.  By lowering overhead costs, providing expert services without a full-time commitment, offering flexibility, reducing compliance risks, and allowing a focus on core business activities, HR consultants provide a cost-effective alternative to maintaining an in-house HR department.  As small businesses grow, partnering with an HR consultant can be a strategic investment that supports both financial savings and operational success.

Discover How Up HR Consulting, LLC Can Help Your Small Business

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HR consulting can benefit your small business.