On Friday, September 19, 2025, during an Oval Office gathering, President Trump announced the creation of the long-promised “Gold Card” visa.  

At the same time, he and Secretary of Commerce Howard Lutnick unveiled a new, significant fee for H-1B visas, which took the business, policy, and media communities by surprise.  

President Trump signed a Proclamation imposing a $100K fee on H-1B visa petitions. Perhaps confused by the Proclamation’s vagueness, Secretary Lutnik announced this would be an annual fee for all H-1B visas. The Proclamation, as written, also suggested that visa holders outside the U.S. as of the effective date of 12:01 a.m. on September 21, 2025, would be denied reentry by Customs and Border Patrol (CBP). This news sent shockwaves around the world, with reports of H-1B workers scrambling to get back to the U.S.  

Since the Friday announcement, the extent and intent of the visa fee have undergone substantial evolution. It’s important to note that the Proclamation language has not been updated; instead, USCIS and CBP have issued FAQs and clarifications, while the press secretary engaged on social media.  

How is the $100K Visa Fee Proclamation interpreted as of Wednesday, September 24? 

Following the announcement confusion, the Administration, through USCIS and CBP, has since clarified that the Proclamation “only applies prospectively to petitions that have not yet been filed.” USCIS further stated that “the Proclamation 

• does not apply to aliens who: are the beneficiaries of petitions that were filed prior to the effective date of the proclamation, are the beneficiaries of currently approved petitions, or are in possession of validly issued H-1B non-immigrant visas.  

• does not impact the ability of any current visa holder to travel to or from the United States.” 

• institutes a one-time fee for “new” petitions. 

• requires the employer, not the worker, to pay the fee. 

As of September 21, at 12:01 a.m., the Department of Homeland Security will suspend adjudication of all H-1B petitions filed by employers until the fee is paid. The Department of State will not approve an employee’s H-1B visa applications until the fee is paid.  

Stakeholder groups are actively monitoring the filing of the first “new” petition that requires the fee, as well as instances where a beneficiary is stopped from entering the U.S. due to implementation confusion or because their employer has failed to pay the fee for a new petition. Given the inconsistencies and ambiguities in the Proclamation and the clarifying documents, immigration experts are divided on what constitutes a “new” petition, as they are concerned that a change of status or a change of employer petition may trigger the fee. TechServe will continue to follow and report developments. 

How can the President impose this fee through a Proclamation or Executive Order? 

Under the Immigration and Nationality Act (INA), visa fees are collected to cover costs and are adjusted through legislation by Congress or through rulemaking. The Proclamation instead relies on provisions in the INA, specifically Sections 212(f) and 215(a), that allow the president to restrict immigration; here, President Trump is implementing a $100,000 fee to accomplish this goal.  

The Proclamation cites several reasons for restricting non-immigration employment, substantially focusing on IT “outsourcing” companies, claiming their alleged abuse of the H-1B program creates a national security threat.  

• “The abuse of the H-1B program is also a national security threat.  Domestic law enforcement agencies have identified and investigated H-1B-reliant outsourcing companies for engaging in visa fraud, conspiracy to launder money, conspiracy under the Racketeer Influenced and Corrupt Organizations Act, and other illicit activities to encourage foreign workers to come to the United States.   

• Further, abuses of the H-1B program present a national security threat by discouraging Americans from pursuing careers in science and technology.  

• The severe harms that the large-scale abuse of this program has inflicted on our economic and national security demands an immediate response.” 

Unstated motivations may include revenue generation and perceived U.S. job creation; however, the unintended consequence could be projects and companies relocating offshore, potentially harming U.S. workers, businesses, and the U.S. economy. 

Does the Proclamation provide any exceptions? 

Yes, the text of the Proclamation includes language that could exempt an individual, company, or industry from the fee if the Secretary of Homeland Security, in her sole discretion, determines that the exemption would be in the national interest and does not pose a threat to U.S. security.  There is speculation that the Secretary may exempt medical professionals, particularly those serving rural areas.  

Will someone sue to overturn the Proclamation? 

Litigation is expected because it’s unclear whether the President has the authority to impose this fee, although lawsuits may not be filed immediately. New petitions from the FY 2026 lottery were filed months ago. Universities and non-profits, which are exempt from the visa cap, may be the first to trigger the fee if they have petitions that were not filed before September 21. Otherwise, the first fees may not be triggered until April, when companies start filing petitions on behalf of beneficiaries selected in the FY 2027 lottery.   

What else does the Proclamation do, and what else is on the horizon for the H-1B program? 

The Proclamation is one of several Administration initiatives regarding the H-1B visa program. The Proclamation calls for the Secretaries of DHS and Labor to initiate rulemaking to revise the H-1B lottery and wage levels, respectively, to prioritize the admission of “high-skilled and high-paid aliens.”  

On September 24, 2025, the DHS Notice of Proposed Rulemaking to change the H-1B lottery will be published in the Federal Register, initiating a 30-day window to submit comments. The proposed rule favors Level 4 wage level beneficiaries over entry-level workers. Our TechServe Team will carefully review the proposed rule and consult with our members, submitting comments as appropriate.  

In the next month or so, DOL is expected to publish a proposed rule to adjust the prevailing wage levels. The proposal may resemble the unimplemented 2020 Rule, which TechServe opposed.  

More immediately, comments on a proposed rule to limit the duration of status for students studying in the U.S. to a defined time and to rescind deference for visa renewal consideration are due on September 29, 2025. The duration of status limitation could negatively impact the talent pipeline.   

Finally, also on September 19, 2025, the DOL launched an aggressive H-1B visa enforcement program known as “Project Firewall.” The Secretary of Labor will, for the first time, personally certify the initiation of investigations. The Secretary said, “By rooting out fraud and abuse, the Department of Labor and our federal partners will ensure that highly skilled jobs go to Americans first.” TechServe will continue to monitor this initiative; Fragomen law firm provides an overview in this article. 

Next Steps on the H-1B $100K Fee Proclamation and Pending Regulations 

TechServe is interested in hearing how this new fee and other proposed regulations might impact your business. TechServe members previously received a survey to assess the impact of the fee on tech staffing companies. Please fill out that survey by Sept. 26. Your input will help us focus our legal/policy engagement and member guidance. If you have any other comments or if you are a member but have not received the survey, please email us at staff@techservealliance.org. We look forward to working with you. 

For a copy of the full TechServe Alliance Government Affairs H-1B news release, click here.

Resources and More Information 

Primary Sources: 

 Oval Office Announcement,  September 19, 2025. Video starts at 50:00 (shows evolution of application) 

Proclamation: Restriction on Entry of Certain Nonimmigrant Workers, September 19, 2025 

White House Fact Sheet, September 19, 2025  

Department of Labor Project Firewall Memo, September 19, 2025 

USCIS H-1B FAQ, September 20, 2025 

CBP Post on X, September 20, 2095 

USCIS H-1B FAQ, September 21, 2025 

News: 

NBC, “Trump’s New $100,000 Visa Fee Sets Off Panic and Confusion,” September 21, 2025 

CBS 24/7, “White House clarifies details on Trump’s new H-1B visa fee after confusion,” September 22, 2025 

Legal Articles: 

Mintz Law Firm, “USCIS and CBP Provide Updates to Trump Proclamation Which Purports to Require a $100,000 Fee for H-1B Workers Entering the United States,” September 22, 2025 

Fragomen, “United States: DOL Intensifies Enforcement of H-1B Wage,” September 23, 2025

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“August’s decline in IT and engineering employment reflects the broader cooling we are now seeing in the labor market,” said Mark Roberts, CEO of TechServe Alliance. “Persistent uncertainty about the economy, interest rates, public policy including tariffs as well as the changing skill set mix driven by the rise AI and automation, continue to restrain overall hiring activity. While new skill sets will continue to emerge, demand for IT professionals will likely remain subdued in the near term apart from those with specialized highly sought after skills around AI, automation and cybersecurity,” added Roberts.

For more details, download the pdf.

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“July’s data—along with downward revisions to May and June—highlight the persistent headwinds facing IT employment,” said Mark Roberts, CEO of TechServe Alliance. “While a few firms are seeing modest improvement following a lackluster 2024, the broader narrative remains unchanged: economic uncertainty, shifting public policy, and a rebalancing of skill set needs driven by AI and automation are tempering hiring activity. Until there is greater clarity on these fronts, we anticipate demand for IT professionals will remain subdued—except in areas tied to high-demand, emerging skill sets,” added Roberts.

For more details, download the pdf.

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“IT employment continues to reflect a market in a holding pattern—neither contracting significantly nor showing signs of sustained growth,” said Mark Roberts, CEO of TechServe Alliance. “While year-over-year change remains marginally positive after modest growth from May 2024 through February 2025, demand remains below 2024 levels and well off post-COVID highs. With companies still cautious about launching new initiatives, hiring remains concentrated in areas like AI, cloud, and cybersecurity. Until there is greater clarity around the broader economic and policy landscape, we anticipate this ‘running in place’ dynamic to continue.”

For more details, download PDF

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DHS/USICE appears to be reviving a widely opposed 2020 proposed rule that among other things, changed F, J, and I nonimmigrant visa approvals from duration of status to a set period, e.g., four years for a four-year degree. NAFSA: Association of International Educators estimates it takes on average 4.69 years for an international student to complete a four-year degree.

The 2020 Proposed Rule required these international students to apply for an extension to complete their studies, training, or employment. In 2020, DHS argued the end duration of status approvals were necessary for national security reasons. At the same time, DHS pointed out the benefits of international students to the economy, and the harm that could result if these students choose to attend schools and work in other countries.

The 2020 Proposed Rule, published in September 2020, was not finalized before the Trump Administration left office and the Biden Administration rescinded it in July 2021. TechServe Alliance’s Government Affairs Team will continue to monitor the status of this proposal and report on next steps. Please contact us with any questions or concerns.

For more information, including background on the 2020 proposal, please review these links:
Bloomberg, “DHS Revives 2020 Effort to Restrict Student and Exchange Visas,” June 30, 2025
NAFSA, “Trump-Vance Administration Proposal to Replace Duration of Status,” June 27, 2025

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“IT employment was effectively flat in May, posting only a small uptick on a year-over-year basis,” observed Mark Roberts, CEO of TechServe Alliance. ”IT staffing and solutions companies continue to report that their clients remain cautious in investing in new initiatives, resulting in uneven demand and elongated hiring cycles with only a handful of areas like AI, cloud, and cybersecurity continuing to show strength.  Until uncertainty around the economy and U.S. policy dissipates, we don’t anticipate a meaningful rebound in tech hiring.” 

Download PDF for Details

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TechServe Alliance is proud to announce a new high-impact member benefit: Business Optimization Analysis designed to help IT staffing firms improve operational effectiveness, reduce costs, and increase profitability.

This initiative is led by Sean Gilligan, TechServe Alliance’s first IT Staffing Executive-in-Residence. With extensive experience managing national and international IT staffing organizations, Sean brings hands-on expertise and strategic insight to member firms looking to sharpen their operational edge.

“In today’s competitive and unpredictable market, staffing firms can no longer rely on top-line growth alone,” said Sean Gilligan, IT Staffing Executive-in-Residence. “This initiative is about helping members uncover opportunities they may not see on their own—streamlining operations, improving margins, and building more resilient businesses.”

“We are thrilled to offer this exclusive opportunity to help our members identify actionable ways to improve performance and achieve sustainable growth,” added Mark Roberts, CEO of TechServe Alliance. “Operational excellence has become the difference-maker, and this program delivers exactly that.”

The Business Optimization Analysis includes:

• A brief survey to gather key firm metrics and goals
• A one-on-one consultation with Sean Gilligan to explore areas for improvement
• A follow-up session with tailored, actionable recommendations

According to the newly released 2025 TechServe Alliance Operating Practices Report, firms achieving higher profitability in a landscape of soft and uneven client demand did so primarily through operational efficiency and reduced SG&A costs. This new offering is designed to help members achieve those same results.

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In this newly created role, Sean will lead TechServe’s forthcoming Business Optimization Program for IT & Engineering Staffing and Solutions Firms. Through this initiative, he will work directly with owners and executives of member firms, delivering actionable recommendations to adjust strategic direction, streamline operations, and enhance profitability. 

“Sean’s deep industry expertise makes him an invaluable addition to the TechServe Alliance team,” said Mark Roberts, CEO of TechServe Alliance. “In today’s market, where many firms face flat or inconsistent client demand, Sean’s insights will help leaders improve operational effectiveness and efficiency. This aligns perfectly with TechServe’s mission of advancing the success of industry firms. We’re thrilled to have him on board.” 

Sean’s career includes senior leadership roles at several top firms including as President of Technology Recruitment – North America at Harvey Nash, Inc., where he was instrumental in driving U.S. expansion and as well as Regional Vice President, Sales & Operations at Signature Consultants (now Dexian). 

“I’ve been part of TechServe Alliance for years and have seen firsthand how it supports IT & Engineering staffing firms,” said Sean. “I’m excited to step into this role and collaborate with owners and executives to optimize operations, tackle key challenges, and uncover new opportunities.” 

A respected leader in the industry, Sean served on the TechServe Alliance National Board for five years and was named to Staffing Industry Analysts’ Top Millennials in Staffing list. 

About TechServe Alliance  

TechServe Alliance is the national trade association of the IT & Engineering staffing and solutions industry. IT & Engineering staffing and solutions firms and affiliated professionals count on TechServe Alliance to keep their leadership informed, engaged, and connected. By tapping the “collective scale” of its companies, TechServe provides access to industry best practices and insights as well as innovative products and services supporting its stakeholders in the efficient delivery of best-in-class IT & Engineering staffing and solutions for clients and exceptional professional opportunities for every consultant. 

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A few key highlights from the report include:

• Profitability was Under Pressure for All Firms: In an environment characterized by anemic client demand and eroding gross margins, profitability was under pressure for firms in all categories.  After hitting a high 6.3% of revenue in 2021, bottom-line profitability declined for the median firm to only 2.5%. The deterioration was evident even among the most profitable companies with the median firm in the top quartile dropping from above 11% in 2020 through 2022, to only 5.2%—the lowest in at least a decade.
• Firms With More Direct Hire Business Fared Better, While Those with Focus on VMS/MSPs Struggled: Where direct hire was a larger percentage of a firm’s overall revenue it was generally more profitable. Firms with over 50% of their revenue attributable to VMS/MSPs struggled— barely profitable at 1.4%.
• Operational Effectiveness was One of the Only Levers Available: Given these challenging conditions, higher levels of profitability was almost exclusively attributable to operational efficiency and effectiveness reflected as lower SG&A costs as a percentage of revenue.
• Managing Every Expense Line Matters: Higher profitability was not the result of cutting one major cost, but rather the cumulative impact of reducing expenses across many categories. For example, compared to the high-profit firm, the typical firm spent three times more on LinkedIn, two and a half times more on business insurance, twice as much on their internal IT, and 50% more on accounting.

“While revenues stabilized in 2024 after declining to a median of 8.3% in 2023, margins and bottom-line profitability remain under extreme pressure for almost all firms.  Across the board, profitability was down markedly for most IT & Engineering staffing firms,” commented Mark Roberts, CEO of TechServe Alliance.

“As we have seen in prior periods where client demand is anemic, lower SG&A expenses as a percentage of revenue was the primary determinant of whether a firm achieved ‘High Profit’ status. While larger firms have an advantage on this front as they can spread their back office and other internal costs over more revenue—benefiting from the economies of scale, astutely managing each expense line is also critical” observed Roberts.

As the only annual benchmarking analysis exclusively focused on the IT & engineering staffing industry, this comprehensive benchmarking report covers a wide range of metrics including data points on operating in the remote and hybrid work models.

• Revenue
• Gross Margin & Profitability
• Impact of Direct Client Relationship, VMS/MSP with Hiring Manager Contact, and VMS/MSP Without Hiring Manager Contact on Close Rates, Margins and Profitability
• SG&A Expenses—what areas of expense control help drive higher profitability
• Compensation and Metrics for Sales & Recruiters at Different Levels of Experience
• Benefits for Internal Staff, Hourly and Salaried Consultants
• Industry Trends
• And much more!

Learn more about the 2025 Operating Practices Report here. A Sales & Recruiter Metrics Report will be released in the future.

About TechServe Alliance

TechServe Alliance is the national trade association of the IT & Engineering staffing and solutions industry. IT & Engineering staffing and solutions firms and affiliated professionals count on TechServe Alliance to keep their leadership informed, engaged, and connected. By tapping the “collective scale” of its companies, TechServe provides access to industry best practices and insights as well as innovative products and services supporting its stakeholders in the efficient delivery of best-in-class IT & Engineering staffing and solutions for clients and exceptional professional opportunities for every consultant.

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“Despite small ticks down in March and April, IT employment has nevertheless stayed in a narrow range the last 10 months. While the dramatic shift in economic policy has certainly slowed decision-making and, in some cases, caused projects to be paused, we don’t yet see the direct impact of those changes in the employment data,” observed Mark Roberts, CEO of TechServe Alliance. “While there continues to be strong demand for talent in areas such as AI integration, cloud infrastructure, cybersecurity, and data analytics, a broader recovery will be dependent on the overhang of uncertainty dissipating among other factors.  The robustness of any eventual rebound is also likely to be unevenly distributed across industries and geographies,” added Roberts.

For details, please download the PDF.

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Powered by AI, Ceipal’s software enables staffing, recruiting, and talent professionals to work more efficiently by simplifying the process of finding, hiring, and managing talent.    

“Ceipal’s continued support as a Gold Sponsor underscores their deep commitment to the IT & engineering staffing industry,” said Mark Roberts, CEO of TechServe Alliance. “Their continual innovation as a leading ATS along with other AI-powered capabilities, empowers industry firms to successfully compete in today’s dynamic market. We are proud to have them as a partner again in 2025.” 

“TechServe Alliance plays a vital role in advancing our industry and fostering meaningful connections,” said Andy Weiss, Chief Marketing Officer of Ceipal. “We’re honored to continue our Gold Sponsorship for the fourth year in a row and look forward to engaging with industry leaders at the Executive Summit as we explore the future of staffing together.” 

The TechServe Alliance Executive Summit brings together executives and thought leaders from across the staffing and solutions ecosystem for strategic insights, networking, and collaboration. Held in conjunction with the Society for Information Management (SIM)’s executive leadership conference – SIM TechExec 2025 attendees include CIOs, CTOs, and other technology leaders along with IT Procurement Professionals from some of the largest U.S. companies. Ceipal’s ongoing support helps make this invaluable gathering possible.  

Ceipal provides AI-powered staffing software that helps staffing, recruiting, and talent professionals work more efficiently while keeping people at the center of their work. With its advanced technology, Ceipal simplifies the process of finding, hiring, and managing talent, enabling teams to focus on making meaningful connections. Headquartered in Rochester, New York, with research and development in Hyderabad, India, Ceipal is founder-led and has over 500 employees worldwide. For more information, visit www.ceipal.com or follow Ceipal on LinkedIn. 

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“While the overall job market posted an unexpectedly strong gain in March, IT employment remained essentially flat—a reflection of ongoing uncertainty and caution among business leaders,” said Mark Roberts, CEO of TechServe Alliance. “While still relatively strong, IT unemployment rate rose to 3.5% in the first quarter. This is consistent with what we’re hearing from our members: with increased levels of uncertainty, client demand is “choppy” and can vary considerably across industries, geographic regions, and individual companies. While some firms are seeing positive momentum, others are facing elongated hiring cycles and less robust demand.” 

“We’re closely watching how the reduction in federal jobs and the uncertainty surrounding tariffs may influence the broader economy and IT employment in the months ahead,” Roberts added. 

For details, please download the PDF.

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Julie Dunne, who founded eMerging in 2013, has long been an active member of TechServe Alliance and a long-time facilitator of TechServe’s Executive Roundtables. She first engaged with M&A Marketplace a couple of years ago during TechServe’s annual Executive Summit. 

“Through TechServe’s M&A Marketplace, I was introduced to valuation insights and industry best practices that helped me position the company for a stronger valuation when the time was right,” Dunne said. 

“I leaned a lot on Steve Norris on the TechServe team for his expertise. He’d been through the sale of his company before, which was helpful as he could draw parallels for me from his experience,” Dunne added. “Steve and the TechServe team provided invaluable expertise, guiding me through every step of the process and ensuring I had the right resources at my disposal. Having access to an industry-specific advisor made all the difference in navigating this complex process.”

With the help of TechServe, Dunne explored multiple potential buyers, receiving multiple LOIs, but found a natural cultural fit with MMI. Dunne will remain with MMI, leading the sales team in Omaha while expanding market opportunities. “This transition allows me to return to my true passion—sales—while providing new opportunities for my entire team under MMI’s broader capabilities. It’s an exciting next chapter.”

Steve Norris, Consultant at TechServe M&A Marketplace, added, “Julie was highly engaged and committed to positioning eMerging for success. She took the right steps to strengthen the company and make it an attractive acquisition. We are thrilled that she found a great fit with Mitchell Martin and that her team will have continued opportunities for growth.”

To learn more about how the TechServe Alliance M&A Marketplace’s innovative model provides owners unique opportunities for a successful exit and helps buyers fast-track growth through acquisitions, please indicate your interest here to schedule a call or reach out to John Larson at larson@techservealliance.org and Steve Norris at Norris@techservealliance.org.

About M&A Marketplace

The M&A Marketplace facilitates the buying and selling of IT & Engineering Staffing and Firms. Services are delivered through TechServe Alliance Advisory Services LLC, a wholly owned a wholly owned subsidiary of TechServe Alliance, the national trade association of IT and engineering staffing and solutions firms.

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“The slight uptick in IT employment for February reflects a continuation of the modest upward trend that began last month. The improvement in IT employment—albeit modest—is a welcome development particularly amid broader economic uncertainty,” said Mark Roberts, CEO of TechServe Alliance. 

“While February’s IT employment numbers do not reflect the impact of shifting public policy and federal job cuts, we are hopeful that uncertainty that has chilled business decision-making will dissipate. We will continue to monitor developments likely to determine if IT job growth continues or stalls in the coming months.” 

For more information, please download the PDF

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“While IT employment was anemic throughout much of 2024, January’s month-over-month uptick is cause for cautious optimism. I’ll be watching the IT employment data released in March and April to see whether these numbers reflect a solid, longer-term trend or are merely an aberration,” said Mark Roberts, CEO of TechServe Alliance. 

“Some of the improvement in prior months reflects the Bureau of Labor Statistics’ annual revisions, which adjusted the indices,” Roberts added. “Nonetheless, I’m encouraged to see that this month’s IT employment index aligns with what our member companies are telling us: that the environment for IT services appears to be improving.” 

For more details, download pdf

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If your company is based in or does business in one of the following states, this IRS Revenue Ruling may impact you. Currently, these 13 states plus the District of Columbia have State PFML programs: California, Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, and Washington. State legislatures are in session, and additional states could adopt these plans.

The ruling is effective for payments made on or after Jan. 1, 2025, but transitional relief applies for payments during 2025. Currently, 13 states and the District of Columbia have enacted mandatory PFML programs. The ruling does not address state PFML programs that are voluntary.

Highlights

• IRS Revenue Ruling 2025-4 addresses contributions and payments under mandatory state PFML programs.
• Generally, employers and employees may deduct their required PFML contributions.
• Different rules apply depending on whether benefit payments are included as employee income.
• Transitional relief applies to payments in 2025.

Important Dates

Jan. 15, 2025

IRS issued Revenue Ruling 2025-4, addressing the federal tax treatment of contributions and payments under mandatory state PFML programs. Certain transitional relief applies during calendar year 2025.

April 15, 2025

IRS deadline for comments on additional PFML issues.

Action Steps

Employers should study the revenue ruling so they are prepared to comply with federal tax requirements for PFML contributions and payments. In particular, employers should act to ensure that their payroll and W-2 form practices meet the withholding and reporting requirements detailed in the guidance.

The IRS is soliciting comments on additional situations and aspects of state PFML that are not covered in the revenue ruling. Employers may submit their written comments by April 15, 2025.

Effective Dates

The revenue ruling states that it is effective for payments made on or after Jan. 1, 2025; however, the ruling provides the transition relief detailed below for payments made during calendar year 2025:

• Medical leave benefit payments made in 2025 attributable to an employer’s contribution—States and employers are not required to follow the income tax withholding and reporting requirements applicable to third-party sick pay. Neither the state nor the employer will be liable for any associated penalties under Code § 6721 for failure to file a correct information return or under § 6722 for failure to furnish a correct payee statement to the payee.
• Medical leave benefit payments made in 2025 attributable to an employer’s contribution—States and employers are not required to comply with § 32.1 and related Code sections (as well as similar requirements under § 3306) during the calendar year or to withhold and pay associated taxes; consequently, associated penalties will not apply.
• Employer pick-up payments made during calendar year 2025—Employers are not required to treat amounts they voluntarily pay for any part of an employee’s required PFML contribution as wages for federal employment tax purposes under §§ 3121(a), 3306(b) and 3401(a).

Comments Requested

The IRS is soliciting comments on additional situations and aspects of state PFML programs that are not covered in Revenue Ruling 2025-4. The comments may be submitted electronically via the federal e-rulemaking portal at https://www.regulations.gov. Comments may also be submitted by mail to the following address: Internal Revenue Service, CC:PA:LPD:PR (Revenue Ruling 2025-4 PDF), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, D.C., 20044. Comments should be submitted in writing on or before April 15, 2025.

To learn more about this topic, download this pdf.

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“While IT employment remained anemic throughout 2024, there are “green shoots” warranting increased optimism for 2025.  Despite the softer numbers in IT, the sector’s Q4 unemployment rate of 2.7% highlights the underlying demand for skilled technology professionals,” observed Mark Roberts, CEO of TechServe Alliance  

Further, with the election over and much of the near-term economic uncertainty dissipated, we are hearing from industry firms that many IT projects that were sidelined are expected to come back online.  The critical need to incorporate AI and protect against cyber threats will continue to accelerate demand for professionals in those skill sets for the foreseeable future,” added Roberts.

For more details, please download the pdf.

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Our Government Affairs Team is focused on several provisions that TechServe had previously submitted official comments including—the definition of Specialty Occupation, Third-Party Placement requirements, and the Bona Fide Job Offer provision.  In a number of instances, the rule appears to codify and clarify existing policy. 

After completing our review and analysis of the 460-page document, we will share additional insights on the potential implications for IT staffing firms.

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“The overall U.S. job market posted strong gains in November, but IT employment remained effectively flat. Throughout the year, technology leaders delayed hiring decisions due to economic, political, and geopolitical uncertainties. This has had significant implications for IT investments and associated hiring” said Mark Roberts, CEO of TechServe Alliance.  

“While IT hiring overall has not yet accelerated, critical IT domains such as AI and Machine Learning, as well as Security and Cybersecurity continue to remain strong. With the U.S. graduating just over 100,000 computer science graduates annually and anticipating downward pressure on high-skilled immigration in the coming years, there will be a long-term shortage of talent as the growth rate for computer and mathematical occupations is projected to be more than twice the national average for all occupations over the next 10 years. Consequently, we believe that despite the moderating labor pressure on employers in the short term, long-term demand for IT skills will continue to outpace supply.”

For more details, please download the pdf

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“Consistent with the marked drop in employment growth in the broader jobs market, the October IT jobs numbers reflect weakness as we move into late 2024. We also see this trend in IT unemployment which is now at 4%—effectively in parity with the overall unemployment rate of 4.1%.  Historically IT unemployment has been much lower than the broader jobs market,” said Mark Roberts, CEO of TechServe Alliance.  

“What remains to be seen is if this trend continues as we move into 2025.  With two major storms impacting the Southeast and the Boeing strike, the decline may be a single month’s aberration rather than an enduring trend. Long-term, we know there will be a shortage of highly skilled IT professionals to meet the demands of U.S. businesses, particularly in the areas of cloud, cybersecurity, and AI,” Roberts added. 

For more details, please download the PDF

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Background

The SOL’s mission is to meet the DOL’s legal service demands to help achieve the agency’s mission. In recent years, the SOL has prioritized combating coercive contractual provisions; this has included filing lawsuits and amicus briefs to fight these unlawful business practices and advance its enforcement priorities.

Key Highlights

The special report highlights the following seven employment-related contractual provisions the SOL is targeting:

1. Contractual provisions requiring workers to waive statutory protections;
2. Contractual provisions that purport to require employees to agree that they are independent contractors;
3. Indemnification-type provisions and related counterclaims purporting to shift liability for legal violations to workers or other entities;
4. “Loser pays” provisions attempting to require employees to pay the employer’s attorney fees and costs if the employees do not prevail in litigation or arbitration;
5. “Stay-or-pay” provisions, including some training repayment assistance provisions, that purport to require workers to pay damages to their employer for leaving a contract early;
6. Confidentiality, nondisclosure and nondisparagement provisions; and
7. Company policies that purport to require workers to report safety concerns to their employer before contacting any government agencies.

The special enforcement report addresses each of these provisions, including the issues raised by each type of provision, the worker protections implicated and the work the SOL has recently done to combat the unlawful use of the provisions. The report stresses that the DOL is not bound by contracts between workers and their employers, and as a result, the agency can advocate on behalf of workers in fighting coercive fine-print provisions.

Employer Action Steps

This report is a helpful resource for employers, as it indicates the SOL’s current enforcement priorities. Employers should expect the DOL and SOL to continue to focus on targeting fine-print provisions in employment contracts in 2025. Organizations can respond by reviewing their workplace agreements to address any fine-print provisions and mitigate potential risks.

Highlights

• On Oct. 15, 2024, the SOL released a special enforcement report revealing seven coercive fine-print provisions the DOL and the office intend to target.
• These provisions include requiring workers to waive statutory protections; incorrectly classifying workers as independent contractors; shifting legal liability to workers; requiring losing parties to pay attorney fees; including stay-or-pay, confidentiality, nondisclosure and nondisparagement provisions; and forcing workers to report safety concerns internally before going to the government.
• Employers should review their employment agreements to address any fine-print provisions.

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Background

On May 7, 2024, the FTC published a final rule prohibiting employers from entering into or enforcing noncompete clauses with most employees. Subject to limited exceptions, the final rule provided that:

• The use of noncompete clauses would be banned as of the effective date;
• Any existing noncompete clauses (other than those entered into with senior executives) would be invalidated; and
• Employers would have to notify all employees (other than senior executives whose existing noncompete agreements would remain enforceable) that their existing noncompete agreements would not be

State and local legislatures and courts continue to determine the enforceability of noncompete clauses. The FTC rule would have governed the enforceability of noncompete clauses at the federal level and superseded any less restrictive state laws or judicial interpretations.

Court Cases

In Ryan, the plaintiffs argued that the noncompete ban should be vacated because it exceeds the FTC’s statutory authority, is unconstitutional, and is the product of arbitrary and capricious decision-making. In a preliminary holding on July 3, 2024, the U.S. District Court for the Northern District of Texas partially blocked the ban, but only for plaintiffs (not nationwide), while it considered the merits of the case. On Aug. 20, 2024, the court in Ryan issued a final ruling in Ryan agreeing with the plaintiffs’ arguments and holding that “the FTC lacks statutory authority to promulgate” the noncompete ban and the ban “is arbitrary and capricious.” Under the court’s ruling, the noncompete ban is permanently blocked for all employers.

Impact on TechServe Members

The Texas court’s ruling blocking the FTC’s noncompete ban remains in effect during the 5th Circuit appeals process. Consequently, employers who use non-competes do not need to take immediate steps to change company practices to comply with the FTC rule; state and local laws continue to apply.

TechServe members generally do not use non-competes but instead use other restrictive covenants to protect proprietary information and prevent solicitation of the former employers’ clients or the recruitment of the former employer’s workers. Employers should continue to ensure they are using best practices in these areas, as discussed in TechServe’s recent webinar. TechServe will continue to monitor the Ryan litigation and keep members informed of any developments.

Highlights

• On May 7, 2024, the FTC issued a final rule that would ban virtually all noncompetes effective 4, 2024.
• On July 3, 2024, the U.S. District Court for the Northern District of Texas put the FTC noncompete ban on hold, but only for the plaintiffs.
• On 20, 2024, the District Court blocked the FTC’s noncompete ban for all employers.
• On 18, 2024, the FTC appealed the District Court’s order blocking the noncompete ban to the U.S. Court of Appeals for the 5th Circuit.
• Another Federal Court in Pennsylvania sided with the FTC; pending the outcome of the Texas case, the matter may ultimately be decided by the Supreme Court.

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