Workspan Daily News Bytes for Aug. 15, 2025

EBSA Pulls 2021 Advisement Against Alternative Assets in 401(k) Plans

The U.S. Department of Labor’s Employee Benefits Security Administration (EBSA) on Tuesday, Aug. 12, rescinded a Dec. 21, 2021, supplemental statement that discouraged fiduciaries from considering alternative assets in 401(k) retirement plan investment menus.

The announcement comes on the heels of President Donald Trump’s Aug. 7 executive order that mobilized his plan to allow alternative assets (e.g., private equity, cryptocurrencies, real estate) to be used within these accounts.

In its previous supplemental statement, EBSA had warned that most plan fiduciaries would be “not likely suited to evaluate the use of [private equity] investments in designated alternatives in individual account plans.”

In conjunction with the rescission, the federal agency advised employers and their fiduciaries to take a “neutral, principled-based approach” to fiduciary investment decisions, consistent with the requirements of Employee Retirement Income Security Act of 1974.

“When evaluating any particular investment type, a plan fiduciary’s decision should consider all relevant facts and circumstances and … necessarily be context specific,” it stated, adding that particular investments or investment strategies should not be singled out for increased or “special” scrutiny.

U.S. Comp Costs Rose 0.9% in Q2, 3.5% Over Past 12 Months

Compensation costs for American civilian workers increased 0.9%, seasonally adjusted, in the second quarter of 2025, according to a data report released July 31 by the U.S. Department of Labor’s Bureau of Labor Statistics (BLS). Wages and salaries rose 1.0% during that period and benefit costs were 0.7% higher. The BLS defines civilian workers as those employed either by private industry or state/local governments.

For the 12-month period ending June 30, 2025, compensation costs for civilian workers increased 3.6% (including 3.6% for wages and salaries, and 3.5% for benefits).

Examining private industry over the past 12 months:

Compensation costs rose 3.5% (3.5% for wages and salaries; 3.4% for benefits, including 5.8% for health benefits). Inflation-adjusted (constant-dollar) wages and salaries were up 0.8%.
By bargaining status, compensation costs for union workers increased 4.3% (4.6% for wages and salaries, 3.8% for benefits), and those for non-union workers rose 3.4% (3.5% for wages and salaries, 3.4% for benefits).

Examining state/local government over the past 12 months, compensation costs were up 4.0% (3.9% for wages and salaries, 4.1% for benefits).

New HSA Data Reflects Stress From Healthcare Costs

Research released July 30 by benefits platform Lively revealed the degree to which Americans are using their health savings accounts (HSAs) to cope with record-high healthcare prices. Data from the company’s seventh annual 2025 HSA Spend Report showed:

Withdrawals rose 13% in 2024, from $1,162 to $1,320, closely mirroring the national average of $1,370.
Hospital spending increased 5%, underscoring how HSAs are helping consumers manage rising care costs in real time.
The percentage of assets retained dropped to 20%, signaling consumers are increasingly tapping into their healthcare savings.

The company stated that, despite the power of HSAs, their full potential remains underutilized. According to the report: “This is not due to a lack of interest but rather to a systemic education gap. Many Americans are not taught how to use HSAs strategically. As a result, key advantages — especially tax-free investing — are often left on the table. This isn’t a shortfall of any single provider but a signal to the broader ecosystem: employers, brokers, HR leaders and platform partners must work together to close this gap. Education must be treated not as an afterthought, but as a core feature of the HSA offering.”

Study Points to Hybrid Work’s Potential for Productivity Gains

A recent research report from the International Workplace Group (IWG) and global engineering consultancy Arup showed organizations could boost productivity by 11% over the next five years by empowering their employees to use local workspaces and offices as part of their hybrid working approach.

The study by IWG, a provider of workspace solutions, drew upon research from:

The National Bureau of Economic Research, which looked at how much of time saved from commuting is reallocated to work;
The Economist Impact, which studied time lost to distractions when working from a corporate headquarters in the U.S.; and,
Professor Nicholas Broom at Stanford University, which highlighted that hybrid work boosted productivity by 3% to 4%.

The 11% productivity boost is driven by lower commutes, with employees benefiting from increased focus time and fewer distractions, ultimately spending up to 40% of time saved from traveling on additional work. The rate of surveyed employees reporting their productivity levels as “excellent” in flexible, non-headquarters workspaces was 67% higher than those working from home.

According to IWG, workers that spend half their time in local flexible workspaces or offices could annually unlock 170 extra productive hours.

Job Candidates Are Suspicious About Employers’ AI Usage

A new report by research and consulting firm Gartner showed just 26% of job candidates trust that artificial intelligence (AI) will fairly evaluate them, even though 52% of candidates believe AI screens their application information.

A survey of 2,918 job candidates during the first quarter of 2025 found 32% were concerned about AI potentially failing their applications, and 25% said they trust employers less if they are using these technologies to evaluate their information. Furthermore, only half of candidates trusted that the jobs they were applying for were legitimate.

While candidates expressed concern about employer AI usage, they are leveraging it in their own applications. A separate Gartner survey of 3,290 job candidates found 39% of candidates said they used AI during the application process. Those who did used it to generate text for:

A résumé (54%)
A cover letter (50%)
A writing sample (36%)
Answers to assessment questions (29%)

Uncertainty surrounding AI could make candidates even more selective when it comes to the job application process. According to Gartner research, 51% of candidates accepted a job offer in their most recent application process (second quarter of 2025), a substantial decline from the second quarter of 2023, when 74% of candidates accepted their most recent offer.

Illinois Requires Employers to Provide Paid Lactation Breaks

Illinois Gov. J.B. Pritzer on Aug. 1 signed Senate Bill 212, which amends the state’s Nursing Mothers in the Workplace Act.

The law change, effective Jan. 1, 2026, requires employers to compensate mothers who take breaks at work to pump breast milk for up to a year after their child is born. It expands on the federal Fair Labor Standards Act (FLSA), which requires all U.S. employers to provide reasonable break time for an employee to express breast milk for her nursing child for one year after the child’s birth each time such employee has need to express the milk. Employees are entitled to a place to pump at work, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public.

“Without workplace accommodations that consider the time required to breastfeed a newborn or infant, the burden of balancing work responsibilities and personal responsibilities becomes increasingly challenging,” said Illinois state Sen. Laura Fine, the bill’s sponsor. “We are not only encouraging a supportive work environment for these employees, we are also empowering Illinois mothers who must work to support their families.”

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