This year Congress will likely enact changes that will result in modifications of the tax law as well as other laws directly impacting small businesses. That’s why we recommend small-to-mid-sized businesses remain aware of regulatory issues that can affect them.
Below are a few in the pipeline to keep top-of-mind:
- Do you remember the Marketplace Fairness Act of 2013? Designed to create a level playing field between physical stores and on-line merchants, it was supposed to authorize states to collect sales tax on items their residents purchased over the Internet. Although the bill never made it through Congress, the tax revenue it promises to generate should assure it would be reintroduced this year
- President Obama signed the Tax Increase Prevention Act of 2014 into law on December 19, 2014. The law retroactively expanded roughly 50 tax breaks, also known as “tax extenders,” through December 31, 2014. The short-term extenders were beneficial to small businesses, particularly in areas such as the accelerated expensing of certain asset purchases and bonus depreciation in 2015. This adjustment in the tax law, along with budgetary constraints resulting in IRS layoffs, will likely cause complications in reviewing tax returns and delays in processing refunds.
- The present trend of passing legislation increasing the minimum wage continues to sweep across jurisdictions throughout the country. It is recommended that businesses remain informed on this subject and comply with minimum wage regulations to avoid costly penalties and sanctions.
- Obey Ban the Box laws. Ban the Box laws were passed by certain states, counties or cities around the nation to prohibit employers from rejecting a job applicant based solely on a criminal background check. Most applications feature a box that must be checked if the applicant has a criminal history…thus the term…ban the box… The goal of this law is to give an applicant the opportunity to engage in the interview process and demonstrate skills rather than be dismissed as a candidate because of a previous criminal issue. If the law is applicable in your state you must comply.
- There are a number of developments coming, or currently under consideration, which may impact small business owners who currently offer a retirement plan to their employees, or are thinking about offering one. The U.S. Treasury in 2015 will more broadly introduce its non-mandatory workplace savings program – myRA – which will allow employees to place deferred funds into a program that is similar to a Roth IRA. Additionally, 14 states have proposed legislation that would create workplace savings programs through employers not currently offering a retirement plan for their employees. Other proposed legislation would offer further incentives to small businesses to open retirement plans, provide for lifetime income information on plan statements, and require further disclosures around target-date funds included as plan investment options.
- In conjunction with the Fair Labor Standards Act, the Department of Labor is expected to initiate new strategies to modify and simplify current overtime protocols. The projected guidelines will likely increase the number of workers who qualify for overtime pay. This will be accomplished by:
- Raising minimum salary levels required for exempt status employees
- Expanding on the definition of responsibilities of so called administrative employees exempt from overtime pay
- As passage of this initiative is said to be imminent employers are advised to review how they determine whom they will classify as exempt employees according to job description, and salary levels. Employers should expect the probability of tracking and paying overtime rates where applicable.
Staying up-to-date with the ever-changing regulatory environment is imperative. Your Lawyer, Insurance Agent, CPA and even your Board of Directors are advisors. You are ultimately responsibly for “getting it right.” Think of it this way…the parties above (your advisors) most likely have malpractice insurance. Is there such a thing as business owners insurance?
Edward DuCoin ed@orpical.com 856.304.2800
