9 Regulatory Changes That Could Affect Your Business This Year
With another year, comes another set of laws and regulatory issues that businesses need to be aware of.
In 2016, many issues affecting the regulatory landscape revolve around employee pay. Changes to overtime rules and paid sick leave, as well as increased minimum wages are all issues businesses need to stay on top of this year.
Business owners have been inundated with proposed regulations that will affect how they pay employees in 2016.
To help businesses deal with these changes, Premier Business Lending has identified nine regulatory issues that should be on small businesses’ radar in 2016:
1) Overtime regulations: In 2015, the U.S. Department of Labor proposed new salary thresholds for white-collar workers. The proposal would raise the salary threshold from $455 a week to about $970 a week in 2016.
After hearing input from the public on the proposed increases, the agency is expected to release its final ruling this spring. Employers will need to be prepared to take immediate action in order to comply when that ruling is unveiled.
2) Employee pay: Employers throughout the country will be adapting to minimum wage increases, as well as new laws on equal pay and paid sick time in 2016. Specifically, there is a new industry-specific minimum wage increase for fast food workers in New York.
The country’s most stringent equal pay laws went into effect Jan. 1 in California. These new laws require that men and women holding the same positions be paid equally. Also this year, Oregon becomes just the fourth state in the country to require paid sick leave for employees. The new statewide law requires employers with at least 10 workers to provide up to five paid sick days a year.
3) Worker classification: New guidelines from the Department of Labor expand the definition of what an employee is in order to ensure employers aren’t designating some of their workers as independent contractors to save overtime and benefit costs.
Based on these new guidelines, employers should examine their third-party relationships and monitor state and federal agency developments to assist in the efforts to appropriately classify workers.
4) Privacy: Many states have either recently enacted or are considering a wide array of stricter privacy and security laws. These include new minimum levels of encryption and security controls, and stricter notification processes and remediation steps when data breaches do occur.
With this in mind, businesses should be prepared to increase the data-security measures they have in place.
5) W-2 filings: While, previously, employers had until the end of February or March to file their W-2 forms with the state, those dates are being moved up.
In order to close the gap between when employees receive their W-2 forms and when employers need to have those documents filed, 11 states, along with Washington, D.C., and Puerto Rico, now require employers to file both annual reconciliations and W-2 forms by Jan. 31 each year.
6) Retirement plans: By this summer, the Department of Labor is expected to release new regulations that may affect the availability of retirement plan advisors and may result in more scrutiny of a business’ selection and ongoing monitoring of its retirement service providers.
In addition, states may start to mandate that employers not providing 401(k) or similar retirement plans have their employees participate in a state-sponsored plan.
7) Credit card fraud: In October, new credit card security measures went into place that increase the standards for cards equipped with computer chips and the technology needed to authenticate chip-card transactions.
With this change, liability for credit and debit card fraud shifts from issuing banks to merchants who have not yet installed new EMV terminals and processes. The businesses should work with their credit card processors in 2016 to ensure compliance with the rules, so that they aren’t held liable for any fraud.
8) Online sales tax: Recent changes in the congressional leadership could increase the chances of legislation being passed that would allow states to collect sales tax from online businesses, regardless of where the businesses have a physical presence.
Currently, states are limited by federal mandate to collect tax only on online purchases in which the seller has sufficient physical presence in the state.
9) Workers’ compensation: 2016 could see some states weakening requirements related to the insurance costs and processes of workers’ compensation. Facing this possibility, some in Congress have said the federal government may need to step in to maintain worker protections and increase oversight.
