2018 is in full swing and many changes have come to pass for small business owners. From tax reform to pay equity, the legal landscape surrounding small business practices is steadily changing, and business owners need to stay on top of new legislation, laws, and rules to ensure a healthy year. As Q1 comes to a close, here are five things all Small Business Owners should know.
1. Tax Changes that Affect Your Business
With the Trump Administration’s Tax reform plan in place, the corporate tax rate is now reduced to 21% and the “pass-through” tax rate is now 20%. In addition, the individual health mandate penalty established by the Affordable Care Act (the “ACA”) will be a $0.00 penalty by 2019, effectively eliminating the ACA’s individual mandate.
Though many changes have come to pass recently, small business owners should note their reporting requirements to the IRS remain the same. Consulting a bookkeeper to ensure you are in compliance with requirements and understand the new tax code is a great way to end Quarter 1.
2. Medical Marijuana Regulations Still Confusing
Currently, about 32 of the 50 states have legalized marijuana for medical use. However, under Federal law marijuana remains a Schedule I controlled substance under the Controlled Substance Act, making it a criminal offense to use or possess marijuana.
This conflict between State and Federal laws has caused confusion among employers who require their employees to complete a drug test. Thirteen states have made it illegal to penalize or terminate an employee who tests positive for marijuana if the employee is an authorized user under the state’s marijuana laws.
As the law develops and changes around medical marijuana, small business owners should continue to reevaluate their drug testing and workplace policies to ensure compliance with state disability laws. Ongoing changes with the law mean policies should be evaluated on a consistent basis until something concrete is in place.
3. Pay Equity Needs to be Addressed
With the spotlight on the treatment of women in the workplace, many states are scrutinizing documented pay gaps to ensure pay equity and eliminate the gender pay gap . The Office of Management and Budget’s revision to the EEO-1 form that was scheduled to take effect in January 2018 was tolled in 2017. However, the EEOC maintains the data is crucial in assisting the agency in identifying possible pay gaps.
The workplace landscape will continue to change, and the spotlight on women in the workplace is not likely to fade anytime soon. Small business owners should review established pay structures in an effort to eliminate any pay bias. If bias is found, small business owners would benefit from consulting a legal professional to determine the best way to alleviate the issue at hand.
4. H.R. 4219 - Workflex in the 21st Century Act
Republican House members introduced the House Bill 4219 the 21st Century Act (the “Act”). The Act is a voluntary approach to paid time off and workplace flexibility for employees. Legislation is proposed as an ERISA amendment and would preempt state and local paid sick leave laws for employers who opt into the requirements. These requirements state employers are to offer a minimum amount of paid sick leave and offer at least one flexible work arrangement given the employee meets certain requirements stated in the Act.
Under the Act, employers with less than fifty employees would be required to provide fourteen days of paid sick leave to employees in service to the employer for five or more years and twelve days for employees with less than five years of service.
Work flex options include would include: four-day work week with longer daily hours; two-week program allowing an employee to work eighty hours over that span; telecommuting arrangement; or flexible hours. Although work flex may create more administrative burdens for local businesses, it could potentially be a great opportunity for multi-jurisdictional businesses.
5. Digital Privacy
From Equifax to Facebook, 2017 was teeming with media stories about data breaches. Though data breaches are not new, hackers are becoming more sophisticated all the time. It’s vital that small business owners who operate in a cloud, portal, or digitally based system take measures to protect sensitive information for clients and employees alike.
Several states have passed digital privacy laws . It is imperative that small business owners comply with these changing privacy laws, especially those in the financial, medical, and insurance industries.
The legal landscape for businesses continues to change as our society evolves and grows. Small business owners can rest assured that with the proper resources and counsel, staying ahead of changes does not have to be such a difficult task. Questions? Do not hesitate to reach out for more information.
By: Suketa Shah
Suketa Shah is an attorney in the Firm’s Franchise Law and Construction Law Practice Groups. If you have any questions or concerns about this issue or any other matter, please contact Suketa directly at 813-223-1099.