In today's rundown we cover the growing trend of wage transparency, the evolution of the gig economy, and a new tax structure for small businesses.
Welcome to the Small Business Run Down. Each day we bring you stories and trends that impact small business owners and their workforce.
Hello, Monday. One week until Tax Day and many small business owners are still in the dark about new tax policy. If you’ve already filed, consider instead how pay transparency is increasing in creative industries and the complexities of immigration policy for small businesses.
Small business owners unsure about new tax rules…and their impact
As a record number of individuals request extensions from the IRS, a significant number of small businesses are also struggling to understand the changes to the tax code and their implications for their company. For small business owners who have a handle on the changes, a survey by OnDeck indicates that more than half are optimistic that the new tax structure will ultimately benefit their business, while 21% are pessimistic and 27% remain neutral.
The Number: 8 million. The IRS estimates that 8 million LLCs will file for an extension this year.
The Quote: “There are certain instances where we did get guidance. But the guidance is 200 pages and when you sift through that guidance, it leads to more questions.”
Creative industries demonstrating wage transparency
As more states and cities ban interview questions about pay history, a survey from The Creative Group indicates that the marketing and advertising industries are making headway around the subject of wage transparency. The survey shows that over 75% of marketing and advertising organizations offers some level of transparency, while 34% disclose it all. Historically, employers have opposed discussions about wages among their workforce, but now wage transparency is seen as a possible way to decrease the gender and minority pay gaps.
The Number: 80%. According to a survey last year from UCLA and the Harvard Business Review, 80% of employees don’t want their co-workers to know how much they make.
The Quote: “Companies are becoming more willing to share compensation information in an effort to demonstrate an organizational culture of fairness and trust and boost recruitment and retention.”
Immigration regulations pose challenges for small businesses
The public policy debate about immigration has broad implications for small businesses. Without the benefit of a full-time HR department, many small business owners are left to grapple with changing regulations and compliance issues on their own. Since small businesses employ a significant percentage of the 24.7 million immigrant workers in this country, it’s in their best interest to stay up to date on the issue, regardless of political affiliation or ideology.
The Number: 8. Currently, only 8 states require employers to use the federal E-Verify program to check employment eligibility, even though the system is available nationwide.
The Quote: “When you look at the industries employing the most immigrant workers, you see a mix that naturally skews toward smaller businesses, including personal services, food service, hospitality, construction, and agriculture.”
Gig workers play important role in success for many small businesses
Contingent workers can play an important role in the success of a small business and the gig economy has greatly expanded the labor market for contract employees. Finding and retaining highly qualified people to meet your company’s needs can be even easier when you keep certain considerations in mind.
The Number: 1099. A contract worker receives a 1099 form, indicating that they are responsible for paying their own taxes directly to the IRS.
The Quote: “Contingent workers are looking for many of the same characteristics in a company all workers want: a strong culture, career growth and cutting-edge tech to get the job done.”