This article was originally published by The Hill on January 6th, 2017.
As 2017 kicks off and a new administration is approaching, we can be certain that a number of policy changes are on the horizon. What exactly those changes will look like remains unclear. In the absence of certainty, many small businesses are wondering how to prepare.
Government policies and regulations have a significant impact on how small businesses operate. They are often complex and complying with them can eat up large chunks of time—time that entrepreneurs would rather spend on running their businesses.
Small businesses have to comply with both federal and state regulations. This may become even more complex as we head into the year, as some states have indicated they will counter the administration’s policies, while others will likely fall in line.
In short, we stand at a moment of intense regulatory flux. The good news is that small businesses don’t have to face them alone. Here are the top regulatory and compliance issues they will face in 2017, and how small businesses can prepare for them.
The Affordable Care Act’s (ACA) future has been one of the most talked about topics since the election. President-elect Donald Trump and the Republican-controlled Congress intend to repeal and replace the law, and promote the use of health savings accounts (HSAs), though the specifics are unclear.
Any updates to the law will likely be implemented in phases over the next few years,rather than immediately this year, as officials on both sides of the aisle debate how our healthcare system can improve. Until changes are made, employers should continue tocomply with all existing ACA rules.
Employers were set to start paying certain employees overtime under a federal rule that updated the Fair Labor Standards Act (FLSA), but a federal judge blocked it, postponing it indefinitely. The rule would require businesses to pay overtime for any employees making less than $47,476.
The new administration is expected to undo the rule, but the Republicans haven’t said much about it. Moreover, the legal challenge is still pending, so anything could happen. For now, the original threshold for overtime pay remains in place.
Attempts by the Obama administration to increase the federal minimum wage from its current level of $7.25 an hour have been blocked in Congress. Most of the action on minimum wage has taken place at the state and local level. In 2017, 20 states will increase their minimum wage.
President-elect Trump has taken various stances on this issue, from raising it to $10 an hour to eliminating it altogether. His choice for labor secretary, Andrew Puzder, has opposed any significant increases to the federal minimum wage. This year, small business owners should be aware of any minimum wage updates in their states and cities.
Currently, the Family Medical Leave Act gives employees 12 weeks of unpaid, job-protected leave. Trump supports paid maternity leave of up to six weeks for new mothers whose employer does not already offer paid leave, which would be provided through unemployment benefits. Paid family leave has increasingly received bipartisan support, as well as support at the state and local level.
In a recent survey, employers rated a national uniform paid leave framework as one of their top health care priorities for the new administration. As we wait to see what, if any, action Trump and Congress take at the federal level, small businesses should be complying with all state family and medical leave laws.
The U.S. Equal Employment Opportunity Commission recently issued new reporting rules that require employers with more than 100 employees to report pay data to the federal government by March 31, 2018.
Under the Trump administration, these changes could proceed as is, be delayed, or be scrapped completely. The president-elect has not taken a clear stance on equal pay. Small businesses should prepare to comply with these requirements while also checking if their states have their own equal pay laws.
Tax reform is expected to be a priority for both the administration and Congress in 2017. The Trump tax plan emphasizes the need for a tax structure that supports businesses and job growth. For businesses both small and large, the Trump plan proposes a decrease in the business tax rate from 35 percent to 15 percent, as well as eliminating most tax expenditures.
Tax reform could also include changes to employer-sponsored benefits like retirement and health insurance contributions. Small businesses should ensure they are complying with all existing tax laws.
Immigration reform has been a central plank of Trump’s platform and is expected to be a priority early in his term. He plans to increase immigration controls through a number of methods, including requiring employers to confirm the employment status of workers through the federal electronic verification system, more I-9 scrutiny and worksite audits.
Trump’s stance on H-1B visas for high-skilled workers has varied. This could ultimately be decided by his direction to the Department of Labor to “investigate all abuses of visa programs.” Employers should be sure that all new and existing hires have the proper paperwork.
With enough preparation, small business will be able to continue being the engine of the U.S. economy, no matter what changes come this year.