A new year means a lot of new regulations for small business owners. From minimum wage increases to disability calculations and a changing definition of independent contractors, payroll just got a lot more complicated. That’s why 2019 is the year of the payroll system solution.
All of the business-related changes can be a lot to keep up with, especially when it comes to payroll. Not only is it an important element for you to get right as a small business owner who is responsible for withholding pay and filing taxes, but for your employees as well. As anyone who has had the misfortune of messing up a pay cycles has found out the hard way, employees will quickly become unhappy when people mess with their pay.
Although payroll can seem harder than ever in 2019, here are a few of the main changes to look out for.
Your payroll system will likely be affected by wage hikes
Across the U.S., several cities have upped their minimum wage. From Seattle and San Francisco to the Twin Cities to New York City and Washington D.C., it’s not as simple as simply following the federal minimum wage anymore. In addition to the way that this increase can affect a small business’ margins thanks to increased cost, there’s the extra effort required to sort out how tipping works within the new regulations if your small business allows for that.
New overtime regulations have a bearing on your payroll system, too
Another element that affects many small business’ payroll systems are the new regulations that surround overtime. The Department of Labor released a Notice of Proposed Rulemaking for 2019 which means they plan to do an overhaul of the rules regarding overtime pay, specifically the rules around exempt employees (aka those that are unable to earn overtime pay). Currently employees who earn more than $455 a week or $23,660 are exempt from earning overtime pay, but if the changes coming take the form of a raising of that threshold, more employees could be eligible for overtime pay than before.
While nothing has been decided yet, there’s speculation that a decision will be reached sometime around March 2019, so stay tuned.
How a modern payroll system can help
It’s a lot to think about. Because many small business owners are already consumed with getting their business off the ground and keeping it there, an investment in a modern payroll system can go a long way in taking the burden of managing a payroll system off their shoulders.
Besides freeing up your time and energy to focus on other things, the beauty of a modern, digital payroll system is that it’s easily updatable. That means that whenever a new rule or regulation goes into effect, the system can be calibrated to handle it with the click of a button. Whether that’s calculating reported tips, complying with a new minimum wage, managing wage garnishment or anything in between, the system will automatically take care of it for you.
If you’re spending more time getting stressed out with trying to keep up with all of the payroll system regulations that 2019 will bring than focusing on your business itself and doing the work you’re good at and passionate about (you know, the thing that got you into the small business world in the first place), a modern solution might be just what you need.