With so much on their plates, it can be hard for small business owners to keep abreast of how new laws affect them.
Paychex, Inc., a provider of payroll, human resource, insurance and benefits solutions for small- and medium-size businesses, believes there are five key regulatory issues entrepreneurs should be aware of this summer: health care reform, immigration reform, the Defense of Marriage Act, online sales tax and employment regulation.
"Health care reform continues to be a major issue on the minds of businesses large and small," said Martin Mucci, Paychex president and CEO. "Couple that with other hot topics such as immigration reform and the [new] marriage definition, and it's clear the summer could prove to be an extremely consequential time for issues affecting the country’s business climate."
Paychex provides a rundown of how each issue will affect small businesses:
- Health Care Reform: Many employers are anxious about the upcoming obligations they face under health care reform, with one of the leading issues being Employer Shared Responsibility. Employer Shared Responsibility requires employers with 50 or more full-time employees (taking into account full-time equivalent (FTE) employees) to determine if the requirement is applicable, and, if so, which employees may subject their employers to potential assessable payments if they are not offered coverage. Employers also need to determine if the coverage offered meets the minimum standards of actuarial value and affordability.
- Immigration Reform: Immigration reform continues to be a topic of great interest this summer. In June, the U.S. Senate passed the Border Security, Economic Opportunity, and Immigration Modernization Act. The area of most interest to businesses includes a mandatory E-Verify requirement.
- Defense of Marriage Act: Last month, the U.S. Supreme Court issued its rulings on two highly anticipated cases related to same-sex marriage. The Court found the federal Defense of Marriage Act to be unconstitutional, giving legally married same-sex couples equal treatment under the law. Additionally, the court ruled that California's Proposition 8, which bans marriage between same-sex couples, was unconstitutional. In light of these rulings, Paychex expects there will be a number of changes required by employers in areas such as payroll taxes, health insurance, FSA/section 125 and employment regulations.
- Online Sales Tax: The U.S. Senate recently passed the Marketplace Fairness Act, a bill that would allow states to require Internet retailers with more than $1 million in sales to collect and remit sales taxes to state and local governments. Some large e-retailers who have the resources and systems to handle the tax are generally supportive of the act, as are many large brick–and-mortar retailers. Conversely, smaller online retailers are concerned about the significant, incremental burden they will face. In addition to the Marketplace Fairness Act, the sales tax issue is also getting attention by many state governments as they consider additional streams for revenue generation.
- Employment Regulation: The area of employment regulation promises to be an active one for the duration of the current administration. Two employment regulation topics of current interest are background checks and worker misclassification. In 2012, the U.S. Equal Employment Opportunity Commission released enforcement guidanceregarding the use of arrest and conviction records by employers when making employment decisions. Specifically, the guidance indicates that an employer’s use of an individual’s criminal history in making employment decisions may, in some instances, violate the prohibition against employment discrimination under the Civil Rights Act of 1964, as amended. Additionally, in the area of worker misclassification, there continues to be an increase in enforcement efforts from and between the Internal Revenue Service and the U.S. Department of Labor with regard to the misclassification of workers as independent contractors.