Over the years in our regulation-heavy business environment, small businesses have had forests of rules and regulations to wade through every year. The hard truth is that legislative and regulatory challenges (especially over-regulation) often hit small businesses the hardest. They have fewer resources in terms of staff, money, time and management attention to handle the sometimes massive tasks of keeping up with regulations.
As noted in a recent report, Paychex Inc. has compiled the following list of the current regulations that will affect business owners the most in the coming year
As Martin Mucci, president and CEO of the payroll, HR, insurance and benefits solutions provider explains: “Our summary of the year’s most important regulatory developments is designed to help small business owners understand how new regulations will affect their businesses in 2018.”
The following points will provide a general guide to small business owners as they navigate 2018:
Payment Evolution
In September of 2017, the second phase of Same Day ACH, permitting debits up to $25,000, became a payment option, giving cash flow management a boost. Faster payment options will continue to expand and become easier for small businesses to leverage in 2018. In March 2018, financial institutions will be required to meet a strict 5 p.m. local deadline for Same Day ACH funds availability.
State and Municipality
Many stats considering implementation of state-run retirement savings plans. At present, nine states have enacted laws that allow the development of these programs. Each state’s program is structured as a Roth IRA, a multiple employer plan (MEP), or a marketplace whereby users can comparison shop for plans. Employer requirements vary by state, with some requiring employer participation based on employer size and others keeping employer participation voluntary. Auto-enrollment of employees is also a state-specific provision.
Privacy
With the ever-growing cybersecurity threats inherent in a globally connected digital society, businesses that fail to adequately protect sensitive information with security and privacy safeguards face regulatory, reputational, and litigation risks, as well as crushing remediation expenditures. States’ attorneys general and federal regulatory agencies, such as the FTC and the Consumer Financial Protection Board, readily use their legal authority to investigate and bring enforcement actions against businesses for data security failures that lead to data breaches.
Pay Equity
Employers should note, however, that the changes made to the submission date of the EEO-1 (March 31, 2018) and the “workforce snapshot period” (4th calendar quarter of 2017) are in effect for 2018 submissions. It remains to be seen if the EEOC, with its newly appointed members, will choose to revisit the collection of employer wage data as they move forward with their Strategic Enforcement Plan for Fiscal Years 2017-2021, which includes a focus on gender-based pay discrimination enforcement. Pay discrimination based on gender also continues to be an area of great concern for states looking to more aggressively address recognized and documented gender pay gaps and to ensure pay equity in the workplace.
Overtime Regulations
A review of 2017 includes steady developments related to the Final Overtime Rule released by the Department of Labor under the previous administration, the latest of which was the invalidation of the rule in a Federal District Court. Activity related to federal overtime regulations will continue in 2018. A final rule is expected later in 2018.
Employee Verification
While documentation audits and worksite inspections seemed to level off in 2017, Immigration and Customs Enforcement has warned that it will quadruple the number of worksite inspections in the coming year. Under proposed legislation, mandatory use of the E-verify system would be phased in for all private employer.
In addition, see the following additional references:
It should be obvious that even within the scope of small businesses there is much to be prepared for in terms of managing the demands of ever-changing legislation and regulation. While regulations have been reduced dramatically in some cases, there has been a tremendous amount of change, and it can take real work for small businesses to stay informed and up-to-date on those changes.