- LOOKING AHEAD: OPPORTUNITIES AND CHALLENGES FOR BUSINESS OWNERS IN 2016
With another year comes another set of laws and regulatory issues that businesses need to be aware of.
In 2016, many issues affecting the regulatory landscape revolve around employee pay. Changes to overtime rules and paid sick leave, as well as increased minimum wages are all issues businesses need to stay on top of this year.
To help organizations deal with these changes, Paychex, Inc., a leading provider of integrated human capital management solutions for payroll, HR, retirement and insurance services has identified ten regulatory issues that should be on the radar of business in 2016:
- Affordable Care Act: In December of 2015, the IRS extended the Affordable Care Act reporting deadlines to give businesses more time to meet the requirements. New deadlines are March 31, 2016, to deliver the 2015 forms to affected employees; May 31, 2016, to manually file the 2015 forms; and June 30, 2016, to electronically file the 2015 forms. Employers who fail to file forms may be subject to penalties similar to those when not filing W-2 forms in a timely manner.
- Overtime regulations: In 2015, the U.S. Department of Labor (DOL) proposed new salary thresholds for white-collar workers. The agency is expected to release its final ruling in the spring. Employers will need to be prepared to take immediate action in order to comply when that ruling is officially unveiled.
- Employee pay: Employers throughout the country will be adapting to minimum wage increases, as well as new laws on equal pay and paid sick time in 2016. The country’s most stringent equal pay laws went into effect on January 1, 2016 in California. These new laws require that men and women holding the same positions be paid equally. Also this year, Oregon becomes the fourth state in the country to require paid sick leave for employees.
- Worker classification: New guidelines from the DOL expand the definition of what an employee is in order to ensure employers aren’t designating some of their workers as independent contractors to save overtime and benefit costs. Given this information, employers should examine their third-party relationships and monitor state and federal agency developments to assist in the efforts to appropriately classify workers.
- Privacy: Many states have either recently enacted or are considering enacting stricter privacy and security laws. These include new minimum levels of encryption and security controls, and stricter notification processes and remediation steps when data breaches do occur. With this in mind, businesses should be prepared to increase the data-security measures they have in place.
- W-2 filings: Previously, employers had until the end of February or March to file their W-2 forms with the state, but those dates are now being moved up. In order to close the gap between when employees receive their W-2 forms and when employers need to have those documents filed, 11 states, including Washington, D.C., and Puerto Rico, now require employers to file both annual reconciliations and W-2 forms by January 31 of each year.
- Retirement plans: By this summer, the DOL is expected to release new regulations that may affect the availability of retirement plan advisors, resulting in more scrutiny of a business’ selection and ongoing monitoring of its retirement service providers.
- Credit card fraud: In October 2015, new credit card security measures went into place that increased the standards for cards equipped with computer chips and the technology needed to authenticate chip-card transactions. Liability for credit and debit card fraud shifts from issuing banks to merchants who have not yet installed new EMV terminals and processes. Businesses should work with their credit card processors in 2016 to ensure compliance with the rules, so that they aren’t held liable for any fraud.
- Online sales tax: Recent changes in the congressional leadership could increase the chances of legislation being passed that would allow states to collect sales tax from online businesses, regardless of where the business has a physical presence.
- Workers’ compensation: 2016 could see some states weakening requirements related to the insurance costs and processes of workers’ compensations. Facing this possibility, some in Congress have said the federal government may need to step in to maintain worker protections as benefits erode. Businesses should keep an eye on how this debate transpires.