Paychex, Inc., a leading provider of payroll, human resource, insurance, and benefits outsourcing solutions for small- to medium-sized businesses, has identified the top 10 regulatory issues that small business owners need to be aware of in 2015.
The top 10 regulatory issues identified by Paychex for 2015 include:
- Tax Extenders and Tax Reform. With the passing of the Tax Increase Prevention Act of 2014 into law, approximately 50 tax breaks were retroactively expanded through December 31, 2014. Some of these, such as bonus depreciation and accelerated expensing of certain asset purchases, are particularly beneficial to small businesses. Due to budget constraints, the processing of returns and refunds may be affected. Additionally, the short-term extension could complicate a possible rewrite of the tax code in 2015. Business owners will want to monitor any tax reform developments for potential ramifications.
- The Affordable Care Act. Applicable Large Employers will need to be prepared to meet new IRS mandates to file annual information returns with the IRS and provide statements to their full-time employees about the health insurance coverage the employer offers in 2015.
- Taxation of Online Sales. Taxation of online sales is likely to be an issue affecting many businesses this year. Though the Marketplace Fairness Act, which would have allowed states to collect sales tax from online purchases, stalled in the 2014 session of Congress, businesses should expect this legislation to be resurrected this year.
- Immigration Reform. Employers will need to continue to monitor changes to the immigration system that may impact their internal hiring and staffing procedures, particularly in terms of Form I-9 procedures and work authorization documentation.
- Overtime Regulations. The U.S. Department of Labor is expected to release proposed guidelines in the first quarter of the year to modernize and streamline the existing overtime regulations under the Fair Labor Standards Act. The revised regulations are expected to expand the number of workers eligible for overtime pay by increasing the minimum salary levels required for exempt status employees, and by expanding the duties defining “administrative” employees exempt from overtime pay. In the interim, employers are encouraged to review their employee classifications, focusing on job duties and salary levels for those workers classified as exempt. Employers should anticipate the potential need to track and pay overtime rates where applicable.
- Employment-Related Legislation. Employers will need to remain diligent in their efforts to comply with new legislation in their jurisdictions this year. The trend of local and state governments passing minimum wage increases is expected to continue. In addition, hiring procedures and employment applications will need to be revised for employers in jurisdictions covered by “ban-the-box” laws that prohibit pre-employment inquiries into applicants’ criminal histories. Lastly, paid sick leaves and the tracking and notice requirements that go along with this benefit will require employers to review current sick day benefits and comply with what can be complex provisions in order to avoid violations.
- Privacy. In 2015, Congress will look to pass baseline cybersecurity legislation. Businesses should begin analyzing the relationships between technology and their customers’ personal data. Businesses can expect increasingly vigorous enforcement actions from agency regulators following violations of Federal and state privacy laws.
- Retirement. The U.S. Treasury in 2015 will more broadly introduce its non-mandatory workplace savings program, myRA, which will allow employees to place deferred funds into a program that is similar to a Roth IRA. Other proposed legislation would offer further incentives to small businesses to open retirement plans, provide for lifetime income information on plan statements, and require further disclosures around target-date funds included as plan investment options.
- FUTA Credit Reduction. Some states continue to have outstanding federal unemployment loans in 2015. Employers in these states will continue to have their FUTA credit amount reduced as a way to pay back the outstanding debt. The final list of credit reduction states was published by the Department of Labor in November. Employers in the impacted states should plan to pay higher FUTA taxes for tax year 2015, due in January 2016, and may want to consider planning for the additional tax amount early in order to avoid an unexpected tax expense at the end of the year.
- Banking Developments. Businesses will also see a move toward increased payment security and mobile payment acceptance. Small businesses should consider implementing technology that will allow them to accommodate these trends.