One of the challenges of owning a small business is being aware of all the government-mandated rules and regulations that must be followed to operate within the law. While it is virtually impossible for the average person to know each law in exact detail, there are basic fundamentals everyone who operates a business should practice faithfully.
You should be aware, as of January 1, the minimum wage increased in 17 states. These include; Alaska, Arizona, California, Colorado, Florida, Massachusetts, Maine, Minnesota, Missouri, Montana, New Jersey, New York, Ohio, Rhode Island, South Dakota, Vermont, and Washington.
Later this year, there’s a possibility pay for certain categories of salaried workers may also increase. After years of delay, the Labor department will specify which employees must be paid overtime. Rules that were written during the Obama administration, but never enacted, are being rewritten under the Trump administration to reduce the amount of overtime pay salaried workers were scheduled to receive. Under the original rules the pay threshold at which workers would be exempt from overtime would double, to $47, 476 from $23.660.
I know this is a lot of information to digest. Fortunately, the government has many online resources to help you understand everything you need to know. Checking online periodically can keep you on track and prevent you from missing important information.
Employment and Labor
No matter how long you’ve been in business, it never hurts to take a refresher course. If you employ workers or independent contractors, this applies to you. The Department of Labor’s FirstStep Employment Law Advisor (http://webapps.dol.gov/elaws/First/Step/) helps employers figure out which key federal employment laws pertain to their business. It also covers record keeping, reporting and posters that are mandatory to display in the workplace. The following are the most common labor laws.
- Wages and hours: The Fair Labor and Standards Act (https://www.dol.gov/whd/flsa) sets standards for wages and overtime pay. The act requires employers to pay covered employees at least the federal minimum wage and one-and-one-half times the regular rate of pay.
- Workplace safety and Health: The Occupational Safety Administration (OSHA) requires employers to provide employees with a workplace, “free from recognized, serious hazards.” The OSHA Act can be reviewed at (https://www.osha.gov/law-regs.html). Workplaces may be subject to inspections and investigations.
- Posters: Some states require that certain notices be posted in the workplace for employees to view. The elaws Poster Advisor (https://www.dol.gov/elaws/posters.htm) is an easy reference to help you figure out which posters you need to display. Free electronic and printed copies are available in multiple languages.
Employment and Excise
When you have a staff on payroll, the IRS expects you to pay employment taxes. The list includes Social Security tax, Medicare tax, federal income tax withholding and federal unemployment tax. To get more information, refer to the IRS page on Employment Taxes for Small Businesses at (https://www.irs.gov/businesses/small-businesses-self-employed/employment-taxes-2).
If you manufacture or sell certain products, use some types of equipment, or receive payments on a variety of services you provide, your business may be subject to excise taxes. These taxes are often included in the purchase price of specific goods (i.e. gasoline) rather than added on as a separate charge. Review the IRS guide on Excise Taxes at (https://www.irs.gov/businesses/small-businesses-self-employed/excise-tax).
Taking time to get the right information on government rules and regulations can prevent problems down the road. These resources can make you aware of the best options for your business and employees. And, that’s what it’s all about.