Business Regulations: What You Need to Know This Year

Key Podcast Highlights

What Regulations Will Be Impacting Businesses This Year?

1. There is a bill pending called the Corporate Transparency Act, that requires you to report to the treasury the beneficial owners of your company or companies.
2. Minimum wage is increasing in more than 20 states.
3. Certain states will be mandating sick time.  
4. The Equal Employment Opportunities Commission (EEOC) has new workplace harassment rules which go into effect in 2024. They’re updating section 7 of the 1965 Civil Rights Act.
5. A new overtime rule is proposed and expected to come into effect. This rule raises overtime wages to $55,000 a year. Right now it’s $35,000.
6. The worker classification common period is ending. This will change how you classify your independent contractors. For instance, if you have an independent contractor that is materially important for your business and generating revenue for your business, they may now need to be classified as an employee.
7. Joint employers now must share liability. For example, this may impact franchisees. If you have an employee at your franchise, but the franchise company also has control over operations, then you’re considered joint employers.

Transcript

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Gene (00:02):

Hey everybody, it’s Gene Marks. Welcome to this week’s edition of the Hartford Small Biz Ahead podcast. I wanted to just make you aware as we head into 2024 of some regulations that are gonna be impacting your business in 2024. Now listen, this is not a political conversation. I really don’t care if you’re on the right side or the left side of the political spectrum. It’s just fact. These are the things that are happening this year and you’re running a business. You need to be aware of them so that you can navigate your way around them. So, lemme go through a couple of the big ones or a few of the big ones that you should be aware of. These are regulations that will impact your business. So, for starters, there is something called the Corporate Transparency Act that will be happening in 2024. There is a bill right now that was passed by the house, still pending with the Senate that might push this back a year.

Gene (00:50):

But right now, during the year of 2024, you will be required to report to the treasury, the beneficial owners of your companies. That is if you have more than one business, you’re gonna have to report this for all businesses regardless of size. A beneficial owner is anybody who owns 25% or more of a company or exercise’s substantial control. You would’ve to report, the legal name, street addresses, taxpayer identification numbers, driver’s license numbers, passport numbers. All of that is gonna be required as part of this filing. So be aware you’re gonna be getting these forms in the mail. Other regulations, more than 20 states are increasing their minimum wages around the country. So if you are in Alaska, California, New York, New Mexico, Rhode Island, Ohio and a bunch of other places, you’re gonna be seeing your minimum wages go up in 2024.

Gene (01:44):

So you need to be aware of that. In addition, in 2024, there are many other states and cities and jurisdictions that are mandating sick time as well. States from Maine and Maryland to cities like Philadelphia and Pittsburgh all have requirements for mandating sick time that you need to be aware of as well. So keep that in your back of your mind. The EEOC has new workplace harassment rules, which will go into effect in 2024. It is updating section seven of the 1965 Civil Rights Act. If your employees, engage in harassing behavior, either to their fellow LGBTQ plus employees or employees that might be pregnant or just given birth or employees with certain religious denominations or even virtually on a Zoom call or some other online meetings. If this behavior is, takes the form of harassment and there is a wide definition of this, then the employee that’s being harassed or feels like they’re being harassed can report you on this and report you direct to the EEOC.

Gene (02:54):

You would be in violation of these new rules. So my advice to you is to talk to a labor attorney now, update your employee handbooks and your policies, revisit all of your reporting procedures, for harassment and consider getting training, for all of your employees, including your managers. Also, in 2024, there will be some increased activities regarding from the Department of Labor. A new overtime rule has been proposed and is expected to come into effect that will re raise the level of overtime wages to $55,000 a year. Right now, it’s about $35,000 a year. That means that if you have any employees that are salaried and they’re not supervising anybody and meet some other requirements, if they make under $55,000 a year and they work any hours over 40, they’re entitled to over time. So you need to make sure that you’re aware of that and that you pay those employees or you have a non overtime, employee policy to make sure that, that doesn’t happen.

Gene (04:03):

But that rule itself is definitely going to be coming into play. Another rule from the Department of Labor has to do with worker classifications. It’s there, it hasn’t been implemented yet, but the common period is ending. And what that intends to do, is to spread the, to change how you classify your independent contractors. If you have an independent contractor that is materially benefiting your business. In other words, if they are important to your business, they’re generating revenue from your business, that independent contractor may need to be classified now as an employee. So these are individual independent contractors. These are people that you’re giving that form 1099 to. And these are people that are generating revenue for you. I mean, maybe they’re a driver for you or a designer or an outsource developer or somebody that you’re billing out to your customers.

Gene (04:56):

Well, that certainly is considered to be potentially an employee, which means that they would be on your payroll, they would be entitled to your benefits, and also any worker’s rights as well. So, worker classification rules are gonna change in 2024. Also, in 2024, joint employers now must share liability. This is according to the National Labor Relations Board. So that means that if you are a joint employer, what is a joint employer, that is where you have an employee where you share responsibilities with another company. So some examples, the most obvious ones are franchisees, right? So you’re running a Subway location and you’ve got an employee there, but Subway Corporation has some involvement in your policies and control. You guys would both be joint employers, but that can extend to whether or not you’re sharing responsibilities of an employee with a government contractor or a subcontractor, or if you have an IT person on a loan from another company working in your company that could be a joint employer.

Gene (06:01)

It’s whether or not you’re sharing these roles, these responsibilities and these liabilities. And if you are considered to be a joint employer of somebody, that means that you would’ve to share and provide the right benefits, the highest level, and also share in any potential compliance or rules and regulations around those employees that you think might not affect you, but do affect you because they are joint employers, which are subject to more requirements. So, joint employers is another big thing that’s coming up in 2024. So minimum wages are rising. The treasury is coming out with new rules for reporting beneficial owners, joint employer rules take effect. Worker classification rules will probably take effect. Overtime rules are coming and will be taking effect. All of this is happening in 2024. On the state level…

Gene (06:56):

It gets even more crazy. And because this podcast, I’m speaking to all of you guys from all over the country. I’m not gonna dig down onto a state by state, basis, but you really should be up to date on what potential rules are changing for your employees in your state. A lot of ’em have to do with scheduling, your workplace environment, harassment or discrimination, even minimum wage as well. So it’s a good idea to talk to a labor attorney or an HR expert that specializes in your state just to make sure that you are up to speed and aware of the things that impact you in your state. So that’s coming in 2024. You need to be prepared for this. If you are a business owner, you want to have a compliant, safe, and effective workplace so that you can retain great people and also attract great people as well. My name is Gene Marks and you have been listening to these Small Biz Ahead podcast. Hey, if you need any help or advice or tips in running your business, please visit us at SmallBizAhead.com or SBA.TheHartford.com. Hope this information helps. We’ll see you again next week with another episode. Take care.

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