A recent Washington Business Journal Article discussed regulations that give small business owners the blues. Based on conversations I’ve had with business owners over the years, I think the list is very accurate; these regulations seem to affect businesses in every industry and every part of the country. Here’s how you can keep these three regulations from wreaking havoc on your small business.
Determine if a worker is an employee or an independent contractor.
At the federal and state levels there are questions you need to ask about your employees—their answers will help determine how they should be paid. If the answers are not clear, there is one surefire way to keep yourself safe: You can file an SS-8 form with the IRS, and they will make a determination for you. You might not like their answer, but you will know you are in the clear! You can read more about this in our article, Employee or Independent Contractor – Make sure you know the rules.
Make sure you are paying overtime to the appropriate employees.
We recently wrote about this as well and discussed a specific example of an employer fined big penalties for not paying overtime to certain eligible employees. There is an impending update to this regulation, which will increase the threshold to make employees exempt from overtime. This will surely put a lot more employers at risk.
The best thing a small business owner can do to avoid this issue is to find a human resource partner who is familiar with the regulations (both federal and state) of their employees’ locations and do an audit. You might be surprised to find you should be paying overtime to some of your employees! It might cost you a little in the short term, but it will prevent some huge, potentially debilitating expenses down the road.
Keep up with the Affordable Care Act.
This has been a challenge for all businesses, but small business owners in particular often lack the internal resources to keep up with the ever-changing regulations in the Affordable Care Act. My advice is quite simple—don’t go it alone. There are so many resources available for small business owners.
- First, seek help from your health insurance broker and payroll provider. Both should be proactively advising you about what you need to do based on the number of employees you have. They should also be offering services (maybe for a fee) that manage any reporting that needs to be done.
- If they are not providing these services, it’s time to look for new partners or consider partnering with a PEO. PEOs are in a unique position to help with the ACA, because they manage both payroll and benefits.
While the list of regulations a small business owner faces can be daunting, by being proactive and seeking support from partners, you should be able to keep your business safe and sleep well at night.