The Top 11 in ’11: Regulatory Changes Every Small Business Needs to Know In the New Year, Says Paychex
1. Tax changes – In 2011, businesses will confront the increasing complexity of the tax environment, including the implementation of a partial payroll tax holiday, the ability for businesses to expense 100 percent of their capital investments, and the retroactive extension of many temporary business tax incentives that expired at the end of last year.
2. Health care reform - A key aspect for 2011 is the provision providing business tax credits for small employers that purchase health insurance, which is effective for tax year 2010 and carries into next year. It provides, with some limitations and requirements, incentives for providing health insurance to employees. Grandfathering will remain an important component of health care reform. Health plans that existed on
3. FSA plans - Effective 1/1/11, over-the-counter medicines and drugs other than insulin (i.e., aspirin) will no longer be eligible for reimbursement from a health FSA unless the item is prescribed by a medical practitioner.
4. Unemployment Insurance rates/changes - Unemployment insurance (UI) funds in many states are at critically low levels due to the large numbers of people out of work for extended periods. Many employers will see a trend that promises to send state employer UI contribution rates higher in 2011 to replenish depleted UI trust funds and repay federal loans taken to allow states to continue to pay benefits. In addition, measures to reduce unemployment insurance fraud are in the works.
5. Employment law - The United States Department of Labor and many states have enacted or are considering measures to provide greater transparency to workers on the wages they are owed, especially in key areas such as minimum wage and overtime requirements, and to increase penalties on those who fail to pay their workers the compensation they are entitled.
6. 401(k) disclosures/target date funds - For employers offering 401(k) plans to their workers, regulations requiring disclosures pertaining to fees of the plan will be required; additionally, plans offering target date funds will likely see further disclosure requirements around those investments.
7. State budgetary challenges - Many states are facing critical budget shortfalls, and as such may contemplate impromptu tax/fee increases or filing changes to raise badly needed revenue. Additionally, many state agencies are reducing staff, which could result in processing delays for businesses requiring licensing or other state services.
9. IRS enforcement - To help collect more tax revenue in this era of budget deficits, the
10. Privacy - Most states have instituted laws requiring businesses to notify customers (and, in some states, governmental authorities) when sensitive data is breached. Some states have enacted laws requiring that businesses have processes to adequately safeguard sensitive client data. Businesses handling protected health information are subject to additional requirements governing the protection of that data.
11. Employment verification/immigration -
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