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10 Top Regulatory Issues for Small Businesses in 2019

Compliance
Article
01/07/2019

In 2018, the #MeToo movement spurred elected officials to introduce more than 125 pieces of legislation nationwide on sexual harassment prevention. This is one of 10 regulatory issues identified by Paychex that will present compliance challenges to businesses in 2019. To help employers understand these legislative developments, Paychex explains how they could affect your business.

1. Sexual Harassment Prevention

The #MeToo movement resulted in an increase in workplace sexual harassment prevention enforcement and legislation across the country in 2018, and is expected to continue in 2019. The Equal Employment Opportunity Commission reported significantly increased activity around sexual discrimination during the past fiscal year, launching 50 percent more sexual harassment lawsuits than the previous year. State and city legislatures, including California, New York state, Delaware and New York City, responded with the passage of new legislation and regulations including provisions to implement or expand workplace sexual harassment prevention training requirements.

2. Paid Leave Laws

Currently, more than 40 state and local jurisdictions have implemented paid leave laws and several more are scheduled to implement leave policies in early 2019. Although paid sick and safe leave laws are more prevalent, paid family leave laws are generally more onerous for employers. Many family leave laws are funded by employee and/or employer contributions and might also require the periodic reporting of several elements including deductions, employee hours, and employee wages.

3. Federal Support for Retirement Savings

In August 2018, President Trump issued an executive order directing the Departments of Labor and Treasury to propose regulations that ease the burdens small businesses face in offering retirement savings plans. Some key legislation, including the Retirement Enhancement and Savings Act (RESA); the Family Savings Act; the Retirement, Savings and Other Tax Relief Act of 2018; and the Taxpayer First Act of 2018 were not passed before the end of the year despite bipartisan support.

Prospects for successful new legislation, which will include components of prior proposals, are promising, potentially enhanced by Rep. Richard Neal (D-MA) as incoming Chairman of the House Ways and Means Committee, who intends to make retirement legislation a priority.

4. Faster Payments and the Independent Contractor Economy

Faster payments, including immediate payments for independent contractors, will continue to dominate the payments landscape in 2019. As business owners make decisions on how and when their company will participate in the faster payments arena, fraud prevention should be top of mind to ensure payments are safe and secure in a 24/7/365 environment.

5. Privacy/Security

There’s news of breach attempts as well as successful breaches almost daily. Security and privacy are everyone’s responsibility. To mitigate risk:

  • Log out of all browsers when leaving your desk
  • Resist using the Social Security number (SSN) as an identifier
  • Utilize secure email when sending emails containing personal identifiable information (SSN, bank account or credit card numbers, etc.)
  • Discard confidential or proprietary information in a secure fashion (such as shredding).

6. Form W-4 Changes

Due to the 2017 tax reform law, extensive changes are required to the Form W-4. But due to the complexity of these changes, the release has been pushed back another year and the 2019 W-4 is similar to the current 2018 version. Many state tax agencies are waiting on the IRS to release the federal W-4 to determine if they will modify their withholding processes based on the federal changes.

7. State Healthcare Reform

Recent proposals to federal regulations and guidance that may affect health insurance markets and which relate to Association Health Plan (AHPs), Short-term Limited Duration Insurance (STLDI), Health Reimbursement Arrangements (HRAs), and Section 1332 state innovation waivers might lead to changes affecting employers’ support of health insurance. These changes, combined with the removal of the federal individual mandate penalty, have encouraged states again to reexamine how they will support their health insurance markets in response to the new federal rules.

8. IRS Enforcement of Employer Shared Responsibility

The IRS is continuing its employer shared responsibility (ESR) enforcement efforts, sending out 226J letters with the preliminary calculations for ESR payments. Applicable large employers should ensure they complete the returns accurately, as the process of responding to 226J letters and follow-up IRS correspondence is time-consuming and onerous, requiring review of complex data gathered across multiple departments including payroll, human resources, and benefits.

9. Impactful Rulemaking from the DOL in 2019

The U.S. Department of Labor’s fall 2018 regulatory agenda indicated the Wage and Hour Division expects to release Notices of Proposed Rulemaking on several regulations impactful to employers of all sizes. The proposal to revise the overtime regulations (projected for March 2019) is the most-anticipated event, but the agency is also expected to release proposals to clarify, update, and define regular rate of pay. All of this might spur potential changes at the state level.

10. National Labor Relations Board to Set Joint Employer Standard through Rulemaking

Employers utilizing temporary agencies might not have to wait much longer for a final rule from the NLRB to restore its pre-Browning-Ferris, Inc. standard for defining joint employer status under the National Labor Relations Act. The agency released its proposed rulemaking in early 2018 with a public comment period. The NLRB has changed its official position on the standard for joint employment three times in the past three years.

Paychex tracks the issues that matter most to businesses, and provides the information and resources they need to make the best decisions. If you’re looking to advance the long-term success of your business, Paychex can help you along the way.

This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.