Planning Around a Shutdown, Banks Float 10% Credit Card Rate, AI Hiring Tools

Hello, and welcome to Paychex Thrive Week in Review, the show where we break down the biggest business headlines this week. I'm Rob Parsons, filling in for Gene Marks this week. We've got three bits of news for business owners they absolutely should have on their radar right now. So, let's jump in.

First up, the possibility of a partial government shutdown. The deadline to avoid it is Friday, Jan. 30, and this is one of those situations that can shift quickly. Three appropriation bills covering a full year of funding for some departments have already been signed into law. That's what ended the last shutdown in November after 43 days.

So, here's what to keep in mind. As of this recording, lawmakers are still working through the remaining appropriations bills and attempting to avoid a shutdown ahead of Friday's deadline. Congress passed three additional bills last week that await the signature of the president, and the remaining six are with the U.S. Senate. The stumbling block is the Department of Homeland Security funding, which Democrats are asking to be stripped out after it was combined into one bill and passed by the House before being sent to the Senate.

For businesses with federal contracts, that bill includes Transportation and Housing and Urban Development funding. Even if you don't rely on federal contracts, this still matters because a shutdown, even a partial one, can create ripple effects for businesses, especially around administrative processing, federal support operations, and approvals and timelines connected to government agencies.

So, your quick takeaway, if your business has anything time sensitive tied to federal operations – paperwork, licensing, approvals or deadlines – this is a good week to stay alert and start planning. And we'll link the latest updates in the show notes.

Now, speaking of planning ahead, running a business is hard enough without getting bogged down by payroll, HR and compliance. That's where Paycheck steps in, taking care of the tasks that keep your business moving so you can focus on what matters most. Check out all they can do for you at paychecks.com slash meet paychecks. That's P-A-Y-C-H-E-X dot com forward slash M-E-E-T-P-A-Y-C-H-E-X. You can also find the link in the show notes.

All right, the next bit of news is a big one in banking and credit. There's new reporting that Bank of America, the second largest bank in the United States, is considering introducing a credit card capped at 10% interest. It has also been reported that Citibank has floated the idea internally.

That's a headline that grabs attention, especially when most credit card interest rates right now are much higher, and this matters to small businesses for two reasons. First, even if your business doesn't carry credit card debt, your customers might. High interest rates often mean consumers spend less, and delay purchases, and tighten budgets.

Second, many small businesses use credit cards for short-term cash flow gaps, supplies and inventory, and emergency expenses. So, any time we see movement around interest rate caps, it signals that financial pressure is still a major theme in the new year.

There are also few hurdles beyond just making an announcement, internally or externally. Experts have indicated that it might take action from Congress to restrict the interest rates that banks and other card issuers can charge. Plus, the banking industry has waved a red flag about the risks of not being able to cover losses if low interest cards end up in the hands of people who have no intention of making good on their debt obligations incurred on such cards.

In a previous episode, there was concern that low interest rates also impact credit limits, which could hurt small businesses who use credit cards for the reasons mentioned earlier: emergencies, purchasing supplies, and covering short-term cash flow issues.

So, your quick takeaway; This is a good week to review your current APRs and make sure you know your options before you need them.

And the third and final bit of news, and this one sits right at the intersection of AI, hiring, and legal risk; Reuters reports that the AI company Eightfold is being sued over claims that it helped companies secretly score job seekers, meaning applicants may have been evaluated without fully understanding what data was used or how decisions were made.

Even if your business isn't using Eightfold specifically, this matters because more employers are adopting AI tools for things like resume screening, ranking candidates, assessing fit, and predicting performance. And the key reminder is if AI is making decisions behind the scenes, employers may still be responsible for how it's used.

So, your quick takeaway; If you're using hiring software or considering it, make sure you understand what data is being collected, how candidates are evaluated, and whether the tool aligns with your hiring policies. You also should be aware of any state laws that come into play, especially around compliance obligations.

All right, well, that was your week of review. To recap, a shutdown talks ahead of Friday's deadline, a possible 10% APR credit card being discussed and or floated, and a reminder that AI hiring tools are under the microscope.

Thanks for listening to Paychex Week in Review. I'm Rob Parsons, and we'll see you next week.

Do you have a topic or a guest that you would like to hear on THRIVE? Please let us know. Visit payx.me/thrivetopics and send us your ideas or matters of interest. Also, if your business is looking to simplify your HR payroll benefits or insurance services, see how Paychex can help. Visit the resource hub at paychex.com/worx. That's W-O-R-X. Paychex can help manage those complexities while you focus on all the ways you want your business to thrive.

I'm your host, Gene Marks, and thanks for joining us.

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