How Proposed Federal Legislation Could Affect Your Small Business
Congress recently embarked on its yearly summer recess, leaving a number of hot-button issues on the table awaiting legislators’ return. Several payroll-related pieces of legislation remain to be addressed that, if passed, will affect the way your business operates. This fall, Congress could consider the following bills:
1. Federal Minimum Wage Increase
Recently several states have opted to increase the minimum wage for their citizens, which puts more pressure on Congress to act on the federal level. Proposed legislation would raise the federal minimum wage to $8.20 within three months of enactment. Additional gradual increases would occur one year and two years later. Although the Senate failed to pass a similar proposal in April, this might be looked at for a second time when legislators return.
2. The Mobile Workforce State Income Tax Simplification Act
This act, if passed, would prevent mobile employees working in more than one state from being taxed by multiple states. This proposal would mean the mobile employee is taxed only in the state in which he resides until he has conducted business in another state for 30 or more days. A very similar bill was passed by the House during the prior Congress, but no action was taken by the Senate.
3. The Working Families Flexibility Act of 2013
If passed, this act would affect private employers and allow a change in the way overtime is paid. Such employers could pay voluntary paid time off at a rate of 1.5 times an hour in lieu of required overtime pay. On May 8, 2013, the House approved this bill, and the Senate plans on taking it up this fall.
4. Tax Reform Act 2014
Tax reform changes are extremely common in Congress, and this session is no exception. House member Dave Camp from Michigan recently circulated a draft of the proposed changes, which include: exclusion for employee-achievement awards, changes to employer-provided educational assistance, and tax exclusion for business-related moving expenses.
Congress is set to return in September and has until December to decide on these issues. If no action is taken on any of these bills, they probably will be re-proposed when the new Congress convenes next year.
Payroll-related legislation doesn’t always make the front page of the news, but it’s always on the table. That constant potential for change can make things challenging for small-business owners and other organizational leaders. Let Paycor take the guesswork out of compliance–we’ll stay up to date for you! Get in touch with us to learn more about our tax filing and compliance services, and download the free whitepaper, Don’t Be a Statistic: 5 Ways to Reduce Your Risk of Non-Compliance.
Source: Bloomberg BNA