Top Regulatory Issues Facing Small Businesses Today

Business analysts are keeping a close eye on proposed rules that are expected to be finalized in 2016. These rules could have an impact on small businesses, especially companies with multiple employees. Following are some of the top federal regulatory issues small businesses should know about, including one rule that went into effect late last year.

EMV Cards

Credit and debit cards equipped with EMV chip technology are more resistant to hacking than cards with a magnetic swipe strip. With a swipe-strip card, each time a customer makes a purchase, the same code is relayed to the user’s bank to authorize payment, whereas a card embedded with a chip generates a unique authorization code for each transaction. The technology can protect consumers from fraud, but only if businesses are able to process chip-card payments. A rule that went into effect in October 2015 allows MasterCard and Visa to hold merchants liable for credit card fraud if they don’t provide technology to accommodate chip-cards and a customer’s account is hacked. But due to the cost of software and hardware required to process such payments, many businesses are still using point-of-sale systems that only work with swipe strips. Small businesses may not need to worry about large-scale remote credit card code interception; however, unscrupulous customers who are aware of the new rule could conceivably defraud businesses by making a purchase and then denying the charge. Without the equipment required by the new rule, businesses would be liable if a customer alleged fraud had occurred.

Worker Classification and Overtime Pay

The Department of Labor is expected to issue a final rule in August that clarifies worker classification and expands eligibility for overtime pay. Of particular importance to small businesses is how the DOL will further define the difference between an employee and a contractor. In fiscal year 2015, the DOL’s Wage and Hour Division investigated more than 102,000 cases of employees who were mislabeled as contractors, resulting in more than $74 million in back wage payments. While some companies deliberately misclassify employees, other businesses have unknowingly made that mistake because they weren’t aware of how the law determines whether an employee-employer relationship exists. Businesses that employ managers may be affected by an anticipated change in overtime regulations. Currently, anyone who earns more than $23,660 per year and performs certain managerial functions is exempt from overtime pay. The DOL is expected to raise that threshold to $50,440, which would greatly expand overtime eligibility for lower-paid managers.

OSHA Rules

The Occupational Safety and Health Administration is planning to release a new final rule in March that will require electronic filing of OSHA 300 Logs (reports of occupational illnesses and injuries). Businesses with 10 or fewer employees are exempt from filing OSHA 300 logs, as are some industries. But last year, OSHA expanded the list of industries and occupations required to file this form, so business owners should review whether the requirement applies to them.

Retirement

An upcoming DOL fiduciary rule could result in retirement planning problems for small businesses. The rule would restrict the type of advice financial planners could give to small business owners about retirement plans and would create layers of compliance that could raise the cost of planning and limit plan options. Part of running a successful business is anticipating and preparing for regulatory changes and understanding how they could affect operations and legal obligations. The above federal regulatory issues are only a handful of regulations that may affect small business owners and in addition, Maryland and local county regulations may be more stringent. Lusk Law, LLC, specializes in assisting small businesses and providing insight on regulatory matters. Our experienced attorneys have provided legal counsel and representation to business owners in Frederick County, Howard County, Baltimore County, Baltimore City, Carroll County, Washington County, Anne Arundel County, and other counties in Maryland. With over a decade of experience handling business law matter, we are ready to offer a consultation concerning your rights. Please call us at 443-535-9715 or fill out our contact form if you have any questions about this topic.

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