Government regulations are basically the government’s way of interpreting laws that Congress has passed. But to say they’re a bit out of hand would be putting it mildly. The 2023 "Ten Thousand Commandments" report showed that in just one year, Congress passed 247 laws, while government agencies put out a whopping 3,168 rules. For small businesses trying to keep up with all these rules, it’s a real headache. And that’s not even counting the rules at the state and local level.
Here’s a quick rundown of some recent changes you should know about:
First up, the U.S. Department of Labor (DoL) made a big change in January 2024. They scrapped an old rule about independent contractors that had been around since 2021 and replaced it with a new one. This new rule uses a 6-factor test to figure out if a worker is an employee or an independent contractor. This matters because it affects things like minimum wage and overtime pay. The new rule kicked in on March 11, 2024. But remember, this rule doesn’t apply to federal employment taxes, and there are different rules at the state level. Plus, there are a bunch of lawsuits challenging this new rule.
Next, the National Labor Relations Board (NLRB) has a rule about joint employers. This rule was supposed to start on March 11, 2024, and it would require a joint employer to negotiate with employees. But a federal court stopped the rule from taking effect. Under this rule, a company would be considered a joint employer if they share control over the essential terms and conditions of employment. But the NLRB might appeal the decision, and the old rule from 2020 still applies for now.
During the pandemic, some businesses were able to claim the employee retention credit (ERC) to help pay wages. But some people wrongly claimed that every small business could qualify for the credit. The credit expired at the end of 2021, but businesses could file amended returns for three years. The IRS has been closely watching these claims. To help businesses correct any mistakes, the IRS set up the Voluntary Disclosure Program (VDP), which let businesses repay the ERC minus 20%. But this program ended on March 22, 2024.
Small businesses often don’t have legal departments or lawyers on retainer, so it’s up to the owners to keep up with these changes to avoid penalties. One way to do this is to follow updates through trade associations and small business advocacy groups.
