If you own a business in the U.S. you will always have a partner, even if you are a single-person sole entity. That partner is the government.
Since basically the formation of the United States, the government has shaped the economy by laying down rules and regulations for doing business. The experts at BidSync know all about these regulations. They help companies secure contracts to provide goods and services for the government, public entities and other regulated agencies. The companies that they help have to be fully compliant if they want to compete for business with the government.
Keep reading for details on some of the latest changes and regulations that are currently in the pipeline that could affect how you do business in 2016.
The Changing Minimum Wage
There has been a lot of debate over minimum wage in the last few years. This is in large part due to the fact that U.S. wage growth has been basically stagnant. The Federal Reserve states that 3.5% wage growth is healthy, but the closest we’ve gotten to that in the last six years was 2.5% in November of last year.
Right now the U.S. minimum wage is $7.25 an hour. However, each state and city can set a higher minimum wage if they choose. Lately there has been talk of incrementally increasing the minimum wage as high as $15 an hour over the next few years. California and Washington are leading the charge. A higher minimum wage would definitely affect operation costs for many businesses. But it would also increase spending, which could benefit just as many companies.
Taxes…Particularly Online Sales Tax
Taxes are nothing new. As Benjamin Franklin said, “There are only two things certain in life: death and taxes.” But that wasn’t the case in the online world – at least not until recently. Right now 45 states already have existing laws that regulate the collection of sales tax for online purchases, and 24 have adopted the Streamlined Sales and Use Tax Agreement (SSUTA).
The Marketplace Fairness Act would authorize states within the SSUTA to require sales tax collection from online sellers and help states to enforce their laws. All sellers that don’t qualify for the small-seller exemption would have to collect taxes on all online purchases and remit them to the correct jurisdiction. Since there are thousands of jurisdictions, the complication of remitting taxes is one thing that has held up the Market Fairness Act, which is currently sitting on the Senate’s to-do list.
Employer Provided Healthcare
Health care reform was formally adopted in 2010, but like any smart government entity, Congress decided to phase things in since it established massive changes. On January 1, 2014 any business with more than 50 full-time employees officially had to provide employees with health insurance. Quite honestly, most employers want to be able to provide their employees with health insurance. It’s the right thing to do, and it helps keep your employees healthy, which is good for your business. But it has created significant change in any business that wasn’t already offering health care coverage.
The Small Business Health Options Program (SHOP) Marketplace opened at the end of 2014 to help small businesses with 50 or less full-time employees. But in 2016 businesses in some states can have up to 100 employees and still participate. Have less 25 or less full-time employees? Then you may qualify for the Small Business Health Care Tax Credit, which now covers up to 50% of the premium costs.
For small businesses, most of the health care changes have been a benefit since we’re exempt from mandates, get help initiating plans and enjoy a hefty tax credit.
Interest Rates and Inflation
Many small businesses rely on loans to launch their company and expand. In the last few years we’ve enjoyed amazingly low interest rates as the Federal Reserve worked its magic to shore up the economy. But now that things are beginning to stabilize we can expect those interest rates to inch upward over the coming year. One misstep by the Fed and inflation could become a problem along with the stock market that’s struggling.
These are but a few ways that the government is a not-so-silent partner in our businesses. The red tape and expenses can be harrowing at times, but there’s plenty that the government does to help us small businesses compete and thrive. The Small Business Administration is at least one thing they’ve gotten right.